Miller & Chevalier's Tax Appellate Blog 2017-03-15T14:27:43Z http://appellatetax.com/feed/atom/ Alan Horowitz <![CDATA[Ninth Circuit Briefing Completed in Altera]]> http://appellatetax.com/?p=2735 2017-03-15T14:27:43Z 2017-01-26T00:15:33Z The parties have now completed briefing in the Ninth Circuit in the Altera case, in which the Tax Court struck down Treasury regulations that require taxpayers to include employee stock options in the pool of costs shared under a cost-sharing agreement.  As described in our previous reports, the Tax Court’s decision implicated both the specific issue of whether the cost-sharing regulations are a lawful implementation of Code section 482 and the more general administrative law issue of the constraints placed on Treasury by the Administrative Procedure Act (APA) in issuing rules that involve empirical conclusions.

The government’s opening brief … Read More

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Alan Horowitz <![CDATA[Supreme Court Denies Certiorari in Clarke]]> http://appellatetax.com/?p=2743 2017-01-10T23:28:58Z 2017-01-10T23:28:58Z As we have previously reported, after the Clarke case was remanded by the Supreme Court, the Eleventh Circuit ruled for the government and upheld the district court’s order enforcing the summonses.  Yesterday the Supreme Court denied a petition for certiorari filed by the parties who were contesting the summonses.  The gist of the petition asked the Court to consider whether the district court had abused its discretion in handling the dispute after the remand–a request that is more case-specific than the kinds of issues that would normally be reviewed by the Supreme Court.  This order marks the end of the … Read More

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Steve Dixon <![CDATA[Tax Court Overrules Its BMC Software Decision in Analog Devices]]> http://appellatetax.com/?p=2729 2016-12-21T17:47:16Z 2016-12-05T22:02:52Z In its recent reviewed decision in Analog Devices, the Tax Court revisited and overruled its decision in BMC Software. We previously covered the BMC Software decision and the Fifth Circuit’s reversal of the Tax Court here. Analog Devices involves facts nearly identical to those in BMC Software: The taxpayer claimed a one-time dividends received deduction under section 965 for its 2005 tax year. Pursuant to a 2009 closing agreement with respect to some section 482 adjustments, the taxpayer elected to establish accounts receivable via a closing agreement under Rev. Proc. 99-32 in order to repatriate Read More

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Steve Dixon <![CDATA[Federal Circuit Decides Interest-Netting Dispute in Wells Fargo Case]]> http://appellatetax.com/?p=2690 2016-07-01T20:02:34Z 2016-07-01T16:06:33Z On Wednesday, the Federal Circuit issued its decision in the Wells Fargo interest netting case, affirming in part the trial court’s decision in favor of the taxpayer but also reversing in part. We previously covered the trial court decision and the oral argument here. As our prior coverage explained, the case presented three different fact patterns (termed “situations” in the decision) in which the taxpayer’s entitlement to interest netting hinged on the extent to which corporate mergers resulted in distinct corporations becoming the “same taxpayer” under the relevant Code section governing interest netting (§ 6621(d)). And as the questioning … Read More

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Alan Horowitz <![CDATA[Rehearing Denied in Clarke]]> http://appellatetax.com/?p=2683 2016-06-22T20:53:33Z 2016-06-22T20:53:33Z The Eleventh Circuit today denied the petition for rehearing and rehearing en banc filed by the appellants in the Clarke summons enforcement case.  The petition did not focus on the broader legal issue that we have previously addressed here concerning the standards for allowing an evidentiary hearing on the basis of allegations of improper motive in issuing a summons.  Instead, the petition asked the court of appeals to reconsider whether the trial court erred in refusing to allow the appellants to make new submissions in the wake of the Supreme Court’s remand of the case.

The appellants now have 90 … Read More

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Alan Horowitz <![CDATA[Eleventh Circuit Affirms Enforcement of Summonses in Clarke]]> http://appellatetax.com/?p=2665 2016-03-16T22:43:38Z 2016-03-16T22:43:38Z The Eleventh Circuit this morning affirmed the district court’s decision in Clarke that had enforced a group of IRS summonses. The court’s legal analysis provides a glimmer of hope for taxpayers who desire to contest future summonses on grounds of bad faith, but there are daunting factual challenges to being able to actually make use of that legal analysis.

As evidenced by our prior reports, this case has a long history that now encompasses a Supreme Court opinion and three decisions by the Eleventh Circuit. To recap, the summoned parties sought an evidentiary hearing at which they could examine … Read More

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Alan Horowitz <![CDATA[Government Files Notice of Appeal in Altera]]> http://appellatetax.com/?p=2658 2016-02-23T16:40:58Z 2016-02-23T16:40:58Z We have previously reported on the Tax Court’s important decision in Altera, which has significant implications both for IRS regulation of cost-sharing agreements under the transfer pricing rules and, more broadly, for how the Administrative Procedure Act might operate as a constraint on rulemaking by the Treasury Department in the tax area.  Although there were some tactical considerations that could have made the government hesitant to seek appellate review from its defeat in Altera (see here), the government has now filed a notice of appeal to the Ninth Circuit.

The court of appeals will issue a briefing … Read More

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Laura Ferguson <![CDATA[IRS Takes an Aggressive Position on Scope of Privilege and Waiver in Sanmina]]> http://appellatetax.com/?p=2647 2016-02-12T20:45:25Z 2016-02-12T19:09:11Z Opening briefs have been filed in the Ninth Circuit in United States v. Sanmina, where the IRS is appealing a decision by the U.S. District Court for the Northern District of California holding that the attorney-client privilege and work product doctrine protect two memoranda prepared by Sanmina’s in-house tax attorneys. In its opening brief, the IRS is advancing a narrow view of attorney-client privilege and an expansive view of waiver.

Sanmina claimed a $503 million worthless stock deduction on its return. To support its return position, Sanmina provided the IRS a valuation report prepared by outside counsel DLA Piper. … Read More

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Alan Horowitz <![CDATA[Reply Brief Filed in Clarke]]> http://appellatetax.com/?p=2637 2016-07-07T19:46:10Z 2016-01-08T19:37:08Z The summoned parties have filed their reply brief in the Clarke case.  The brief focuses more on the particular facts of the case and less on legal principles of broad applicability.  In particular, the brief criticizes the district court’s decision not to allow introduction of new evidence on remand, arguing that the court made that determination at the initial post-remand status conference, which was earlier than the summoned parties should have been expected to make an offer of proof.test

Oral argument is tentatively scheduled for the last week in February.

Clarke – Appellants Reply Brief in CA11Read More

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Alan Horowitz <![CDATA[District Court Orders Microsoft Summonses Enforced, Finding No Legal Obstacle to Involvement of Outside Law Firm]]> http://appellatetax.com/?p=2632 2015-12-03T17:00:22Z 2015-12-03T17:00:22Z The district court has ordered enforcement of the IRS’s summonses in its high-profile audit of Microsoft.  As we have previously discussed, Microsoft’s objections to the summonses centered on the IRS’s novel decision to bring in an outside law firm (Quinn Emanuel) as a consultant to whom certain tasks would be delegated.  The objections also touched on the issue being litigated in the Clarke case concerning the appropriateness of enforcing a summons that is arguably designed to assist the IRS in Tax Court litigation.  (See prior posts on Clarke here.)  The district court’s decision in Microsoft turns on … Read More

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