Two of the most consequential Supreme Court cases affecting income tax planning did not directly involve income tax issues and did not even include the word “tax” in the opinion. Nevertheless, these cases substantially affect the enforceability of IRS regulations and guidance. The full effect of these decisions will almost certainly require additional litigation in the years to come.
Loper Bright Enterprises v. Raimondo (Docket No. 22-451) was issued by the U.S. Supreme Court on June 28, 2024. Since 1984, courts were required to give deference to agency interpretations of ambiguous statutes. That rule was established in Chevron USA, Inc. v. Natural Resources Defense Council (1984) (467 U.S. 877). Loper overruled the long-standing rule providing judicial deference to agency (including the IRS) interpretations of ambiguous statutes. This deference in simple terms created an “uphill battle” to challenge IRS regulations.
