Top Federal Tax Cases to Watch in 2025
Tax attorneys Christopher Rizek and James Dawson were cited in a Law360 article highlighting the top federal tax cases on practitioners' radar for 2025. From a suit challenging the IRS' use of the economic substance doctrine to the continuing aftermath of the overturning of the Chevron doctrine, the new year brings major decisions on the horizon.
Mr. Rizek deemed the June 2024 U.S. Supreme Court ruling in Loper Bright Enterprises v. Raimondo striking down Chevron deference an "earth-shattering" development in the tax controversy world, as the decades-old doctrine afforded the IRS significant leeway in regulatory enforcement. Already, suits have emerged challenging previous court decisions siding with the agency.
Both attorneys also shared insights on complaints regarding the employee retention tax credit, which was created to provide financial assistance to businesses during the pandemic by enabling them to receive a certain amount of money for every employee they kept on payroll during 2020 and 2021. In 2023, the IRS issued a moratorium on processing new refund claims to deal with the increasing number of fraudulent filings, leaving companies wondering whether they will receive the credits at all. Mr. Dawson explained that "there is a level of frustration you can sense in the complaint[s]" as lawsuits pile up accusing the IRS of poor administration and violations of the Administrative Procedure Act and taxpayer due process rights. Mr. Rizek added that controversy over the incentives will likely be a "prolonged dogfight."