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June 28, 2024
2024-9002

BREAKING TAX NEWS | US Supreme Court overturns Chevron , ending court deference to agency interpretations of ambiguous laws, including tax laws

The US Supreme Court today, in Loper Bright Enterprises v. Raimondo, No. 22-451 (June 28, 2024), held that federal law does not require federal courts to defer to agency interpretations of ambiguous statutory provisions, overturning the 40-year precedent in Chevron U.S.A. Inc v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). In a 6-3 ruling, the Court held that federal courts must "exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires."

Writing for the majority, Chief Justice Roberts said that Chevron was "a judicial invention that required judges to disregard their statutory duties" and the precedent's presumption that statutory ambiguities are implicitly delegated to agencies could not be squared with the APA's requirement that courts decide all relevant questions of law. In contrast to instances where the agency attempts to interpret an ambiguous statute, the majority opinion explained that, when a statute plainly delegates authority to the agency, "the courts must respect the delegation."

The Court's ruling applies to all agency decisions, including those of the IRS and Treasury Department. Tax press reports following the opinion's release suggest that the decision could have significant implications for taxpayers.

A Tax Alert on the opinion is forthcoming.

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Published by NTD’s Tax Technical Knowledge Services group; Chris DeZinno, legal editor