Tax Court Ruling in Varian Case Is Latest Blow to IRS Rulemaking

It’s been a rough year for agency regulators looking to write and issue rules unfettered by courts or language in laws, and a unanimous US Tax Court ruling this week in Varian Medical Systems v. Commissioner may have just made it even more difficult.

The court in a 12-0 ruling found that Varian Medical Systems could take deductions as a result of a loophole included in the 2017 GOP tax law that the IRS had tried to fix through regulation. The court ruled that the language in the statute was clear, even if it resulted in a gap that taxpayers ...