On May 22, 2019, the Sixth Circuit Court of Appeals upheld the District Court’s holding that Notice 2016-66 does not violate the Administrative Procedure Act (APA). The District Court held that it didn’t have subject matter jurisdiction over the case because the Anti-Injunction Act and Declaratory Judgment Act bar law suits seeking to restrain the Government’s ability to assess and collect tax. The Sixth Circuit Court of Appeals agreed – holding that while the IRS “[does] not have a great history of complying with APA procedures, having claimed for several decades that their rules and regulations are exempt from those requirements,” the Court still does not have subject matter jurisdiction over suits seeking to enjoin the assessment or collection of taxes.
The original suit, filed by CIC Services, Inc., sought to enjoin the IRS from enforcing the disclosure requirements under Notice 216-66. After the District Court held that it didn’t have subject matter jurisdiction in the case, CIC Services, Inc. appealed to the Court of Appeals.
Because of CIC Services’ failure to enjoin enforcement of Notice 2016-66, the Notice remains in effect and requires that all micro-captives that meet the requirements of the Notice, file annual disclosure statements – the first going to OTSA and all subsequent disclosures being filed with the Taxpayer’s tax return. Please contact Steven Miller, alliantgroup, LP’s National Director of Tax or Meeren Amin, a Senior Associate at alliantNational should you have any questions about these forms or your specific disclosure requirements
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