· 2 min read
illuminem summarizes for you the essential news of the day. Read the full piece on Forbes or enjoy below:
🗞️ Driving the news: The Eleventh Circuit Court invalidated IRS Notice 2017-10 on June 4, stating the IRS failed to comply with the Administrative Procedure Act (APA) when issuing the notice
• The Notice had designated certain conservation easement transactions as "listed transactions," mandating disclosure due to their potential as tax avoidance schemes
• The court's decision reinforces that the IRS must follow legal procedures, including public notice and comment periods
🔭 The context: IRS Notice 2017-10 aimed to clamp down on abusive tax shelters by requiring disclosure of certain transactions
• The APA requires federal agencies to seek public comment before implementing substantive rules, which the IRS bypassed
• The Eleventh Circuit's ruling aligns with previous decisions by the Sixth Circuit and Tax Court, underscoring the necessity of adherence to procedural rules
🌍 Why it matters for the planet: This ruling emphasizes the importance of transparency and public participation in regulatory processes, which can influence the governance of environmental and conservation-related tax incentives
• Ensuring fair and legally sound implementation of such rules supports sustainable financial practices
⏭️ What's next: The IRS may need to revisit and potentially reissue the notice through proper APA procedures, allowing for public input
• This process could lead to more refined and accepted regulations that effectively target abusive tax shelters while complying with legal standards
💬 One quote: "All taxpayers should be relieved that the Eleventh Circuit joined the Sixth Circuit and the Tax Court in reaffirming the importance of notice and the opportunity for public comment before an administrative agency can unilaterally dictate which transactions trigger these sanctions." — David Foster, tax partner at Kirkland & Ellis
📈 One stat: In 2022, the IRS collected over $4.1 trillion in gross taxes, highlighting the agency's vast reach and influence over taxpayer compliance
Click for more news covering the latest on sustainable finance
