SouthBank Legal attorneys Stephen Judge and Tiernan Kane recently submitted an amicus brief on behalf of the United States Chamber of Commerce in Tribune Media Co. v. Commissioner, Case No. 23-1135, an important tax case pending before the U.S. Court of Appeals for the Seventh Circuit. The case, which arises from the Tribune Media Company’s transfer of control over the Chicago Cubs in 2009, presents the question of whether the IRS may discard its own on-point regulation to achieve a result that the IRS prefers. At issue are Treasury regulations that specify that loan proceeds that a partner receives from a partnership are not immediately taxable while that partner bears any economic risk of loss on the loan. The regulations are clear on this point, and the taxpayers in this case abided by them. The Tax Court rejected the IRS’s attempt to ignore its own regulations and seek more taxes sooner than the regulations require, and the IRS appealed to the Seventh Circuit Court of Appeals. The Chamber’s amicus brief argues that the regulations as written establish a bright-line framework that provides taxpayer certainty and predictability, and that the government cannot discard its own on-point regulation just because the taxpayer wins under that regulation. The brief also argues that the IRS cannot rely on its so-called “anti-abuse” rules as a freestanding mechanism to disregard tax treatment that it dislikes, but which otherwise complies with all applicable rules. The case remains pending before the Seventh Circuit, with oral argument scheduled to take place on February 15, 2024.