According to Law360, an American expatriate who runs an Israeli law firm will not get a chance to challenge regulations implementing the transition tax for overseas profits after the U.S. Supreme Court in Monte Silver Ltd. v. Internal Revenue Service et al., case number 22-907, on May 1, 2023 declined to hear the case
The top court's refusal to hear the case ends the challenge by Monte Silver, who had argued the Internal Revenue Service failed to undertake the required analysis of the regulations under the Regulatory Flexibility Act. Silver sued the government in 2019 over the regulations governing the one-time mandatory transition tax on overseas income, a provision of the 2017 Tax Cuts and Jobs Act. Companies had eight years to pay the deemed tax on foreign income.
The court ruled Silver did not show that granting the requested relief would redress a past injury because he had already borne the costs of compliance in determining his liability and he didn't owe any tax. The court also found that Silver had failed to show imminent future injury, another way to satisfy Article III standing.
The U.S. District Court for the District of Columbia dismissed Silver's claim in 2021, finding that Silver failed to show his burden to comply with the new regulations would change if the government granted the relief he requested.
Silver also did not present facts showing that he would be harmed in the future by the regulations, the district court ruled. He alleged that he could end up paying costs to comply with the regulations but did not present actual facts showing that he would suffer an imminent injury, the opinion said.
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Read more at: Tax Times blog