Lissack II and Future Energy Tax Controversy – Is Chevron Really Dead?

Tax attorneys Amish Shah, James Dawson, Brad Seltzer and Leif Anderson co-authored an article for Tax Notes analyzing a recent federal appellate court decision regarding U.S. Department of the Treasury whistleblower rewards and its potential implications for energy tax controversy matters. The Lissack case before the U.S. Court of Appeals for the District of Columbia Circuit arose after the Treasury Department determined it was not statutorily required to issue a monetary award to an individual who submitted information alleging a development group had underpaid its taxes because the department had acted on findings unrelated to the issue addressed in his filing. The U.S. Supreme Court remanded the case to the D.C. Circuit after its Loper Bright decision overturning Chevron deference, and the lower court affirmed its initial ruling. According to the authors, this reaffirmance, known as Lissack II, shows that despite Loper Bright, some courts will continue to defer to the department's interpretation of the Tax Code when evaluating challenged regulations. They then pivot to exploring some of the Treasury Department's regulations on Inflation Reduction Act (IRA) tax credits and post-Loper Bright questions they pose. Their analysis covers the clean hydrogen production credit under Section 45V of the Internal Revenue Code, anti-chaining regulations for Sections 6417 and 6418, and special enforcement rules for direct-pay elections under Section 6417.

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