Watched Case on Taxpayer Access to Courts Won’t Be Reheard (1)

The U.S. Court of Appeals for the Sixth Circuit won’t review the dismissal of a lawsuit against IRS efforts to combat micro-captive transactions, in a case raising major questions about when tax rules can be challenged in court.

The case, which could reach the Supreme Court, concerned a Knoxville, Tenn., firm’s argument that the Internal Revenue Service violated the Administrative Procedure Act by requiring taxpayers to pay a tax before suing to seek a refund on micro-captive transactions. These are transactions where a taxpayer or someone related to them treats a company as a captive insurance company—which typically offers risk-reducing ...