(Southern Pines)….The tempo has quickened on pending litigation matters involving captive insurance companies. Two major developments unfolded during January. First, the strongly challenged IRS Notice 2016-66 is now officially before the Supreme Court of the United States (SCOTUS). CIC Services, LLC, filed its petition for Certiorari with SCOTUS on January 17. The long running attempt to curb the rule making authority of the IRS was officially docketed on January 24, 2020 as Case No. 19-930.
The Solicitor General on behalf of the US Treasury Department and the Internal Revenue Service, has until February 24 to file its response. By the same due date, NCCIA, together with some other 10-15 state associations and SIIA, will file its Amicus Brief. The brief in support of CIC Services, will ask the SCOTUS to take review of the flawed rulings of the 6 th Circuit Court of Appeals and the earlier Federal District Court in Tennessee. More complete details as to the arguments to be advanced by CIC and NCCIA and others will appear in the February Newsletter. The NCCIA Government Affairs Committee Chaired by Alex Webb are working with Tennessee counsel – Kevin Doherty and his firm Dickinson Wright in perfecting this “Friend of the Court” filing.
Second, the Appellant’s brief in Reserve Mechanical case (RMC case) is now due in the 10 th Circuit Court of Appeals on January 31, with the Amicus Brief of the Captive Insurance Associations to be filed on or before February 7, 2020. Ten associations including SIIA, are seeking reversal of the controversial Tax Court ruling. RMC that has drawn considerable attention in the captive insurance industry. Like the CIC Services case, this litigation could be drawn out over a number of months. The original Tax Court ruling was issued June 18, 2018. For more information contact Lane Brown, VP Government Affairs at 704.713.0008.