An IRS penalty-backed rule challenged by a Tennessee consulting firm was found invalid Monday by a federal district court, which said the IRS didn’t follow proper rulemaking procedures when it issued the notice.
The U.S. District Court for the Eastern District of Tennessee vacated IRS Notice 2016-66, finding that the IRS failed to conduct proper notice-and-comment procedures under the Administrative Procedure Act prior to issuing the notice, and acted in an arbitrary and capricious manner in issuing the notice by not including data and facts to support the notice.
The ruling is a win for the firm, ...
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