United States: 3M – when courts say no

In brief

The Eighth Circuit reversed the Tax Court’s decision in 3M Co. v. Commissioner, to hold that Treas. Reg. § 1.482-1(h)(2) (“Blocked Income Regulation”) is invalid. The decision illustrates that courts have embraced the Supreme Court’s mandate in Loper Bright to fix “the boundaries of [the IRS’s] delegated authority based on the statute’s text.” Baker McKenzie Tax partners Stewart Lipeles, Vivek Patel, Christine Kim, and associate Catherine Nasi discuss the circuit court’s decision in their article, “When Courts Say No: 3M and the Future of Treasury Regulations", published yesterday in Bloomberg Tax's Tax Management International Journal.

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