Tax Analysts reports that the Department of Justice will no longer argue that Chevron deference should apply to revenue rulings and revenue procedures. The report cites Gilbert Rothenberg, appellate section chief, Tax Division, Department of Justice, who made the announcement during his comments at the American Bar Association’s recent Section of Taxation meeting in Washington, D.C. Following the U.S. Supreme Court’s decision in Mayo Foundation v. U.S., the standard for the deference given to Treasury Regulations is now governed by Chevron v. U.S.
Mr. Rothenberg did note, however, that the DOJ will continue to assert Chevron deference for temporary regulations. This is important for followers of the Intermountain issue, i.e., whether retroactive temporary regulations apply to taxpayers accused of participating in listed transactions. The interpretation and application of those temporary regulations (Treas. Regs. 301.6229(c)(2)-1T and 301.6501(e)-1T) has created a split in the Circuits and since the release of Mayo Foundation, the Department of Justice has argued that Chevron deference should apply in these cases. It seems they will continue to do so.
Hat Tip (Tax Prof Blog and Daniel J. White, Esq.)
A unanimous United States Supreme Court (8-0) rules that medical residents are employees, not students, and therefore are subject to FICA withholding. Chevron deference applies to Treasury Regulations rather than the standard set forth in National Muffler.
Mayo Foundation v. United States, No. 09-837 (January 11, 2011)
U.S. Supreme Court reverses the Sixth Circuit’s holding that comity did not bar state tax challenge in federal court. Remands.
Levin v. Commerce Energy, Inc. __ U.S. __, Docket 09-223 (Slip. Op. June 1, 2010)
The United State Supreme Court denied cert. to hear the appeal in Texton v. U.S.
Supreme Court Orders 5/24/10, Textron v. United States, cert. denied.
Commissioner of Revenue does not have the authority to attribute income to and assess taxes on a business on the grounds that the business structured itself to comply with the relevant tax statutes and was motivated to do so solely by tax avoidance.
Read the opinion here:
HMN Financial, Inc. v. Commissioner, Docket A09-1164 (Minn. Sup. Ct. May 20, 2010).
The United States Supreme Court reversed the Second Circuit Court of Appeals, holding that the District Court should have applied a deferential standard of review to the ERISA Plan Administrator’s interpretation of the qualified plan.
Read the opinion here:
Conkright v. Frommert, Docket 08-810 (U.S. Sup. Ct. 2010)