Jeff Paravano, Paul Schmidt Comment on U.S. Chamber Suit Over Anti-Inversion Rules

News / February 28, 2017

Partners Jeff Paravano and Paul Schmidt are quoted in an article published by Bloomberg BNA’s “Daily Tax Report” on Feb. 27, 2017. The article, “Inversions Case under Multinational Microscope,” discusses a legal battle between the U.S. Chamber of Commerce and the Treasury Department over anti-inversion regulations. The case is before the U.S. District Court for the Western District of Texas, which will decide if the Anti-Injunction Act or the Administrative Procedure Act prevails in the matter.

Under the Anti-Injunction Act, taxpayers can't sue to invalidate tax regulations unless they have already paid taxes under those rules. But the Administrative Procedure Act allows challenges to all federal regulations if the government has taken “arbitrary and capricious” actions or hasn't allowed enough time for notice and comment.

Schmidt told Bloomberg, “I think it will be very interesting to watch. There has clearly been a pendulum shift toward APA challenges. If the Chamber's position is sustained, it will create an enhanced tool for taxpayers to challenge administrative actions. It's very important.”

Paravano said he thinks the administration “certainly will repeal this regulation” eventually, but not soon. He noted that the Treasury Department needs to address several other issues, so the anti-inversion regulations are probably “fairly far down of anything Treasury is concerned about.”

Read the article (registration required).

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