Since the IRS issued its infamous Notice 2016-66 in November 2016, your Association has vigorously challenged the Service ruling on many fronts. One of these challenges is coming to a head in the US Court of Appeals in the 6th Circuit (*Cincinnati) on October 19, 2018. Arguments will be heard in the CIC Services, LLC et al litigation (Case No. 18-5019) when the appeal of the ruling from the Federal District Court in Tennessee is considered.
The IRS contends that the Notice is within its rule-making authority under the Administrative Procedures Act, and to restrain or enjoin implementation of the Notice, would violate the Anti-Injunction Act. NCCIA filed an amicus brief with the trial court in April 2017, but Judge Travis R. McDonough sided with the Government and upheld the IRS rule-making. Hopefully, the Circuit Court will take a more enlightened view of the arguments advanced against the IRS Notice in this latest round of challenges.
In fact, according to the IRS, “the appeal presents a question of significant administrative importance regarding the scope of the ban on injunctive and declaratory relief involving federal taxes. Counsel for the United States (IRS, Department of the Treasury) believe that oral argument should be heard.” NCCIA’s Vice President for Government Affairs, Lane Brown, will be present for the argument and along with Adam Weber, Counsel for CIC Services, LLC. Brown will provide a post-argument analysis of the court proceedings. Today, the obligation to report micro-captive transactions to the Internal Revenue Service under 2016-66 remains much disputed.