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US Treasury Department The US Treasury Department Building. Photo © Tim Evanson

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Overseas US Citizen Files Lawsuit Against IRS and Treasury
A challenge has been launched against Transition Tax regulations affecting controlled foreign corporations

Published on February 6, 2019

Monte Silver, a small business owner and overseas American, has filed a complaint against the IRS and the United States Treasury Department. The complaint relates to US tax law changes in recent years, and challenges the legality of the recently issued Transition tax regulations as applied to small businesses and their owners. The regulations are having an effect on US Citizens residing overseas who run businesses, as explained by Mr Silver in an article written for The American in July 2018.

Mr Silver, who specializes in US Taxation, explained that the "lawsuit is the culmination of an entire year of grassroots advocacy by small business owners ... Recognizing the tremendous burden which the Transition tax imposed on small businesses, in June 2018 Treasury granted us a one year extension to comply with the law, but avoided granting us permanent relief when issuing the proposed regulations in August 2018 by wrongly certifying that regulations had no impact on small businesses. It was at this stage we realized that a lawsuit would be the only way to enforce our rights."

Stuart Bassin, attorney of record, said that "Small businesses are extremely vulnerable to agency regulation ... Certain Federal laws do provide small business owners with protection from burdensome regulation, however small business owners lack the funds and ability to organize themselves to enforce their rights."

As an American business owner overseas, Mr Silver has been a prominent advocate for action on these regulations and the way regulations affect US Citizens overseas. Mr Silver went on to say, "Given the identical and unlawful manner in which Treasury/IRS has recently issued a wide variety of regulations, I foresee follow-up lawsuits being filed to protect small businesses, starting with the GILTI regulations".

Full details of the complaint can be found on Mr Silver's website, at www.silvercolaw.com/blog/want-to-see-the-lawsuit-that-was-filed

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