On July 19, 2024, the U.S. Tax Court requested amicus briefs on the application of the codified economic substance doctrine (ESD) in Patel v. Commissioner, a case addressing deductions paid to a microcaptive insurance provider. Specifically, the court requested briefing on (1) whether section 7701(o) requires a threshold relevancy determination and (2) if there is a threshold relevance determination, what are the circumstances in which the codified economic substance doctrine is relevant. On August 22, 2024, Miller & Chevalier submitted an amicus brief on behalf of the Chamber of Commerce of the United States, warning that applying the ESD without a threshold relevance determination "would create uncertainty and confusion for companies' ordinary business planning" and "would also undermine the effectiveness of tax incentives that Congress intended to encourage certain activities." The court's decision in Patel is currently pending. 

Whether the codified ESD requires a threshold relevance determination will also be addressed when the Tenth Circuit Court of Appeals issues its opinion in Liberty Global. Oral argument in Liberty Global has been scheduled for November 19, 2024. 

For more information, please contact:

Robert J. Kovacev, rkovacev@milchev.com, 202-626-5857

Samuel A. Lapin, slapin@milchev.com, 202-626-5807

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