Supreme Court Urged to Review Taxation of Loan Guarantees

The Supreme Court needs to review a lower court ruling involving guarantees of Merrill Lynch loans, or risk “plunging taxpayers into a state of confusion” over the authority of IRS guidance, according to a petition to the high court.

The U.S. Court of Appeals for the Third Circuit held in March 2019 that the IRS could disregard a published revenue ruling when imposing a $75 million tax liability on SIH Partners LLLP Explorer Partner Corp., because such guidance isn’t binding.