Liberty Global Suit Leads Judge to Question Tax Deduction Rules

A federal judge expressed concern that the Treasury Department did not seek public comments on temporary rules regarding foreign dividend deductions during oral arguments held Friday.

Telecommunications company Liberty Global Inc. is suing the U.S. for a $109 million refund of taxes, penalties, and interest. The company alleges that temporary regulations (T.D. 9865) limiting deductions under tax code Section 245A on certain foreign dividends are invalid. Treasury issued final rules in August of 2020.

Liberty Global, in its suit filed in the U.S. District Court for the District of Colorado, said it was permitted to claim a deduction ...