March 3, 2022
Sixth Circuit holds IRS notice on listed transactions involving life insurance policies is not enforceable because APA notice-and-comment procedures weren't satisfied
Reversing a district court, the Sixth Circuit has held in Mann Construction, et al. v. Commissioner that Notice 2007-83 ("Abusive Trust Arrangements Utilizing Cash Value Life Insurance Policies Purportedly to Provide Welfare Benefits") may not be enforced because the IRS failed to satisfy notice-and-comment procedures under the Administrative Procedures Act (APA) in issuing the notice. The appeals court found Notice 2007-83 conveys "legislative rules," as opposed to "interpretive rules," and therefore is subject to the APA's notice-and-comment requirements.