Kostelanetz attorneys Andrew Weiner, Gray Proctor, and Michael Waalkes recently filed an amicus brief on behalf of the Center for Taxpayer Rights (CTR) in Wepplo v. Commissioner, a United States Tax Court case that could significantly affect taxpayers with outstanding federal tax liabilities during federally declared disasters.
The case concerns whether Internal Revenue Code § 7508A's mandatory interest-suspension provision applies to liabilities that predate the disaster. The brief supports petitioners' position that the United States Congress intended taxpayers to receive relief from interest accrual during the disaster period regardless of when the underlying liability arose. If the Tax Court adopts petitioners' interpretation, millions of taxpayers with unpaid liabilities during the COVID-19 disaster period could be entitled to meaningful interest relief.
The brief urges the Tax Court to find in favor of the taxpayers using two established canons of statutory construction:
“The first canon, which the Supreme Court long ago adopted from English law, provides that laws imposing tax are construed narrowly, which means reading exceptions expansively. … The second canon, which complements the first, is that a remedial statute such as section 7508A(a)(2) should be construed liberally to effectuate its remedial purpose.”
The brief argues that “Taxpayers owing pre-disaster liabilities are no less affected by or deserving of relief from federally declared disasters and fall within the remedial purpose intended by Congress.”
The brief also notes that the Tax Court’s decision in this case is particularly important to low-income taxpayers, because “the pandemic made it more difficult for low-income taxpayers to fulfill their payment obligations,” and “they are least equipped to pursue section 7508A relief as a result of the nationwide COVID-19 disaster. … As a practical matter, the Tax Court is the only judicial venue available to low-income taxpayers and its decisions have national reach.”
The full brief can be read on Tax Notes here.
About Andy
Andy focuses his practice on tax controversies, both civil and criminal, at all stages of the administrative and judicial process. A former U.S. Department of Justice attorney, he has briefed and argued approximately 50 tax cases in the U.S. courts of appeals. He is regent of the American College of Tax Counsel for the D.C. Circuit and a frequent writer and speaker on tax issues. He is also an adjunct professor at American University Washington College of Law.
About Gray
Gray is an experienced and accomplished appellate advocate who represents clients facing both civil and criminal tax penalties. He is board-certified as an expert in appellate practice by the Florida Bar Association and accepts cases in a wide variety of disputes in addition to tax.
About Mike
Mike is an associate with Kostelanetz LLP. He focuses his practice on civil and criminal tax controversy matters, including audits, promoter investigations, voluntary disclosures, U.S. Tax Court litigation, and criminal tax investigations.
