The U.S. Chamber asked the Ninth Circuit to affirm a U.S. Tax Court decision striking down a Treasury regulation on arbitrary and capricious grounds. The amicus brief argued that the Tax Court properly rejected the IRS’s theory of “tax exceptionalism,” which the agency routinely advances in an attempt to evade the Administrative Procedure Act (“APA”) and related administrative law principles. Further, the Chamber argued that, in applying the traditional rules of administrative law, the Tax Court correctly concluded that the regulation failed under the APA for a litany of reasons, including that the IRS failed to collect, much less examine, the relevant data necessary to engage in reasoned decision making. Moreover, the Chamber’s brief explained that the IRS must, like all other federal agencies, comply with the APA to facilitate the clear, predictable rules, and fair and non-arbitrary administrative processes that businesses depend on when planning their operations and investing for their businesses.
Christopher J. Walker served as counsel for the U.S. Chamber of Commerce on behalf of the U.S. Chamber Litigation Center.