TAXLITIGATOR – Tax Controversy (Civil & Criminal) Report

Two years ago, in August 2024, the Tax Court in Varian Medical Systems, Inc. v. Commissioner, 163 T.C. 76 (2024), faced the issue of whether a regulation issued under the provisions of the Tax Cuts & Jobs Act (TCJA) was valid. In that case, the taxpayer claimed a deduction for dividends paid by a foreign subsidiary under Internal Revenue Code sec. 245A for amounts treated as IRC sec. 78 dividends due to a mismatch between the effective date of sec. 245A and that of the TCJA amendments to sec. 78. Applying Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024), the Tax Court invalidated a regulation that gave the amendments to sec. 78 an earlier effective date than TCJA provided, holding that “No matter what the revised regulation intended to interpret, it cannot contradict the clear effective date provided for in the statutory text.”

Click Here for Full Article

Robert S. Horwitz is a Principal at Hochman Salkin Toscher Perez P.C., former Chair of the Taxation Section, California Lawyers’ Association, a Fellow of the American College of Tax Counsel, a former Assistant United States Attorney and a former Trial Attorney, United States Department of Justice Tax Division. He represents clients throughout the United States and elsewhere involving federal and state administrative civil tax disputes and tax litigation as well as defending clients in criminal tax investigations and prosecutions. In 2022 the Tax Section of the California Lawyers Association awarded him the Joanne M. Garvey Award for lifetime achievement in and contributions to the field of tax law. 

For more information, please contact Robert Horwitz at horwitz@taxlitigator.com.