Petition for Writ of Certiorari — Monte Silver, Ltd., Petitioner v. Internal Revenue Service, et al.

NO. ______

In the

Supreme Court of the United States

MONTE SILVER, LTD., AN ISRAELI CORPORATION,

Petitioner,

v.

INTERNAL REVENUE SERVICE, ET AL.,

Respondents.

__________________________

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the

District of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

Noam Schreiber

Of Counsel

34 Ben Yehuda St.

15th Floor

Jerusalem, Israel 9423001

011-972-2-633-6300

noam.schreiber@fandz.com

L. Marc Zell

Counsel of Record

ZELL & ASSOCIATES

INTERNATIONAL ADVOCATES, LLC

1345 Ave. of the Americas, 2nd Floor

New York, NY 10105

(212) 971-1349

mzell@fandz.com

March 3, 2023

SUPREME COURT PRESS

Counsel for Petitioner

♦

(888) 958-5705

♦

BOSTON, MASSACHUSETTS

i

QUESTION PRESENTED

This case presents an important question as to

the proper application of Article III standing to small

businesses who challenge regulations under the

Regulatory Flexibility Act, 5 U.S.C. § 601 et seq.

(“RFA”).

Petitioner, a small business, challenged regulations

that were issued by Respondents in implementing

the so-called Transition Tax [26 U.S.C. § 965] under

the Tax Cuts and Jobs Act of 2017 (“TCJA”), Pub. L.

115–97 (2017). The lawsuit was dismissed for lack of

Article III standing.

The question presented is whether a small

business has Article III standing to bring an RFA

action challenging a regulation, where:



it is the object of the regulation; and



where its past and prospective compliance

costs are traceable to an RFA procedural

violation which is the basis for its standing.

ii

PARTIES TO THE PROCEEDINGS AND

CORPORATE DISCLOSURE STATEMENT

Petitioner and Plaintiff-Appellant below

●

Monte Silver, Ltd. is an Israeli private corporation, wholly owned by Monte Silver,

Monte Silver, Ltd. does not have a parent

corporation or other parent entity.

Respondents and Defendants-Appellees below

●

Internal Revenue Service

●

United States Department of Treasury

●

Charles Rettig in his official capacity as

Commissioner of the Internal Revenue

Service

●

Janet Yellen, in her official capacity as

Secretary of the Treasury.

iii

LIST OF PROCEEDINGS

United States Court of Appeals for the District of

Columbia Circuit

No. 21-5116-cv

Monte Silver et al., Plaintiffs/Appellants, v.

Internal Revenue Service, et al., Defendants/Appellees

Date of Final Opinion: December 6, 2022

_________________

U.S. District Court for the District of Columbia

No. 19-cv-247

Monte Silver et al., Plaintiffs, v.

Internal Revenue Service, et al., Defendants

Date of Final Opinion and Order: March 28, 2021

Date of Order on Motion for Reconsideration:

November 1, 2021

iv

TABLE OF CONTENTS

Page

QUESTION PRESENTED .......................................... i

PARTIES TO THE PROCEEDINGS AND

CORPORATE DISCLOSURE STATEMENT ............ ii

LIST OF PROCEEDINGS ......................................... iii

TABLE OF AUTHORITIES .................................... viii

OPINIONS BELOW ................................................... 1

JURISDICTION.......................................................... 1

STATUTORY PROVISIONS INVOLVED ................. 2

INTRODUCTION ....................................................... 2

STATEMENT OF THE CASE .................................... 6

A. The Regulatory Flexibility Act ........................ 6

B. The Creation of the Transition Tax

Regulatory Scheme .......................................... 9

C. Respondents issue the Proposed and Final

Transition Tax Guidance ............................... 11

D. Procedural background .................................. 14

REASONS FOR GRANTING THE PETITION ....... 16

I.

THE DECISIONS BELOW CONFLICT WITH

THIS COURT’S PRECEDENT ............................... 16

A. The Decisions Below Are in Direct

Conflict with This Court’s “Object of”

Article III Standard .................................. 16

B. The Decisions Below Are in Direct

Conflict with This Court’s Procedural

Standing Jurisprudence ........................... 18

v

TABLE OF CONTENTS – Continued

Page

II. THE DECISIONS BELOW CONFLICT WITH THE

DECISIONS OF ALL THE OTHER COURTS OF

APPEALS .......................................................... 21

A. The Decisions Below Conflict with the

Standards Used by Other Courts of

Appeals Applying the “Object of”

Standard.................................................... 21

B. The Decisions Below Conflict with the

Decisions of Other Courts of Appeals

Confronted with Procedural Injury

Cases ......................................................... 24

III. THE QUESTION PRESENTED IS OF CRUCIAL

IMPORTANCE AND WARRANTS REVIEW ............. 27

A. The Decision Below, If Allowed to

Stand, Will Frustrate the Congressional

Mandate and Render the RFA a Dead

Letter ......................................................... 27

B. The Decisions Below Insulate

Respondents from Judicial Review .......... 29

C. The Question Presented Is of Exceptional

Importance ................................................. 30

D. This Case Is the Ideal Vehicle to Address

the Question Presented ............................ 31

CONCLUSION.......................................................... 33

vi

TABLE OF CONTENTS – Continued

Page

APPENDIX TABLE OF CONTENTS

OPINIONS AND ORDERS

Judgment of the United States Court of Appeals

for the District of Columbia Circuit

(December 6, 2022) ............................................. 1a

Order of the United States District Court for the

District of Columbia (November 1, 2021) .......... 7a

Memorandum Opinion of the United States

District Court for the District of Columbia

(March 28, 2021) ............................................... 22a

Memorandum Opinion and Order of the United

States District Court for the District of

Columbia (December 24, 2019) ........................ 60a

STATUTORY PROVISIONS

Pertinent Statutory Provisions of the RFA ........... 68a

5 U.S.C. § 603 ..................................................... 68a

5 U.S.C. § 604 ..................................................... 70a

5 U.S.C. § 605 ..................................................... 71a

5 U.S.C. § 611 ..................................................... 72a

vii

TABLE OF CONTENTS – Continued

Page

OTHER DOCUMENTS

Monte Silver Memo Analyzing Treasury Regulatory

Authority (October 22, 2018) .................................. 73a

Email Correspondence Between Monte Silver

and Treasury (June 4, 2018) ............................ 78a

Certification in Proposed Guidance ....................... 80a

Certification in Final Guidance.............................. 83a

GAO Report: Treasury and OMB Need to

Reevaluate Long-Standing Exemptions of

Tax Guidance .................................................... 90a

Report of Democrats Abroad: Tax Filing from

Abroad Research on Non-Resident Americans

and U.S. Taxation March 2019 ........................ 94a

Letter from Democrats Abroad to Senator

Hatch Et Al. (April 20, 2018) ........................... 97a

Memorandum of Law of the RO Amici Curiae

in Support of the Plaintiffs’ Motion for

Summary Judgment (June 9, 2020) .............. 109a

Memorandum of Law of Amici Curiae The

Center for Tax Payer Rights in Support

of the Plaintiffs (May 18, 2020) ..................... 128a

viii

TABLE OF AUTHORITIES

Page

TABLE OF AUTHORITIES

CASES

Arkansas Right to Life State Pol. Action

Comm. v. Butler, 146 F.3d 558

(8th Cir. 1998) ................................................... 22

Aroostook Bank of Micmacs v. Ryan,

404 F.3d 48 (1st Cir. 2005) ................................ 23

Cahaba Riverkeeper v. U.S. Envtl. Prot.

Agency, 938 F.3d 1157 (11th Cir. 2019)............ 24

CIC Servs., LLC v. Internal Revenue Serv.,

141 S.Ct. 1582 (2021) ........................................ 30

Cohens v. Virginia,

6 Wheat. 264 (1821) ............................................ 29

Colorado River Water Conservation Dist.

v. United States, 424 U. S. 800 (1976) .............. 29

Contender Farms, L.L.P. v. U.S. Dep’t of

Agric., 779 F.3d 258 (5th Cir. 2015) ................. 21

Ctr. for Biological Diversity v. Env’t Prot.

Agency, 861 F.3d 174 (D.C. Cir. 2017) ................ 6

Direct Mktg. Ass’n v. Brohl,

575 U.S. 1 (2015) ............................................... 30

Green v. Bank of Am., NA,

512 F. App’x 665 (9th Cir. 2013) ....................... 22

Gulf Restoration Network v. Salazar,

683 F.3d 158 (5th Cir. 2012) ............................. 26

Iowa League of Cities v. Envtl. Prot. Agency,

711 F.3d 844 (8th Cir. 2013) ....................... 24, 26

Klein v. United States Department of Energy,

753 F.3d 576 (6th Cir. 2014) ............................. 26

ix

TABLE OF AUTHORITIES – Continued

Page

Lamar v. Ebert,

No-15-7668 (4th Cir. 2017) ............................... 23

Lewis v. Governor,

944 F.3d 1287 (11th Cir. 2019) ......................... 23

Lujan v. Defs. of Wildlife,

504 U.S. 555 (1992) .... 5, 6, 15, 16, 17, 18, 20, 21,

............................................................... 23, 25, 26

Massachusetts v. E.P.A.,

549 U.S. 497 (2007) ............................................. 21

Narragansett Indian Tribal Historic Pres.

Office v. Fed. Energy Regul. Comm’n,

949 F.3d 8 (D.C. Cir. 2020) ............................... 26

New Mexico v. Dept of the Interios,

854 F.3d. 1207 (10th Cir. 2017) ............ 23, 24, 26

Nkihtaqmikon v. Impson,

503 F.3d 18 (1st Cir. 2007) .......................... 24, 26

Owner-Operator Indep. Drivers Ass’n, Inc.

v. Fed. Motor Carrier Safety Admin.,

656 F.3d 580 (7th Cir. 2011) ............................. 22

Parsons v. U.S. Dep’t of Justice,

801 F.3d 701 (6th Cir. 2015) ............................. 24

Rice v. Vill. of Johnstown, Ohio,

30 F.4th 584 (6th Cir. 2022).............................. 22

Shalom Pentecostal Church v. Activ Sec’y US

Dep’t of Homeland Sec.,

783 F.3d 156 (3rd Cir. 2015) ............................. 23

South Carolina v. Limehouse,

549 F.3d 324 (4th Cir. 2008) ............................. 26

x

TABLE OF AUTHORITIES – Continued

Page

Sprint Communications, Inc. v. Jacobs,

571 U.S. 69 (2013) ............................................. 29

State National Bank of Big Spring v. Lew,

795 F.3d 48 (D.C. Cir. 2015) ............................. 23

State v. Environmental Protection Agency,

587 F.3d 422 (D.C. Cir. 2009) ........................... 26

Sugar Cane Growers Co-op. of Fla.

v. Veneman, 289 F.3d 89 (D.C. Cir. 2002) ............ 26

Summers v. Earth Island Inst.,

555 U.S. 488 (2009) ........................................... 17

Thole v. U.S. Bank N.A,

140 S.Ct. 1615 (2020) ........................................ 31

Tweed-New Haven Airport Auth. v. Tong,

930 F.3d 65 (2nd Cir. 2019) .............................. 22

U.S. v. Sisson,

399 U.S. 267 (1970) ........................................... 30

WildEarth Guardians v. U.S. Dep’t of Agric.,

795 F.3d 1148 (9th Cir. 2015) ..................... 24, 26

STATUTES

5 U.S.C. § 601 ......................................................... i, 20

5 U.S.C. § 603 .......................................... 2, 4, 7, 12, 19

5 U.S.C. § 604 .............................................. 2, 4, 13, 19

5 U.S.C. § 605 .............................................................. 2

5 U.S.C. § 605(b) ............. 4, 7, 8, 12, 13, 18, 19, 27, 28

5 U.S.C. § 611 .............................................................. 2

5 U.S.C. § 611(a) ......................................................... 7

xi

TABLE OF AUTHORITIES – Continued

Page

5 U.S.C. § 611(a)(4)(A) .............................................. 26

26 U.S.C. § 960 .......................................................... 10

26 U.S.C. § 965 ............................... i, 2, 3, 9, 11, 12, 13

26 U.S.C. § 965(i) .......................................... 12, 19, 20

28 U.S.C. § 1254(1) ..................................................... 1

44 U.S.C. § 3501 ........................................................ 11

H.R. 5, 115th Cong. tit. III (2017),

Small Business Regulatory Flexibility

Improvements Act ............................................. 30

H.R. Rept. 104-49 (1995),

Regulatory Flexibility Act Amendments .... 27, 28

H.R. Rept. 113-288 (2013),

Regulatory Flexibility Improvements Act

of 2013 .......................................................... 27, 28

Pub. L. 115–97 (2017) .................................................. i

Pub. L. No. 104-121, § 242, 110 Stat. 847

(1996) ............................................................... 7, 8

Pub. L. No. 96–354, § 2, 94 Stat. 1164,

Act of Sept. 19, 1980 ............................................ 7

Public L. 104-121,

Small Business Regulatory Enforcement

Fairness Act of 1996 .......................................... 20

xii

TABLE OF AUTHORITIES – Continued

Page

REGULATIONS

83 Fed. Reg. 39514 (Aug. 9, 2018),

Proposed Guidance ............................................ 11

84 Fed. Reg. 1838 (Feb. 5, 2019) .............................. 13

IRC 962.......................................... 3, 10, 11, 12, 13, 20

IRC 1361.................................................................... 12

EXECUTIVE ORDERS

Executive Order 12866,

Review of Tax Regulations Under

Executive Order 12866 (April 11, 2018) ............ 11

CONGRESSIONAL RECORD

142 Cong. Rec. S3242

(daily ed. Mar. 29, 1996) ..................................... 8

142 Cong. Rec. S3245

(daily ed. Mar. 29, 1996) ..................................... 8

OTHER AUTHORITIES

Eric D. Phelps,

The Cunning of Clever Bureaucrats:

Why the Small Business Regulatory

Enforcement Fairness Act Isn’t Working,

31 PUB. CONTRACT L. J. 1 (2001) ......................... 8

Government Accountability Office,

Regulatory Guidance Processes: Treasury

and OMB need reevaluate long-standing

exemptions of tax regulations and

xiii

TABLE OF AUTHORITIES – Continued

Page

guidance, available at https://www.gao.

gov/assets/gao-16-720.pdf (2016) ........................ 4

Ian Halligan,,

Tax reform: Individual taxpayers and the

Sec. 962 election, available at https://

www.thetaxadviser.com/issues/2018/oct/

individual-taxpayers-sec-962-election.

html .................................................................... 11

Keith W. Holman,

The Regulatory Flexibility Act at 25: Is the

Law Achieving its Goal?, 33 FORDHAM

URBAN L. J. 101 (2006) ........................................ 7

Kristin E. Hickman & Gerald Kerska,

Restoring the Lost Anti-Injunction Act,

103 VA. L. REV. 1683 (2017) .............................. 29

Richard J. Pierce, Jr.,

Is Standing Law or Politics?,

77 N.C. L. REV. 1741 (1999) .............................. 29

RSM,

Cushioning the double-tax blow: The

section 962 election, available at https://

rsmus.com/insights/services/business-tax/

the-section-962-election.html............................ 11

Stuart Shapiro & Deanna Moran,

The Checkered History of Regulatory

Reform Since the APA, 19 LEGIS. & PUB.

POL. 141 (2016) ................................................ 7, 8

1

OPINIONS BELOW

The order of the District Court granting summary

judgment in Respondents’ favor is reported at Silver

v. Internal Revenue Serv., 531 F.Supp.3d 346 (D.D.C.

2021). (App. 22a). The order of the District Court

modifying and denying the motion for reconsideration

is reported at Silver v. Internal Revenue Serv., 569

F.Supp.3d 5 (D.D.C. 2021). (App. 7a).

The United States Court of Appeals for the District of Columbia Circuit per curiam order affirming

the orders of the District Court appears at Monte Silver

& Monte Silver, Ltd. v. Internal Revenue Serv., No.

21-5116, 2022 WL 17420308 (D.C. Cir. Dec. 6, 2022).

(App. 1a). These opinions were not designated for

publication.

JURISDICTION

The judgment of the Court of Appeals was entered

on December 6, 2022. This Court has jurisdiction

under 28 U.S.C. § 1254(1).

2

STATUTORY PROVISIONS INVOLVED

Pertinent statutory provisions are reproduced at

App. 68a-72a.

● 5 U.S.C. § 603 (App.68a)

● 5 U.S.C. § 604 (App.70a)

● 5 U.S.C. § 605 (App.71a)

● 5 U.S.C. § 611 (App.72a)

INTRODUCTION

In December 2017, the Tax Cuts and Jobs Act

(“TCJA”) became law. The TCJA created a new

international tax called the “Transition Tax” (“§ 965”).

The purpose of the Transition Tax was to impose U.S.

tax on the more than $2 trillion that multinational

corporations such as Google and Apple had accumulated in the “controlled foreign corporations” (“CFCs”)

they established in low-tax jurisdictions. The Transition

Tax effectively “pierced” the CFC’s corporate veil and

attributed to its U.S. shareholders the profits that

had accumulated in the CFC since 1986.

Shortly after the Transition Tax became law,

Monte Silver, a U.S. citizen taxpayer, California attorney and the sole shareholder of Petitioner, realized

that this highly complex law applied to Petitioner (a

3

CFC) and the modest profits it had accumulated.1

These profits have been the principal source of income

to support the business and Silver’s family. Since

its formation, all Petitioner’s accumulated profits

had already been fully taxed at high Israeli corporate

tax rates. In other words, the Transition Tax was a

double tax on the same income. This had a devastating

financial impact upon Petitioner and the Silver family.

Recognizing the harsh impact the Transition Tax

would have on Petitioner and other similarly situated

small businesses, Monte Silver rallied hundreds of

small business owners to write senior officials of

Respondents to provide administrative relief. That

effort was partially successful. In June 2018, the Secretary of Treasury signed an order granting small businesses temporary relief from paying the Transition Tax.

(App.78a). During this time, Silver advised Respondents how they could easily and permanently reduce

or eliminate the harm that the Transition Tax was

causing small businesses. (App. 73a-77a).

In August 2018, Respondents issued their proposed

regulation (“Guidance”) which by its own language

“implemented” the Transition Tax. The Guidance

included regulations to § 965 and related IRC § 962

(“§ 962”). The Guidance was massive and contained

hundreds of pages of technical tax jargon which only

tax experts of multinationals could understand.

1 Petitioner is a professional corporation through which Silver

practices U.S. law and invests in U.S. real estate. Petitioner has

maintained offices in the United States and Israel for many years.

Petitioner’s activities have contributed to the U.S. economy

and tax revenue both directly, and through reputable U.S.-based

partners for years.

4

As to the RFA, Respondents did not comply with

the requirements of § 603 and § 604 which were

designed to protect Petitioner and approximately

200,000 other similarly situated small businesses.

(See App.95a, 114a and 86a). Rather, the Secretary of

Treasury issued a boilerplate RFA § 605(b) certification

that the Guidance would not have a significant economic impact on small businesses. (App.80a-82a).

Respondents’ § 605(b) certification was issued just two

months after the Secretary himself provided small

businesses temporary administrative relief from the

Transition Tax.

Almost one hundred small businesses filed over

half the total number of comments submitted during

the notice and comment phase. Respondents issued

the final Guidance in January 2019. The final Guidance

contained a similar boilerplate RFA § 605(b) certification. (App.85a-89a).

In January 2019, Petitioner commenced a lawsuit

against Respondents under the RFA, arguing that

Respondents’ § 605(b) certifications were invalid.

Notably, the GAO found that Respondents use

boilerplate certifications to circumvent the RFA over

99.5% of the time.2 (App.90a-93a).

2 Government Accountability Office, Regulatory Guidance

Processes: Treasury and OMB need reevaluate long-standing

exemptions of tax regulations and guidance, available at https://

www.gao.gov/assets/gao-16-720.pdf, at 22-23 (2016) (“We found

that Treasury and IRS rarely perform a regulatory flexibility

analysis assessing a regulation’s impact on small businesses and

other small entities as generally required by the Regulatory

Flexibility Act (RFA). In our review of over 200 tax regulations

issued from 2013 to 2015, only two regulations’ preambles

included a regulatory flexibility analysis.”)

5

Under this set of undisputed facts, Petitioner’s

Article III standing should have been a non-issue on

three grounds.

First, under this Court’s decision in Lujan v.

Defs. of Wildlife, 504 U.S. 555 (1992), there is little

question as to a plaintiff’s Article III standing when

that plaintiff is an “object of” the challenged regulation.

Yet, despite both this clearly articulated tenet of

Article III standing, and the undisputed facts that

that Petitioner (i) was the object of the Guidance,

and (ii) suffered past (and would suffer future) concrete

monetary injury, both the District Court and the

Court of Appeals determined that Petitioner lacked

standing under Article III and dismissed the lawsuit

on Article III grounds.

Second, the Court of Appeals ignored Lujan’s

holding as to traceability in procedural standing cases.

In such cases the plaintiff must establish that the

“procedures in question are designed to protect some

threatened concrete interest of his that is the ultimate basis of his standing.” Lujan, 504 U.S. at 573, n.

8. Deviating from this standard, the Court of Appeals

required Petitioner to trace—indeed, pinpoint—its

injury to the exact substantive sections of the Guidance, rather than to the procedural statute (i.e., the

RFA), without citing any support for its position. In

our case, Article III standing is based on Petitioner’s

personal concrete interests to have Respondents comply

with the RFA, which is designed to provide solutions

to reduce or avoid Petitioner’s compliance costs.

Rather than do so, Respondents violated Petitioner’s

procedural rights by issuing invalid certifications.

6

Third, once a plaintiff’s concrete interest has

been traced to the procedural violation which is both

(i) designed to protect it and (ii) serves as its basis for

standing, the elements of redressability and imminence

are relaxed. Lujan, 504 U.S. at 572, n. 7; Ctr. for

Biological Diversity v. Env’t Prot. Agency, 861 F.3d

174, 183 (D.C. Cir. 2017).

Here too, the lower courts deviated from Lujan.

Ignoring these relaxed standards, the courts below

held Petitioner to heightened standards of immediacy

and redressability which were impossible to meet.

If the RFA is to provide an effective remedy for

small businesses like Petitioner, this Court must intervene to explain how Article III standing requirements

should be applied to assure adequate judicial review

of agency rulemaking. Petitioner’s status as an “object

of” the Guidance, coupled with the fact that Petitioner’s

concrete personal injury was traceable to Respondents’

violation of the RFA’s procedural requirements should

have foreclosed any question as to Petitioner’s Article

III standing.

STATEMENT OF THE CASE

A.

The Regulatory Flexibility Act

Enacted originally in 1980, the RFA was intended

to address the plight of small businesses dealing with

the burdensome effect of federal law regulations. In

creating the RFA, Congress noted that “uniform

Federal regulatory and reporting requirements have

in numerous instances imposed unnecessary and

disproportionately burdensome demands [ . . . ] upon

7

small businesses [ . . . ] with limited resources.”. RFA,

Act of Sept. 19, 1980, Pub. L. No. 96–354, § 2, 94 Stat.

1164.3

The RFA required agencies to fit regulations to

the scale of the businesses by requiring agencies to

(i) solicit small business input, (ii) consider flexible

regulatory proposals, including exempting small businesses from the agency action, and (iii) explain the

rationale for their actions.

To accomplish these goals, the RFA required government agencies to conduct an “initial regulatory

flexibility analysis” (“IRFA”) on proposed regulations

and a “final regulatory flexibility analysis” (“FRFA”)

upon issuance of the final rule. 5 U.S.C. § 603-§ 604.

An RFA analysis is not required if the “head of the

agency [ . . . ] certifies that the rule will not, if

promulgated, have a significant economic impact on

a substantial number of small entities.” 5 U.S.C.

§ 605(b) (“RFA Certification”) (italics not in original).

At the time of its original enactment, § 605(b) was

not subject to judicial review. See 5 U.S.C. § 611(a),

amended by Pub. L. No. 104-121, § 242, 110 Stat. 847,

865-66 (1996).

Over the next 16 years following the passage of

the RFA it became clear that the statute had no teeth.

Congress was “extremely dissatisfied” with the manner

in which federal agencies had failed to enforce the

3 See generally, Keith W. Holman, The Regulatory Flexibility

Act at 25: Is the Law Achieving its Goal?, 33 FORDHAM URBAN L.

J. 101 (2006); Stuart Shapiro & Deanna Moran, The Checkered

History of Regulatory Reform Since the APA, 19 LEGIS. & PUB.

POL. 141, 152-159; 172-176 (2016).

8

RFA.4 Thus, in 1996, after years of debate, Congress

enacted the Small Business Regulatory Enforcement

Fairness Act (“SBREFA”), Pub. L. No. 104-121, 110

Stat. 857 (codified as amended in scattered sections

of 5 U.S.C.), amending the RFA in two important

ways: First, the SBREFA granted small businesses

the right to judicial review of agency § 605(b) certifications and other adverse agency action. Second,

Respondents’ regulations were specifically made subject

to the RFA.5

Under the amended RFA, any doubt that the rule

would impact small businesses was to be resolved

against using § 605(b) certifications. Moreover, where

the government elected to make a § 605(b) certification,

the RFA required that its decision include detailed

factual and policy findings. Boilerplate language (of the

sort challenged by Petitioner) was not permissible.6

Nevertheless, despite Congress’ clear intent in amending the RFA, Respondents for years have circumvented

the RFA in over 99.5% of the time.7

4 Shapiro & Moran, supra fn. 3 at 172-173.

5 The IRS was one of the chief culprits singled out for failing to

implement RFA protections for small businesses. Under the

SBREFA, Congress specifically directed that “the IRS should

take an expansive approach [ . . . ] when considering whether to

conduct a regulatory flexibility analysis.” 142 Cong. Rec. S3242,

at S3245 (daily ed. Mar. 29, 1996).

6 Simple boilerplate statements that the rule will not have such

an effect are patently inadequate under the RFA. Rather, sufficient analysis must be performed to apprise the regulated

community of the reasons for the certification. Id.

7 See fn 2. See also, Eric D. Phelps, The Cunning of Clever

Bureaucrats: Why the Small Business Regulatory Enforcement

Fairness Act Isn’t Working, 31 PUB. CONTRACT L. J. 1, 123-142.

9

B.

The Creation of the Transition Tax Regulatory Scheme

The Transition Tax regulates two entities: (i) CFCs

(like Petitioner and Google’s foreign subsidiaries)

and (ii) the CFC shareholders (like Monte Silver and

Google U.S.). The first sentence of Section 965(a) makes

it clear that Petitioner, as a CFC, is the “object of” the

statute. The Guidance uses the term “CFC” and its

derivative terms 2,023 times.

The statute and the Guidance impose on Petitioner

(i) double taxation on its accumulated profits and (ii)

complex compliance costs. It is impossible to determine

the shareholder’s Transition Tax liability without the

input of the CFC. The CFC’s involvement in determining the Transition Tax liability is essential. It is

the CFC and its tax professionals that file annual

foreign corporate tax returns. The accounting and tax

data are those of the CFC. It is the CFC’s tax professionals who must calculate the tax in accordance

with the instructions and definitions of the statute

and implementing Guidance. And, while the obligation

to pay Transition Tax is ultimately imposed upon the

U.S. shareholder, the funds needed to pay any tax

due will in most cases (like that of the Petitioner

here) come from the CFC’s bank account, thus also

directly affecting the CFC.

As to Petitioner, the Transition Tax and the Guidance imposed devastating double tax and compliance

costs. And to add insult to injury, under the Transition

Tax and Respondents’ Guidance, Google Israel was

treated far better than Petitioner. The Transition

Tax and Guidance allowed U.S. corporate shareholders

like Google U.S.A., to reduce their Transition Tax

liability by crediting the foreign corporate taxes that

10

Google Israel had previously paid in Israeli corporate

tax. But for small business CFCs owned by individual shareholders like Petitioner and Silver, foreign

tax credit was not available. (See 26 U.S.C. § 960).

Under the law, Petitioner was not allowed to use the

corporate taxes it paid in Israel to offset its Transition

Tax liability. As Google Israel paid high corporate

taxes in Israel, Google U.S. could use these credits,

thus zeroing any Transition Tax for accumulated

profits in Google Israel. Not so with Petitioner and

Silver. Without foreign credits, Petitioner’s profits

were subject to double taxation. Given that the

Transition Tax applied to accumulated profits that

had accrued since 1986, the impact was disastrous.

The only way an individually owned CFC could

mitigate the devastating effect of the Transition Tax

was by making a so-called § 962 election.8 Section

962 allows an individual U.S. shareholder (such as

Monte Silver) to make an election that would treat

him as a corporate U.S. shareholder (like Google U.S.).

This constructive U.S. corporation is then entitled

to use Petitioner’s foreign-Israeli tax credits, thus

avoiding double taxation.

With no other alternative to avoid double taxation,

Petitioner and Silver prepared and filed the § 962

election to the best of their ability. They subsequently

had to amend the election and incur additional compliance costs to “get it right,” or so they hoped.

However, unknown to the tax compliance industry

or Petitioner at the time, making the election carries

8 Enacted decades ago, § 962 was an archaic, unknown, never

used provision. Indeed, until the Transition Tax, the § 962 regulations had never been amended in over fifty years.

11

with it harmful long-term implications. Specifically,

under § 962(d),9 each time Petitioner distributes a

dividend to Silver in the future would require Petitioner

to comply with highly complex rules and incur significant compliance costs. 10

C.

Respondents Issue the Proposed and Final

Transition Tax Guidance

On August 9, 2018, Respondents published the

proposed Guidance. 83 Fed. Reg. 39514 (Aug. 9, 2018).

The Guidance was designated as a “significant regulatory action” under section 3(f) of Executive Order

12866 and the Memorandum of Agreement (MOA),

Review of Tax Regulations under Executive Order

12866 (April 11, 2018). The proposed Guidance was

massive—hundreds of pages of complex corporate tax

jargon that impact Petitioner and Silver.

Unlike the Paperwork Reduction Act [44 U.S.C.

§ 3501, et seq.] provisions which were on page two of

9 Section 962(d) states that each time a foreign company issues

a dividend to a shareholder who has made a § 962 election, the

corporation’s earnings and profits must be “included in gross

income to the extent that such earnings and profits so distributed

exceed the amount of tax paid under this chapter on the amounts

to which such election applies.” There was no dispute that future

dividends will generate future compliance costs due to the § 962

election.

10 For more information concerning the close relationship

between § 965 and § 962, see Tax reform: Individual taxpayers

and the Sec. 962 election, Ian Halligan, ATT, CTA (U.K.), E.A.,

Chicago, and Lynette Stolarzyk, J.D., LL.M., Minneapolis, available

at https://www.thetaxadviser.com/issues/2018/oct/individualtaxpayers-sec-962-election.html; Cushioning the double-tax blow:

The section 962 election, available at https://rsmus.com/insights/

services/business-tax/the-section-962-election.html.

12

the proposed Guidance, those of the RFA were hidden

deep inside on page 111. The proposed Guidance did

not contain an IRFA as required a 5 U.S.C. § 603.

Instead, it contained a boilerplate § 605(b) certification.

(App.80a-82a). The certification did not include a single

substantiating fact. At that time, Silver raised the

issue of the inadequate certification with Respondents.

Significantly, the proposed Guidance did not just

include § 965 regulations. Recognizing the importance

of the § 962 election, Respondents’ Guidance included

regulations under § 962 as well. One Guidance. One

§ 605(b) certification.

Thus, now Petitioner became subject to both the

regulations of § 965 and § 962 issued as part of the

Guidance.

However, like the § 965 regulations in the Guidance, Respondents took no action to address small

business concerns relating to the § 962 election. Such

action could have included equating between the tax

treatment of “§ 962” businesses and those under § 965

(i)11, or merely by explaining the future consequences of

the § 962 election and how to comply with § 962(d)

when future dividends were distributed. Rather, Respondents simply issued a § 605(b) certification for the

entire Guidance, those related to § 965 and those

related to § 962. As a result, Petitioner and a vast

number of other small businesses were left to contend

11 Section 965(i) in essence creates a life-time deferral from the

Transition Tax where the CFC is owned by an S-Corporation.

(IRC 1361) S-corps are usually used in family-run owned corporations. Yet such businesses can be huge multinational corporations, such as Koch Industries, or Mars.

13

with impenetrable regulations of § 962, in addition to

those under § 965.

In the notice and comment period following the

issuance of the proposed Guidance, Silver and almost

one hundred other small businesses submitted comments advising Respondents of the harm that the

statute and proposed Guidance had caused and would

continue to cause them. Comments from these small

businesses amounted to more than half of all the comments received during the notice and comment phase.

At the public hearing on October 20, 2018, on

the proposed Guidance, these concerns were reiterated

by a prominent American expat association—

American Citizens Abroad.

Early in 2019, Respondents issued the final § 965/

§ 962 Guidance. The Final Guidance was even more

voluminous than the proposed version, covering nearly

100 pages of very fine print in the Federal Register.

84 Fed. Reg. 1838 (Feb. 5, 2019). The Final Guidance

did not contain a § 604 FRFA. Rather, once again,

Respondents avoided making such an analysis by using

a boilerplate § 605(b) certification. (App.85a-89a).12

On January 30, 2019, Petitioner and Silver commenced a lawsuit in the United States District Court

for the District of Columbia, challenging the rules

promulgated under the Guidance for failure to comply

with the RFA.

12 A material way in which Respondents unlawfully abused the

RFA was by manipulating the definition of “small business” to

categorically exclude all foreign businesses from qualifying as

small businesses under the RFA. (App. 85a). The District Court

rejected this baseless position (App.19a-20a) and Respondents

have abandoned this argument.

14

D. Procedural background

On December 24, 2019, the District Court denied

Respondents’ 12(b)(1) motion to dismiss, concluding

that Plaintiffs satisfied Article III standing. The District Court ruled as follows:

Plaintiffs’ alleged injury is the cost associated

with complying with the TJCA’s transition

tax regulations. Plaintiffs complain that the

regulations have imposed significant burdens

on Plaintiffs and other small businesses,”

including forcing small businesses to spend

enormous amounts of time in futile efforts

just to try and understand what the regulations mean . . . . Notwithstanding Plaintiffs’

straightforward injury and the relaxed

redressability standard, Defendants dispute

causation. They assert that Plaintiffs’ quarrel

is with the TCJA rather than the regulations.

But this argument fundamentally misconstrues Plaintiffs’ claims. Plaintiffs are not

challenging any specific regulation that might

or might not be traceable directly to the

TCJA. Rather, Plaintiffs allege that the

agencies neglected to undertake procedural

measures designed to protect small business

from the burden of unwieldy and cost-intensive regulations. Plaintiffs alleged injuries

are therefore traceable to Defendants’ alleged

violation of these separate statutory requirements, not the TCJA. Causation is easily

satisfied.

[Italics added].

15

On summary judgment, the District Court drastically reversed its position, concluding that Plaintiffs

lacked Article III standing and reiterated this holding

on motion for reconsideration on the grounds that

Petitioner had failed to demonstrate imminence of

actual harm.

Plaintiffs timely appealed the decision to the

United States Court of Appeals District of Columbia

Circuit. Addressing Article III in a few sentences, the

Court of Appeals made several obvious errors, similar

to those committed by the District Court. First, the

Court of Appeals ignored the fact that Petitioner was

an “object of” the statute and Guidance. Second, acknowledging Petitioner’s future compliance costs, the

Court of Appeals, in clear conflict with Lujan, stated

that Petitioner had not explained how those costs are

“traceable to the transition tax regulations—as opposed

to the transition tax statute, other provisions of the

Internal Revenue Code.” Monte Silver & Monte Silver,

Ltd. v. Internal Revenue Serv., 2022 WL 17420308 at

*2 (D.C. Cir. Dec. 6, 2022). (App.4a).

16

REASONS FOR GRANTING THE PETITION

I.

THE DECISIONS BELOW CONFLICT WITH THIS

COURT’S PRECEDENT.

The decisions below ruled that Petitioner failed

to show (1) imminent future injury (App.11a, 46a

and 51a); and (2) that the alleged future injury is

traceable to the challenged regulations. (App.4a).

Both holdings conflict with the Court’s precedents.

A. The Decisions Below Are in Direct

Conflict with This Court’s “Object of”

Article III Standard.

Under Lujan, when the litigant is the “object of”

the government action or inaction, there is little

question as to his Article III standing. Lujan, 540

U.S. at 561.

Petitioner is a CFC and the direct object of the

statute and implementing Guidance. The first sentence

of the statute makes clear that the statute applies to

CFCs. The Guidance, implementing the statute, references CFCs over 2000 times. Respondents conceded

that Petitioner is regulated by the statute and Guidance. The District Court acknowledged this but

forgave Respondents’ concession.

Though Petitioner is clearly the object of the

Guidance, neither the District Court nor the Court of

Appeals paid heed to this basic principle of Article III

standing. Instead, both courts applied the non-“objectof ” standard which imposes a much more rigorous

burden on plaintiffs trying to satisfy standing. Id., at

562 (non-“object of” plaintiffs have a “substantially

17

more difficult” burden to satisfy Article III standing);

see also Summers v. Earth Island Inst., 555 U.S. 488,

493 (2009) (applying more rigid, non-“object of” Article

III standard to plaintiffs).

As an “object of” the Guidance, Petitioner’s future

injury and the injury’s traceability to the Guidance

should have been deemed satisfied.

As an “object of ” the Guidance, Petitioner is clearly

affected by it and therefore sustains injury-in-fact for

purposes of Article III. The record showed that Petitioner incurred past compliance costs and will incur

future costs related to future dividends. Had the courts

below properly applied the “object of” standard to the

injury prong of the Article III (as dictated by Lujan),

Petitioner’s standing would have been self-evident.

Instead, by deviating from Lujan’s instructions,

the District Court required Petitioner to establish imminent injury—i.e., to prove exactly when it would

distribute future dividends—despite the fact that the

sole purpose of Petitioner’s accumulated profits were

to serve the needs of the Silver family. This analysis

is inconsistent with Lujan, which involved non-“object

of” plaintiffs. Lujan, 504 U.S. at 562.

Not only is this ruling at odds with Lujan, but it

conflicts with the purpose of the RFA. In enacting and

amending the RFA, Congress explicitly acknowledged

that small businesses are disproportionately affected

by compliance costs related to burdensome federal

regulations. The RFA, in other words, recognizes that

regulations—especially tax regulations—will cause

small businesses, like Petitioners, injury in the form

of compliance costs. The Court of Appeals failed to

appreciate this fact in its Article III analysis.

18

B. The Decisions Below Are in Direct

Conflict with This Court’s Procedural

Standing Jurisprudence.

i. Under Lujan, the Courts Below

Should Have Traced the Injury to

the RFA.

In procedural injury cases, the Article III standing

requirements are modified. Lujan, 504 U.S. at 57273 & n. 7-8. First, to establish procedural standing,

plaintiffs must show that “the procedures in question

are designed to protect some threatened concrete

interest of his that is the ultimate basis of his standing”.

Id. Additionally, the redressability and imminence13

requirements are relaxed. Id.

The courts below failed to properly apply these

standards to Petitioner’s RFA challenge, both as to

traceability as well as to the relaxed standards of

imminence and redressability.

As for traceability, the Transition Tax was aimed

at huge multinational corporations. The RFA was designed to protect Petitioner’s concrete interests to avoid

double taxation and compliance costs. Had Respondents undertaken the procedures required under § 603

and § 604, rather than issue an unlawful § 605(b)

certification, Respondents could easily have provided

Petitioner (as well as over 200,000 other small businesses) with full or partial relief from the Transition

Tax, and future compliance costs associated with it.

Petitioner, a small business under the RFA, is chal13 Imminency is an element of “injury-in-fact.” Lujan, 504 U.S.

at 560.

19

lenging the 605(b) certification, and this is the basis

for its standing.

Had the courts below properly internalized this,

they would have found that the causal chain is simple

and apparent, as the District Court did in denying

Respondents’ motion to dismiss (App.62a-64a).

Instead, at the urging and invitation of Respondents and echoing the decision of the District Court,

the Court of Appeals focused improperly upon the exact

connection between the challenged tax regulation and

Petitioner’s alleged injury (i.e. compliance costs).

The courts were not properly focusing their

inquiry. The proper focus requires assessing whether

Respondents’ § 605(b) certification was valid.

Applying the correct procedural traceability standard, the analysis is simple and self-evident. The failure of Respondents to perform an RFA analysis under

§§ 603-604, threatened Petitioner’s concrete interest

to avoid double taxation and compliance costs. Had

Respondents taken the RFA seriously and performed

§§ 603-604 analysis, they could have ameliorated

the burdensome effects of the Guidance.14

14 Had Respondents complied with the RFA, they could have

readily remedied (and still can remedy) all or some of Petitioner’s

prospective injuries. For example, Respondents could have and

still can:

(1)

Modify the definitional section of the Guidance to:

(a)

equate the situation of Petitioner to that of

much larger companies under § 965(i). This

will alleviate ALL future compliance costs.

(b)

Equate the status of companies and their

shareholders who took the § 962 election to

20

ii. Under Lujan, the Courts Below

Should Have Applied a Relaxed

Imminency Requirement.

The courts below also misapplied the relaxed

imminency requirement. A “person who has been

accorded a procedural right to protect his concrete

interests can assert that right without meeting all the

normal standards for redressability and immediacy.”

Lujan, 504 U.S. at 573, n. 7 (italics added). The courts

below found that Petitioner failed to prove future injury

because “Plaintiffs [ . . . ] [had said] nothing about

when Silver Limited might issue a dividend to Silver

that would trigger the claimed compliance obligations.”

(App.12a).

By requiring Petitioner to provide detailed corporate plans concerning future dividends, the courts

below completely disregarded Lujan’s relaxed imminency standard for procedural injury cases. The distribution of dividends by a for-profit corporation to its

sole shareholder is certainly no less imminent than a

multi-year plan to construct a federal dam that “will not

be completed for many years,” if at all. Lujan, 504 U.S.

at 572 n. 7. Cf. Massachusetts v. E.P.A., 549 U.S.

that § 965(i) companies. This will alleviate ALL

future compliance costs.

(2)

Create simple compliance manuals related to § 962,

which would reduce the complexity and compliance

costs associated with § 962, each time Petitioner

distributes a dividend in the future. Indeed, such

manuals are required by statute. See Title II, Section

212 (Small Business Regulatory Enforcement Fairness

Act of 1996) of Public L. 104-121 (Contract with

America Advancement Act of 1996), codified as a

Note to 5 U.S.C.A. § 601.

21

497, 521 (2007) (future harm from global warming

satisfies injury-in-fact in procedural rights case). Such

a rigid and narrow analysis is also at odds with the

RFA and shows how the courts below failed to appreciate the basic reality of small businesses. In fact,

since filing this action, Petitioner has already distributed a dividend to Silver and will continue to

make such distributions in the immediate future, per

the needs of the Silver family.

Correctly applying the procedural injury standard

and the “object of” standard, forecloses any question

as to Petitioner’s Article III standing. Intervention is

thus warranted.

II. THE DECISIONS BELOW CONFLICT WITH THE

DECISIONS OF ALL THE OTHER COURTS OF

APPEALS.

A. The Decisions Below Conflict with the

Standards Used by Other Courts of

Appeals Applying the “Object of” Standard.

Virtually all circuits that have been confronted

with a plaintiff who is an “object of” the challenged

government action, have ruled that Article III standing

is satisfied, both in terms of injury-in-fact (including

future injury) and traceability. Properly applying

Lujan’s standard—courts of appeals have consistently

held that “objects of” a challenged regulation satisfy

Article III standing, without engaging in complicated

analyses akin to what the courts below did regarding

Petitioner.

In Contender Farms, L.L.P. v. U.S. Dep’t of Agric.,

779 F.3d 258, 262 (5th Cir. 2015)—a case that was

brought under the RFA—the court found “no reason

22

to depart from the ordinary rule that [plaintiffs], as

objects of the Regulation, may challenge it.”

In Owner-Operator Indep. Drivers Ass’n, Inc. v.

Fed. Motor Carrier Safety Admin., 656 F.3d 580 (7th

Cir. 2011), the Seventh Circuit took an expansive

view of the term “object of.” In this case, the government

sought to increase highway safety by imposing on

trucking companies rules designed to track the hours

that their drivers drove each day. It was the companies,

not the drivers, who were the object of the regulation.

Nonetheless, the Seventh Circuit held that truck

drivers were objects of the action here as it was truck

drivers who were directly affected.

The three truck drivers are the ‘objects of

the action’ here. It is truck drivers who will

be required to install [safety devices] should

they work for a carrier subject to a remedial

directive. Although compliance is measured

at the carrier level, it is the individual truck

drivers whose sleep is really at issue under

the rules and whose status is being tracked

on a day-to-day basis.

Thus, the Seventh Circuit looked beyond the

formal rule and found that the direct effect of the

rule was borne by drivers who therefor satisfied

Article III standing.15

15 For similar rulings of the other circuits, see Arkansas Right

to Life State Pol. Action Comm. v. Butler, 146 F.3d 558, 560 (8th

Cir. 1998) (applying Lujan’s “object of” standard and concluding

that plaintiff satisfied Article III standing); Green v. Bank of

Am., NA, 512 F. App’x 665, 666 (9th Cir. 2013); Rice v. Vill. of

Johnstown, Ohio, 30 F.4th 584, 592 (6th Cir. 2022); Tweed-New

Haven Airport Auth. v. Tong, 930 F.3d 65 (2nd Cir. 2019);

Shalom Pentecostal Church v. Activ Sec’y U.S. Dep’t of

23

The Court of Appeals for the D.C. Circuit has

also correctly applied the “object of” standard as

articulated by the Lujan Court. In State National

Bank of Big Spring v. Lew, 795 F.3d. 48 (D.C. Cir.

2015), then Judge Kavanaugh of the D.C. Circuit

stated, citing Lujan, that “there is ordinarily little

question” that a regulated individual or entity has

standing to challenge an allegedly illegal statute or

rule under which it is regulated [ . . . .] So it is in this

case.” Yet in the present case, the Court of Appeals

departed from this precedent.

The heightened Article III analysis applied by

the lower courts in contravention of Lujan and its

progeny imposes a monumental obstacle to judicial

review mandated by Congress in the SBREFA, thus

frustrating the stated policy of empowering small

businesses to challenge agency circumvention of the

RFA procedures.

Homeland Sec., 783 F.3d 156 (3rd Cir. 2015); Lamar v. Ebert,

No-15-7668 (4th Cir. 2017); New Mexico v. Dept of the Interios,

854 F.3d. 1207 (10th Cir. 2017); Lewis v. Governor, 944 F.3d

1287 (11th Cir. 2019); Aroostook Bank of Micmacs v. Ryan, 404

F.3d 48 (1st Cir. 2005)

24

B. The Decisions Below Conflict with the

Decisions of Other Courts of Appeals

Confronted with Procedural Injury

Cases.

i. The Decision Conflicts with All

Circuits That Have Addressed

Traceability in Procedural Injury

Cases.

The decision of the Court of Appeals is in direct

conflict with all circuits which have addressed

traceability in procedural standing cases.

In WildEarth Guardians v. U.S. Dep’t of Agric.,

795 F.3d 1148, 1154 (9th Cir. 2015), the Ninth Circuit

held that:

to demonstrate standing to bring a procedural

claim a plaintiff must show that the procedures in question are designed to protect

some threatened concrete interest of his

that is the ultimate basis of his standing.

In New Mexico v. Dep’t of the Interior, 854 F.3d

1207 (10th Cir. 2017), the Tenth Circuit held that

standing is satisfied “so long as the procedures in

question are designed to protect some threatened

concrete interest of [the party] that is the ultimate

basis of [its] standing.”16

16 For similar rulings of other circuits, see Cahaba Riverkeeper

v. U.S. Envtl. Prot. Agency, 938 F.3d 1157 (11th Cir. 2019);

Iowa League of Cities v. Envtl. Prot. Agency, 711 F.3d 844 (8th

Cir. 2013); Nkihtaqmikon v. Impson, 503 F.3d 18 (1st Cir. 2007);

Parsons v. U.S. Dep’t of Justice, 801 F.3d 701 (6th Cir. 2015).

25

In our case, the RFA was designed to reduce the

compliance burden that small businesses suffered

from one-size-fits-all regulations. In this specific case,

Petitioner had a concrete personalized interest to have

Respondents conduct RFA analyses under § 603 and

§ 604. By issuing invalid certifications, Respondents

avoided the procedures that were designed to protect

Petitioner. This resulted in concrete injury to Petitioner

in the form of additional compliance costs. As the

District Court ruled in denying Respondents’ motion

to dismiss, “causation is easily established.”

By focusing on the tax regulation—as opposed to

the underling statute serving as the “ultimate basis”

for its standing—the decision of the Court of Appeals

directly conflicts with those of its sister courts around

the country. Had the Court of Appeals applied the

correct traceability standard—as the courts of the

rest of the country do—Petitioner’s Article III standing would have been well established.

ii. The Decision Conflicts with All

Circuits That Have Addressed the

Relaxed Prongs in Procedural

Injury Cases.

Once a plaintiff’s concrete interests have been

threatened by a procedural violation designed to protect it, the redressability and imminency prongs are

relaxed. Lujan, 504 U.S. at 572, n. 7.

The relaxed imminency prong is discussed above

(supra, p.20). As to redressability, not only is it relaxed

under Article III, but the clear working of the RFA

establishes the exclusive remedy and makes it mandatory. “In granting relief [ . . . ] the court shall order

the agency to take corrective action including, but not

26

limited to—remanding the rule to the agency.” 5

U.S.C. § 611(a)(4)(A) [emphasis added]. As to relaxed

redressability, although not addressed by the Court

of Appeals, Petitioner easily satisfies this prong. That

prong is met “when correcting the alleged procedural

violation could change the substantive outcome in

the [plaintiff’s] favor; the [plaintiff] need not go further and show that it would effect such a change.”

Narragansett Indian Tribal Historic Pres. Office v.

Fed. Energy Regul. Comm’n, 949 F.3d 8, 13 (D.C. Cir.

2020). See also Sugar Cane Growers Co-op. of Fla. v.

Veneman, 289 F.3d 89, 94 (D.C. Cir. 2002).17 As discussed above (supra, fn.14), Respondents could have

provided, and can still provide, Petitioner and other

small business with variety forms of relief.

Had Petitioner’s RFA challenge been brought in

a different jurisdiction, its Article III standing under

the RFA would have been—at most—an afterthought.

Litigating Article III standing for four years at the

district and appellate level—generating multiple and

conflicting opinions—is the result of the D.C. Circuit’s

incorrect application of Lujan and its failure to

appreciate the uniqueness and significance the RFA.

This Court’s intervention is warranted to clarify the

parameters of Article III standing for RFA purposes.

17 For similar rulings of other circuits see Klein v. United States

Department of Energy 753 F.3d 576 (6th Cir. 2014); WildEarth

Guardians v. U.S. Dep’t of Agric, 795 F.3d 1148 (9th Cir. 2015);

Gulf Restoration Network v. Salazar, 683 F.3d 158, 167 (5th

Cir. 2012); New Mexico v. Dep’t of the Interior, 854 F.3d 1207

(10th Cir. 2017); South Carolina v. Limehouse, 549 F.3d 324

(4th Cir. 2008); State v. Environmental Protection Agency, 587

F.3d 422 (D.C. Cir. 2009); Iowa League of Cities v. Envtl. Prot.

Agency 711 F.3d 844 (8th Cir. 2013); Nkihtaqmikon v. Impson

503 F.3d 18 (1st Cir. 2007).

27

III. THE QUESTION PRESENTED IS OF CRUCIAL

IMPORTANCE AND WARRANTS REVIEW.

A. The Decision Below, If Allowed to Stand,

Will Frustrate the Congressional Mandate

and Render the RFA a Dead Letter.

After years of congressional debate, the RFA

was amended in 1996 for the explicit purpose of providing small businesses with a private right of action

to seek judicial review of agency action not in conformity

with the RFA. However, the decisions below frustrate

the will of Congress by allowing Respondents to avoid

their RFA obligations. Not only do these decisions

cause small businesses, like Petitioner, inordinate and

unfair delay and cost, but the net result of such

overly stringent standing is that the right of judicial

review created under the SBREFA has been effectively

nullified by judicial fiat, precluding a merits inquiry:

was the Respondents’ RFA § 605(b) certification valid

or not?

The statutory language and congressional history

make clear that this right to judicial review was wide

in scope and specifically covered tax-related regulations.

See Regulatory Flexibility Act Amendments, H.R.

Rept. 104-49 (1995) (“[ . . . ] prohibition on judicial challenges has allowed agencies to ignore the letter and

spirit of the RFA.”). See also Regulatory Flexibility

Improvements Act of 2013, H.R. Rept. 113-288 at 41

(2013) (singling out Respondents for their “intransigent

position [ . . . ] of RFA compliance” and that the bill

“represents the congressional response to the obstinacy

of the IRS.”).

Providing judicial review under the 1996 amendment was

28

the single most important step which can be

taken to force agencies to fully consider the

impact of their rules on small entities. Unless

regulators face the possibility of court challenge to their actions they may not comply

with the RFA. The Committee believes that

real and effective review within these limits

is necessary to accomplish the purposes of

the Regulatory Flexibility Act.

H.R. Rept. 104-49, at 5.

Under the RFA as amended by the SBREFA,

Respondents could no longer simply issue boilerplate

§ 605(b) certifications. Id., at 7 (“Simple boilerplate

statements that the rule will not have such an effect

are patently inadequate under the RFA.”). Sufficient

analysis must be performed to apprise the regulated

community of the reasons for the certification. See

also H.R. Rept. 113-288, at 53 (noting that the

“amendment has not improved agency certifications”

and that agencies should “supply in their certifications,

the same detail that accompanies an environmental

assessment” under NEPA.). Moreover, any doubt as

to whether a RFA analysis should be performed “must

be resolved in favor of performing the analysis.” H.R.

Rept. 104-49, at 7.

Allowing the decisions below to remain will thwart

Congress’ decades-long fight to subject Respondents

to the RFA. Had the courts below properly internalized

the congressional mandate under the RFA, the courts

below would have made an affirmative effort to find

standing, instead of doing anything in their power to

29

find lack of standing.18 Federal courts, have “no more

right to decline the exercise of jurisdiction which is

given, than to usurp that which is not given.” Sprint

Communications, Inc. v. Jacobs, 571 U.S. 69, 77 (2013),

citing Cohens v. Virginia, 6 Wheat. 264, 404 (1821).

“Jurisdiction existing, this Court has cautioned, a

federal court’s “obligation” to hear and decide a case

is “virtually unflagging.” Sprint Communications, Inc.,

571 U.S. at 77, citing Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976).

The implications for not intervening are clear.

See Amicus Curiae of the Center for Taxpayer Rights

in Support of Petitioner. (App.128a-148a). Subjecting a

party claiming the deprivation of an RFA right to a

heightened standard of Article III standing will severely

weaken the RFA or even render it a dead letter, as a

practical matter.

B. The Decisions Below Insulate Respondents from Judicial Review.

This case has significant implications on the

whole of administrative law. Respondents are notorious

for ignoring their obligations under the Administrative

Procedure Act, in general, and the RFA, in particular.

Kristin E. Hickman & Gerald Kerska, Restoring the

Lost Anti-Injunction Act, 103 VA. L. REV. 1683, 17123 (noting that the IRS does “not have a great history

of complying with APA procedures, having claimed

for several decades that their rules and regulations

are exempt from those requirements). Indeed, it is

precisely for this reason that Congress amended the

18 Richard J. Pierce, Jr., Is Standing Law or Politics?, 77 N.C.

L. REV. 1741 (1999).

30

RFA in 1996 and continues similar efforts to the

present time. See, for example, Small Business

Regulatory Flexibility Improvements Act, H.R. 5, 115th

Cong. tit. III (2017).

This case demonstrates how far Respondents

will go to both (i) avoid complying with basic norms

of administrative law, and (ii) ignore the RFA and

small businesses.

However, this Court has made clear that Respondents are not immune from basic administrative

principles. In its two recent cases involving tax

administration and administrative law, this Court, in

unanimous decisions, has narrowly construed statutes

which Respondents used to avoid general rules of

administrative law. CIC Servs., LLC v. Internal

Revenue Serv., 141 S.Ct. 1582 (2021); Direct Mktg.

Ass’n v. Brohl, 575 U.S. 1, 13 (2015).

Allowing the decisions below to stand will result

in an insurmountable Article III obstacle for administrative challenges against tax regulations under

the RFA. Respondents will have every incentive to

continue ignoring basic norms of administrative law,

including those in the RFA, in promulgating overly

burdensome regulations.

C. The Question Presented Is of Exceptional

Importance.

In U.S. v. Sisson, Justice Harlan aptly noted:

clarity is to be desired in any statute, but in

matters of jurisdiction it is especially

important. Otherwise, the courts and the

parties must expend great energy, not on

31

the merits [ . . . ] but simply deciding whether

a court had the power to hear a case.

399 U.S. 267, 307 (1970). See also Thole v. U.S. Bank

N.A, 140 S.Ct. 1615, 1622 (2020) (“Courts sometimes

make standing law more complicated than it needs to

be”). Nowhere is this statement so true as in present

case. Petitioner, a small business, has been litigating

a simple RFA case for four years and is still at the

Article III stage. This is not what Congress had in

mind when it amended the RFA in 1996.

D. This Case Is the Ideal Vehicle to Address

the Question Presented.

For several reasons, this case is the ideal vehicle

to address the narrow question presented. First, the

issues presented are purely legal. The narrow question

is whether, under the facts that are not disputed,

Petitioner has Article III standing under the RFA.

Second, for over 40 years since the RFA was first

enacted, this Court has yet to review the statute in

any manner. This case presents an opportunity to

provide instruction as to the interplay between Article

III and the RFA, thereby assisting the small business

community and the courts in properly applying

irreducible constitutional minima in RFA actions.

Third, as noted throughout this Petition, Respondents’ intentional failure to comply with the RFA

is notorious. Congress’ continued attempt to bring

Respondents into line has yet to prove successful. A

firm ruling from this Court will send a strong message

to Respondents that they must abide by the congressional policy requiring federal agencies to reduce the

regulatory burden on small business by allowing

32

them meaningful participating in the rule-making

process.

Fourth and last, the Article III standing issue is

outcome-determinative in this case. As the District

Court ruled, the Anti-Injunction Act does not bar this

action, which was brought solely for the purpose of

enforcing the RFA. (App.64a-67a). As to the merits,

besides certifications which are invalid on their face,

the administrative record does not contain a single

document that Respondents even considered the RFA.

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CONCLUSION

This Court’s intervention is warranted and a

petition for a writ of certiorari should be granted.

Respectfully submitted,

L. Marc Zell

COUNSEL OF RECORD

ZELL & ASSOCIATES

INTERNATIONAL ADVOCATES, LLC

1345 Ave. of the Americas, 2nd Floor

New York, NY 10105

(212) 971-1349

mzell@fandz.com

Noam Schreiber

Of Counsel

34 Ben Yehuda St.

15th Floor

Jerusalem, Israel 9423001

011-972-2-633-6300

noam.schreiber@fandz.com

Counsel for Petitioner

March 3, 2023