Tuesday, August 30, 2005
Kudos to Gregg D. Polsky (Minnesota), whose article on the validity of the check-the-box regulations (Can Treasury Overrule the Supreme Court?, 84 B.U. L.Rev. 185 (2004)) was the focal point in a recent district court case.
We previously blogged (here and here) the U.S. District Court for the Western District of Kentucky's decision upholding the validity of the check-the-box regs (§ 301.7701-1 through 3). Littriello v. United States, No. 3:04CV-143-H (W.D. KY, May 18, 2005).
The taxpayer subsequently moved to reconsider the court's opinion on the ground that "the check-the-box regulations are invalid under Morrissey v. Commissioner, 296 U.S. 344 (1935), as argued in a Law Review article by Professor Gregg D. Polsky of the University of Minnesota Law School. Polsky, “Can Treasury Overrule the Supreme Court?”, 84 BU.L.Rev. 185 (2004)."
The district court, in a recent order (No. 3:04CV-143-H (W.D. KY, Aug. 3, 2005)) denied the taxpayer's motion:
When confronted with the question posed by Professor Polsky’s title, one would naturally answer, “No.” However, that is not precisely the question before this Court nor can it be fairly said that Treasury’s check-the-box regulations have such an effect. The Court has reviewed Morrissey in its proper context and does not find that it requires invalidating the checkthe- box regulations.
Certainly, the check-the-box regulations are the subject of academic and theoretical questioning. Professor Polsky has proposed that the Treasury has gone too far in adoptingregulations concerning corporations and other associations. However, it is a theory only that the check-the-box regulations violate the Internal Revenue Code definitions because those definitions were made in effect permanent by Morrissey. The Court does not believe that Morrissey forever incorporated in all future Treasury regulations a particular definition of an “association.” In support of this conclusion, the Court would adopt the discussion contained in the response of the United States.