Law360: US Urges DC Court To Toss Suit Challenging GILTI Regs

Monte Silver
By Monte Silver

By David Hansen

A D.C. federal court must dismiss a challenge to IRS regulations governing the transition tax on foreign earnings because the plaintiff, an expatriate attorney, lacks the physical presence needed to sue in the U.S., the government said.

While small firms can challenge a regulation under the Regulatory Flexibility Act, they can do so only if they operate in the U.S., the government said in a brief filed Monday. Attorney Monte Silver is using the act, which requires an analysis of a regulation's impact on small businesses, to challenge regulations carrying out the global intangible low-taxed income provision of the 2017 Tax Cuts and Jobs Act.

The U.S. Treasury Department issued regulations carrying out the pertinent Internal Revenue Code Section 951A in 2019. Silver argued the government didn't provide an initial or a final analysis of the impact the GILTI regulations would have on small businesses, as required by the RFA. The final regulations were 318 pages and 100,700 words long, he noted.

The RFA entitles small businesses to judicial review of improperly issued regulations, the U.S. government said. But Silver can't sue under the RFA because he doesn't meet its definition of a small business, the government said...

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