updated 2:11 PM CET, Oct 31, 2023

Monte Silver vows to pursue his Transition Tax, GILTI lawsuits 'to the very end'

Monte Silver vows to pursue his Transition Tax, GILTI lawsuits 'to the very end' Bill Oxford

Monte Silver, the Israel-based U.S. tax attorney who recently saw his and his company's legal attempt to challenge the Transition Tax element of former Donald  Trump's 2017 Tax Cuts and Jobs Act dismissed on a technicality, says he's now decided to appeal the March 28 decision, and is inviting supporters and other expat small-business owners to help him finance it.  

"I have every intention of pursuing the Transition ad GILTI lawsuits to the very end," Silver – who until now has spoken little about the ruling since it was issued more than a week ago – told his more than 300 Facebook followers in a posting this morning. 

"This means (i) the trial phase, (ii) appeals, and (iii), if we lose these, then a request for re-hearing with the Supreme Court.

"[But] our cases are very strong and victory comes to those who persist." 

He then added, before providing a link to a payment website: "Your donation to the lawsuits is appreciated." 

Silver declined to comment further, when asked today by the American Expat Financial News Journal.

As reported,  Judge Amit P. Mehta, on behalf of the U.S. District Court in Washington, D.C., ruled on March 28 that Silver and his company, Monte Silver Ltd., lacked "constitutional standing to pursue their claims" against what Silver had argued was the U.S. government's failure to carry out a Regulatory Flexibility Analysis (RFA) of certain of the Tax Cuts and Jobs Act's most potentially damaging – to overseas American small-business owners like him – elements, prior to including them in the legislation.

Silver also argued that the Transition Tax – as well as a set of other TCJA regulations known as the global intangible low-taxed income (GILTI) provisions, against which he filed what he called a "copycat" legal challenge last June – violated something called the Administrative Procedures Act, a federal statute that sets out how U.S. laws must be written, in addition to the Paperwork Reduction Act (PRA).

His Facebook statement indicates he intends to pursue his legal actions against both the Transition Tax and GILTI elements of the TCJA. 

"We have won several battles," he also pointed out, to his Facebook readers. "Two permanent fixes in GILTI and two temporary fixes in the Transition Tax." 

In its defense, the Treasury argued that it had in fact complied with the RFA, PRA, as well as having carried out a certification on economic impact, and that Silver and his company lacked "standing" to bring the lawsuit. 

Silver's announcement that he plans to challenge the Transition Tax and GILTI elements of the Tax Cuts and Jobs Act comes as Joe Biden, who took Trump's place in the White House less than three months ago, has pledged to increase a raft of taxes, including the GILTI provisions, in an effort to raise corporate tax contributions as well as to discourage U.S. businesses from "off-shoring" business operations and profits. 

Legal action in February 2019

Monte Silver low resSilver, pictured left, first filed his challenge against the Transition Tax in February, 2019, after certain asked-for last-minute changes to Trump's Tax Cuts and Jobs Act weren't made, thus leaving intact what he and others claimed was its harsh treatment of owners of small, non-U.S. businesses owned by Americans.

As reported, the recent ruling in Silver's case came in the form of a 30-page decision by the same U.S. District Court Judge who three months earlier, had denied the defendants in the case, the U.S. Internal Revenue Service et al,, a request to have it dismissed.

In his conclusion, Judge Mehta said he viewed the fact that Silver had "declare[d] that 'neither [he] nor [Monte Silver Ltd.] ended up owing any [of the one-time upfront element of the] Transition Tax at all", and that they had also "failed to provide facts sufficiently specific to rise above the level of 'conclusory allegations' to show that they face ongoing or imminent future injury," they "lack standing to seek injunctive relief".

Much of Mehta's statement consists of his picking apart the TCJA legislation and its "complicated to say the least...Transition Tax" in some detail, in order to arrive at his finding that either no IRS assessment of the economic impact of the regulation on small businesses, as required by a 1980 law known as the Regulatory Flexibility Act (RFA), was deemed to be needed; or, regarding certain other aspects, explaining how the U.S. Treasury and other bodies had ultimately "determined and certified that the final [Transition Tax] regulations would not have a significant economic impact on a substantial number of small entities within the meaning of section 601(6) of the RFA."