A major and potentially precedent-setting legal challenge to a key component of President Trump's December 2017 tax reform legislation, as it applies to "controlled foreign corporations", will move at last to a U.S. district courtroom in Washington, D.C. on Monday, more than two years after it was launched.
Monday's video conference hearing, which members of the public may access by dialing the court's toll-free public access line (details below), is set for 1pm Eastern Standard Time, and will see Israel-based tax attorney Monte Silver, pictured above), arguing that the U.S. Government failed to take into account the way the so-called Transition Tax element of Donald Trump's Tax Cuts and Jobs Act (TCJA) affects American expatriates and other American citizens who own small businesses that are located outside of the U.S.
According to Silver, the final version of the TCJA regulations failed to contain a "regulatory flexibility analysis" that is required by the Regulatory Flexibility Act (RFA), a U.S. law that requires federal agencies to review regulations for their impact on small businesses.
The fact that Silver's law firm, Silver & Co., qualifies as a small business itself is an element of his legal case.
The district judge hearing the case will be Amit P. Mehta, who also presided back in December, 2019, when the same court rejected a claim by the Internal Revenue Service that Silver and his fellow plaintiffs "lacked standing" in the matter, and therefore couldn't bring their suit.
As reported, Silver filed his lawsuit against the IRS and U.S. Treasury (Monte Silver Ltd. v. IRS) in January 2019.
In June of last year, he filed what he called a "copycat" legal action in the same court over another aspect of the same Trump bill – specifically, its so-called “global intangible low-taxed income” (GILTI) elements, which he says the government also failed to carry out a regulatory flexibility analysis of, prior to including them in the legislation.
Both the Transition Tax and the GILTI regulations also violate something called the Administrative Procedures Act – a federal statute that sets out how U.S. laws must be written – Silver has maintained.
Last month, the court "stayed" Silver's GILTI challenge, pending resolution of the Transition Tax matter.
In both cases, the government argues that Silver's company doesn't qualify as a small business as defined by the RFA, and therefore he lacks the legal grounds to bring his challenge.
The oral arguments in Monte Silver Ltd. v. Internal Revenue Service will begin at 1pm DST (5pm GMT, 7pm Israel Standard Time). The public may access the hearing by dialing +(877) 848-7030, access code 321-8747.
Editor's note: The GMT and Israel Standard Times for the start of the hearing on Monday have been changed since this story was originally published, to reflect the fact that the U.S. is moving to Daylight Savings Time on Sunday, March 14.
The move to Daylight Savings Time, or DST, reduces the difference between Washington, D.C. and GMT by one hour, to four hours from five, and similarly reduces the time difference with Israel.
- U.S. responds to Monte Silver's Transition Tax challenge
- Dems Abroad seeks expat American biz owners for GILTI push
- Opinion: Some questions expat small-biz owners might ask their elected reps, while replying to GILTI survey
- Expat small-biz owners reminded: Deadline for major Dems Abroad GILTI survey is Friday
- ACA to Treasury: 'de minimis rule' needed for GILTI and Transition Tax (and btw, RBT is needed too)