Waiver of Attorney-Client Privilege and Work-Product Protection Issues Return to Ninth Circuit in Sanmina

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February 10, 2020

We previously reported on the Ninth Circuit’s earlier consideration of attorney-client privilege and waiver issues in the Sanmina case here. That first appeal ended with a whimper of an unpublished opinion when the court of appeals decided that it could better assess the issues after the trial court had reviewed the relevant documents in camera. As explained in more detail in our previous reports, the taxpayer sought to protect the contents of two memoranda prepared by in-house counsel concerning the tax consequences of certain transactions. Those memoranda were furnished to DLA Piper for its use in preparing a stock … Read More

Ninth Circuit Preparing for Oral Argument in Mazzei

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February 6, 2020

We have previously reported at length on the taxpayers’ pending appeal in Mazzei involving the Tax Court’s rejection on substance-over-form grounds of what the IRS has described as an “abusive Roth IRA transaction,” notwithstanding the Sixth Circuit’s pro-taxpayer ruling in Summa Holdings regarding essentially the same kind of transaction.

Oral argument in the case is scheduled for February 14, and the Ninth Circuit has now announced the three-judge panel that will hear the case:  Senior Circuit Judge Jay Bybee (appointed by Bush in 2003), Circuit Judge Daniel Collins (appointed by Trump in 2019), and Senior District Judge Barry Ted Moskowitz … Read More

Cert Denied in SIH Partners

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January 13, 2020

As expected, the Supreme Court this morning declined to review the Third Circuit’s decision in SIH Partners, thus bringing the litigation to a close.… Read More

Supreme Court Poised to Rule on SIH Partners Cert Petition

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January 7, 2020

We noted in our prior coverage of this case that SIH Partners was likely to seek Supreme Court review of the adverse decision it received in the Third Circuit regarding loan guarantees issued by a CFC, even if a grant of certiorari was a longshot.  The Court is now scheduled to consider the taxpayer’s cert petition at its January 10 conference and will likely announce its determination on January 13.

In an effort to interest the Court in the case, the taxpayer chose to focus entirely on the administrative law issues presented by the case, not on the substantive tax … Read More

Ninth Circuit Denies Petition for Rehearing

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November 21, 2019

On Tuesday, the Ninth Circuit denied Altera’s petition for rehearing en banc (which petition we discussed in our recent post here). The order issuing that denial includes a strong, 22-page dissent written by Judge Smith and joined by Judges Callahan and Bade. (Ten judges recused themselves, meaning that the vote was 10-3 against rehearing.) The dissent made several arguments for why the petition should have been granted, taking aim at the panel’s reasoning in upholding the regulation and warning about the decision’s broader effects.

Quoting State Farm, the dissent stated that it would have invalidated the regulations because … Read More

Reflections on the Ninth Circuit’s Decision in Amazon.com

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October 17, 2019

Although some time has passed (and we’ve fallen short of our hope here to get something up “soon”), we nevertheless wanted to post some thoughts on the Ninth Circuit’s unanimous affirmance of the taxpayer’s victory in the Tax Court in Amazon.com while also revisiting some of the topics that we covered here after oral argument. The panel’s opinion is brief, but it touched on several important aspects of the law under section 482.

Finding Ambiguity in the Regulatory Definition of “Intangible”

As you’ll recall, the primary dispute on appeal was whether the regulatory definition of “intangible” under Treas. Reg. § … Read More

Ninth Circuit Affirms Tax Court in Amazon.com

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August 16, 2019

In a unanimous opinion issued today, the Ninth Circuit affirmed the taxpayer’s victory in the Tax Court in Amazon.com. We previously covered the case and oral argument here. We will take some time to digest the opinion and post on its finer points soon. In the meantime, one key sentence in the opinion is worth noting because it appears to capture the thrust of the Ninth Circuit’s decision about the disputed scope of the relevant regulatory definition for the term “intangible”: “Although the language of the definition is ambiguous, the drafting history of the regulations shows that ‘intangible’ … Read More

Petition for Rehearing En Banc Filed in Altera

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July 24, 2019

As most expected, Altera filed a petition for rehearing en banc after the reconstituted three-judge panel decided to reverse the Tax Court’s invalidation of Treasury’s cost-sharing regulations. (A link to the petition is below.) As we explained previously, those regulations have been the subject of much controversy over the last two decades, and the success that Xilinx had with its petition for rehearing several years ago made it likely that Altera would ask for rehearing.

The petition picks up on one of the themes we discussed in our most recent post here. The taxpayer takes aim at the majority’s … Read More

Rehearing Denied in SIH Partners

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July 3, 2019

The Third Circuit today denied a petition for rehearing en banc in SIH Partners.  See our prior reports here.  The taxpayer now has 90 days to file a petition for certiorari.

The petition for rehearing focused more on general administrative law principles than on the substantive section 956(d) issue in the case.  In particular, the petition criticized the panel for applying Chevron deference to a regulation that did little more than parrot the statutory language.  It also argued that the panel erred in stating that the IRS was not bound by a previously published Revenue Ruling.  Given the … Read More

Observations on Changes in the Ninth Circuit’s Second Altera Decision

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June 27, 2019

As we posted earlier here (with a link to the new decision), the Ninth Circuit issued a new decision in Altera after replacing the late Judge Reinhardt with Judge Graber on the panel. But the result was the same as the withdrawn July 2018 decision—the Ninth Circuit upheld the validity of Treasury’s cost-sharing regulation that requires taxpayers to include the cost of employee stock options under qualifying cost sharing arrangements (QCSAs). Today, we present some observations after comparing the majority and dissent in the new decision with those in the Ninth Circuit’s withdrawn decision.

In the new decision, Judge Thomas … Read More

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