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SIH Partners LLLP, Explorer Corporation v. Commissioner of Internal Revenue

Paid petition · United States Court of Appeals for the Third Circuit, No. 18-1862 · judgment May 7, 2019

Certiorari denied · January 13, 2020
Pre-decision estimate: 9% cert probability (95% interval 6%–14%)

Before the decision, about 2.2× the 4.1% base rate. The model weighted this up for a Third Circuit decision below, a circuit split argued in the petition, and a dissent in the court below (flagged in the petition).

Questions presented

The Third Circuit, in conflict with the D.C., Ninth, and Federal Circuits, deferred to an IRS regulation under step two of Chevron even though the agency, in issuing the regulation, did not purport to exercise its expertise and provided no explanation for the rule other than that the agency sought “to conform” its regulation to the statute. The court then held, again in conflict with other circuits, that the IRS, in imposing more than $75,000,000 in tax liability on petitioner, was free to disregard its own published Revenue Ruling on the basis that a Revenue Ruling “is not a regulation and does not bind the IRS.” The questions presented are:

  1. Whether the Third Circuit erred in deferring to the IRS regulation under Chevron.

  2. Whether the Third Circuit erred in holding that the IRS is not bound by its own published Revenue Rulings.

Counsel of record

For petitioner
Thomas Henderson Dupree Jr.
Gibson, Dunn & Crutcher LLP

For respondent
Noel John Francisco
Jones Day

Case

Conference history
Distributed for 1 conference

Proceedings

  1. Jan 13 2020
    Petition DENIED.
  2. Dec 18 2019
    DISTRIBUTED for Conference of 1/10/2020.
  3. Dec 17 2019
    Reply of petitioner SIH Partners LLLP, Explorer Corporation, Tax Matters Partner filed.
  4. Dec 02 2019
    Brief of respondent Commissioner of Internal Revenue in opposition filed.
  5. Oct 24 2019
    Motion to extend the time to file a response is granted and the time is extended to and including December 2, 2019.
  6. Oct 23 2019
    Motion to extend the time to file a response from November 1, 2019 to December 2, 2019, submitted to The Clerk.
  7. Sep 30 2019
    Petition for a writ of certiorari filed. (Response due November 1, 2019)