Government concedes virtally all defenses in GILTI case
Clearly this appears to be a small issue inserted innocently by the Treasury in its final brief on the outstanding technicalities.
But it is not.
The government has made 2 HUGE concessions:
#1 is the only defense the government really had. By withdrawing it, the government says that we (or anyone else) can bring an RFA case against a Treasury tax regulation and get around the AIA. This has serious implications for bringing RFA cases against Treaury.
#2 means that expat businesses (like Silver Ltd.) can bring RFA cases like any other US business
Why would the government concede two central defenses on its case?
In essence the question is why not let the judge decide, where they at leave have a change.
The answer? Treasury weighed the odds and decided it will lose on the remaining technicalities (jurisdictional matters – in legal words). Having a federal court rule against them on these important administrative law issues is something Treasury does not want. So it decided to cut damages. After conceding these issues, Treasury directly asked the court to refrain ruling on them. Such an adverse ruling would serve as strong precedent for all future small businesses!
What is the significance of the precedent we have now established?
Using RFA, any business can challenge core Treasury tax regs and get around the AIA! Wow! And, of course, businesses of expats can bring RFA actions like any other US business.
Next steps:
Legally, the court will rule on the motion to dismiss. Given the concessions, there is little left to rule on, as the court has ruled in our favor on the remaining issues. So, hopefully, the court will act promptly and deny the motion to dismiss. Then, schedule a motion for summary judgment.
In summary, these are hard earned victories, they are precedence setting and they have a serious potential impact on US administrative law.
Thank you Marc Zell and Noam Schreiber for your endless amazing work!!
For details about the government’s concessions, see
see https://drive.google.com/file/d/1YiCTPUgg5X6kvQsgRXR0r_QsfohkUsC1/view?usp=sharing
