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Pat Smith Quoted in Tax Notes on Voluntary Dismissal of Fifth Circuit Appeal in Chamber v. IRS

Tax Notes

IPB attorney Pat Smith was quoted in an article in Tax Notes on the voluntary dismissal, agreed to by both parties, of the government’s appeal to the Fifth Circuit of the district court decision in Chamber of Commerce v. IRS. U.S. Government Appeal of Inversion Litigation Dismissed as Moot.

Speculation surrounds not only the government’s motivation for filing the motion, but the Chamber of Commerce’s motivation as well. Patrick J. Smith of Ivins, Phillips & Barker found the dismissal resolution unexpected. 

“Given what’s in the preamble [of the final regs] . . . the government was trying to build the case that they did appropriately take comments into consideration,” Smith said, adding that the development probably raised the risk that the Chamber of Commerce would lose on appeal on the issue of notice-and-comment. “I imagine [the Chamber of Commerce’s] analysis was, maybe we’ll win on the Anti-Injunction Act, but to the world, it’ll seem like a loss.”

For the government, the potential loss on the Anti-Injunction Act at the circuit level would provide enough motivation for it to seek dismissal of the appeal, Smith surmised.

“That is a very big deal for the IRS and Justice Department. Their motivation is easy to understand,” Smith said. “They’re much happier to live with the loss in the district court. Then they can say, ‘it’s just a district court. That doesn’t count for much.’”

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