Jim Gadwood Comments on Pre-Enforcement Challenges to Tax Regulations in Law360

"Disputing Proposed Tax Regs Is Growing, Panel Says"



Jim Gadwood's comments from his presentation at the Federal Bar Association's annual conference were included in coverage by Law360. Clients traditionally have had two options for overturning a tax regulation: violate it and wait for the government to prosecute them or follow it and pay before seeking a refund, Gadwood said. Each option has its drawbacks — break the law or pay — so pre-enforcement challenge to a regulation may be an attractive third option, he said. However, the approach is "cloudy with a chance of success," Gadwood said, because standing and the Anti-Injunction Act are two big obstacles to bringing a suit, as demonstrated by two recent cases.