Monte Silver, AARO’s Tax Committee Chairman, has shared an update on Transition Tax & GILTI Tax lawsuits:
Transition tax:
1. Motion for summary judgement. We filed our motion for summary judgement, asking the judge to award us a final judgement without trial. The government has until July 9, 2020 to file an opposition, which it will, unless…. Unless what? Unless they see that they have no way out, and prefer to settle rather than face a damaging judgement against it. It may happen, but it may not. Who knows? The motion summary judgement marks the summation of 2.5 years of advocacy in that it is the last major motion we need to file in the case. Filing it brought much relief (months of hard work in preparing it), and satisfaction (knowing it was a very good brief and that our case is rock solid). To see a copy of the motion, see www.silvercolaw.com/post/motion-for-summary-judgment-filed-in-transition-tax-lawsuit. To read the favorable press coverage of the motion, see www.silvercolaw.com/post/silver-looking-to-make-the-kill-shot-in-motion-for-summary-judgment, and www.silvercolaw.com/post/tax360-on-our-transition-tax-lawsuit
2. Amicus briefs. Harvard Law School Tax Clinic (HLSTX) and Republicans Overseas (RO) filed position papers (called Amicus briefs) in support of our motion for summary judgement. Amicus briefs are position papers that independent reputable third parties file with the court in support of one of the parties to the dispute. To have the court accept the Amicus, the party must be able to shed light on the case which the parties to the dispute do not. Amicus briefs are usually only submitted in important cases before the Supreme or Appeals courts, to allow the judges to see other important aspects of the case. They are almost never filed in the lower trial courts. However, given the importance and implications of our case in both U.S. and expat circles, the court allowed HLSTX and RO to file Amicus here. It is noteworthy that the HLSTX (https://hls.harvard.edu/dept/clinical/clinics/federal-tax-clinic-lsc/) Amicus was filed in cooperation with the Center for Taxpayer Rights (https://taxpayer-rights.org/about-us/), an organization established by Nina Olsen, the former veteran head of the IRS Taxpayer Advocacy Panel. As to the RO brief, our advocacy and I personally are 100% pro-expat and small business, and 100% anti-partisan. An invitation to file an Amicus was sent to both RO and Democrats Abroad (DA). DA did not respond. To read the Amicus, see www.silvercolaw.com/post/harvard-files-in-position-paper-amicus-brief-in-favor-of-our-summary-judgment-motion and www.silvercolaw.com/post/republicans-overseas-solomon-yue-come-up-big-for-expats-in-transition-tax-lawsuit. To read the press coverage on the Amicus, see www.silvercolaw.com/post/tax360-harvard-submits-amicus-in-transition-case
GILTI Tax
Late last week we filed a copycat lawsuit related to GILTI. The goal of the GILTI lawsuit is to exempt small/medium size businesses from GILTI. To read the lawsuit, click here. www.silvercolaw.com/post/gilti-lawsuit-filed-challenging-gilti-regs-and-seeking-exemption-from-gilti-for-small-businesses. To read the press coverage, see www.silvercolaw.com/post/tax-notes-covers-the-gilti-lawsuit and www.silvercolaw.com/post/law360-covers-gilti-lawsuit
Possible relief from GILTI/Transition taxes
The coronavirus stimulus act (CARES) included a certain provision that allows businesses with loses between the years 2018-2020 (especially as a result of the corona crisis) to carry back losses and even reduce Transition and GILTI tax liability. If you had Transition tax liability for 2017, or GILTI liability for 2018 or 2019, it may be worthwhile to discuss this with your U.S. tax professional
