Offit Kurman Blogs
Tax
A Missed Tax Court Deadline Is No Longer an Automatic Jurisdictional Death Sentence in the Eighth Circuit
For decades, taxpayers who missed the 90-day deadline to file a Tax Court deficiency petition were often told the same thing: Too late. Case dismissed. The Tax Court has no power to hear you. That answer just changed in the Eighth Circuit. On August 11, 2026, the Eighth Circuit issued a published opinion in Maniktala v. Commissioner, reversing the Tax Court and holding that the 90-day deadline under Internal Revenue Code section 6213(a) is not jurisdictional and may be subject to equitable tolling. I had the privilege of briefing and arguing this appeal on behalf of the taxpayers, making this decision both professionally meaningful and practically important for taxpayers in the Eighth Circuit. The Eighth’s decision may sound procedural. It is. But procedure is often where taxpayer rights either survive or disappear. Why This Matters A notice of deficiency is the IRS’s formal determination that a taxpayer owes additional tax. For most taxpayers, once that notice is mailed, section 6213(a) gives them 90 days to file a petition in the United States Tax Court. Tax Court matters because it allows taxpayers to challenge the IRS before paying the disputed tax. That prepayment forum is often the difference between a taxpayer being able to challenge the IRS at all and being priced out of the fight. Without Tax Court access, a taxpayer may be forced to pay the disputed liability first, pursue an administrative refund claim, and then sue for a refund in federal court if the IRS denies the claim. For many taxpayers, that is not a realistic alternative. The amount at issue may be too large. The process may be too expensive. The taxpayer may never get a meaningful chance to be heard. So, when the Tax Court treats the 90-day deadline as jurisdictional, the consequence is severe. If the petition is late, even by circumstances outside the taxpayer’s control, the court says it has no power to do anything about it. No equitable tolling. No consideration of fairness. No hearing whether the taxpayer acted diligently. Just dismissal. Maniktala changes that rule in the Eighth Circuit. What the Eighth Circuit Held The Eighth Circuit held that section 6213(a)’s 90-day filing deadline is a claims processing rule, not a jurisdictional bar. And this is the important distinction. A jurisdictional rule limits the court’s power. If a deadline is jurisdictional, courts generally cannot forgive a late filing, even for compelling reasons. A claims-processing rule, by contrast, still matters. Deadlines still matter. Taxpayers still need to file on time whenever possible. But a claims-processing deadline may be subject to equitable tolling in appropriate circumstances. In plain English, the court agreed with our position: a late petition does not automatically mean the courthouse doors are locked forever. The Eighth Circuit also held that the deadline is subject to equitable tolling. That does not mean every late petitioner wins. It means taxpayers may have the opportunity to show that they pursued their rights diligently and that extraordinary circumstances prevented timely filing. It is not a free pass to miss the deadline, and it shouldn’t be. But it is a chance to be heard. And in tax procedure, that chance can make all the difference. The Facts Make the Point The Maniktalas filed joint returns claiming research and development credits based on activities of an S corporation. The IRS later issued a notice of deficiency to the shareholders. The notice was mailed on December 20, 2023, and listed March 19, 2024, as the last day to file a Tax Court petition. Our clients, however, did not receive the notice until July 9, 2024. A Tax Court petition was filed on July 19, 2024, after the 90-day period expired. The Tax Court dismissed the case for lack of jurisdiction. On appeal, the Eighth Circuit reversed and remanded so the Tax Court could determine whether equitable tolling is warranted. The Eighth Circuit did not hold that the taxpayers automatically receive tolling. It held that the Tax Court has authority to consider whether they do. That is the point. The Tax Court is no longer required to stop at “late.” It may now ask “why.” The Growing Circuit Split Maniktala is part of a much larger, unsettled national issue. The Eighth Circuit joined the Second, Third, and Sixth Circuits in holding that section 6213(a)’s deficiency petition deadline is not jurisdictional and is subject to equitable tolling. Other circuits have gone the other way or have not yet adopted that view. The Tax Court itself has continued to treat the deadline as jurisdictional in cases not appealable to circuits that have rejected that approach. That means taxpayer rights currently depend, in part, on geography. A taxpayer in one circuit may receive a chance to seek equitable tolling. A similarly situated taxpayer in another circuit may not. That is a hard result to justify when the issue is access to court. As of now, this issue remains active nationally, with circuit law continuing to develop. Unless and until Congress or the Supreme Court resolves the issue nationwide, taxpayers may continue to face different procedural rules depending on where their case is appealable. That is not how access to Tax Court should work. Congress Is Watching Too This is not just happening in the courts. Legislation currently before Congress reflects the same position taxpayers advanced in Maniktala: The Tax Court should have authority to apply equitable tolling in deficiency cases when the facts and circumstances warrant it. The Tax Court Improvement Act would expressly provide that the Tax Court has jurisdiction to toll the section 6213(a) filing period when equity warrants tolling. It would also address the harsh consequences that may follow when a late Tax Court petition is dismissed. That legislative development reflects a broader recognition that procedural deadlines should not become automatic traps that prevent taxpayers from ever challenging the IRS on the merits, particularly when the taxpayer acted diligently, and circumstances beyond the taxpayer’s control caused the late filing. Deadlines matter. But they should not become traps that eliminate judicial review when equity warrants a hearing. What Taxpayers Should Take Away The first takeaway is simple: do not miss the 90-day deadline if at all possible. If you receive a notice of deficiency, act immediately. The deadline is short. Interest may continue to run. Collection consequences may follow. And even in circuits that allow equitable tolling, tolling is not automatic. The second takeaway is just as important: if the deadline has already been missed, the analysis may not be over. Taxpayers should not assume that a late petition automatically ends the fight. Depending on where the case is appealable, and depending on the facts, equitable tolling may be available. The third takeaway is that notices matter. Mail issues matter. Timing matters. Documentation matters. If a taxpayer receives a notice late, never receives it, relies on incorrect information, faces serious circumstances preventing timely filing, or otherwise misses the deadline despite diligence, those facts should be preserved immediately. Equitable tolling is fact intensive. Taxpayers should keep records of everything they do when dealing with the IRS, including notices received, envelopes, mailing dates, calls, correspondence, representative communications, and efforts to act once they learn of a problem. The IRS makes mistakes. Mail gets delayed. Notices are missed. But the burden remains on the taxpayer to show that an extraordinary circumstance, and not simple inattention, caused the missed procedural deadline. The Bottom Line Maniktala gives taxpayers in the Eighth Circuit something they did not clearly have before: the opportunity to ask the Tax Court to consider equitable tolling in deficiency cases. That is not a technicality. It is access to court. And when the IRS says a taxpayer owes more money, access to court is often the difference between having rights on paper and having a real chance to use them.
August 20, 2026
Commercial Litigation
From CARES Act Relief to CARES Act Enforcement: PPP and ERC Risks Are Rising
When Congress passed the CARES Act in March 2020, it did more than inject liquidity into the economy through programs like the Paycheck Protection Program (PPP). It also created a parallel set of compliance obligations that are only now coming into sharper focus. If that sounds familiar, it should. In a prior blog post, I warned about the Employee Retention Credit (ERC) deadline quietly creeping up on businesses. That dynamic, where relief programs created at the same moment begin to generate legal exposure years down the line, is not unique to ERC. PPP is now entering that same phase, but with a more aggressive enforcement backdrop. While ERC issues often surface through a lack of IRS administrative action and taxpayers facing looming deadlines to file an action in court, PPP is increasingly appearing in the form of civil investigations because of looming government deadlines. And the Department of Justice is running out of time. Most PPP-related fraud claims are governed by statutes of limitation that trace back to the earliest loans issued in 2020. As those deadlines approach, DOJ is not winding down its efforts; it is accelerating them. The result is a noticeable shift in how these cases are being pursued. One of the clearest indicators is the surge in Civil Investigative Demands, or CIDs. These are not informal inquiries. A CID allows the government to compel documents, written responses, and sworn testimony, often before a lawsuit is filed. In practice, it is a tool designed for speed, used when the government needs to build a case and preserve claims before time expires. What might have been a slow-moving inquiry a year ago is now being compressed into a much tighter timeline. Investigations are more targeted, more coordinated, and increasingly driven by data: loan size, forgiveness certifications, and application representations are all being evaluated with renewed urgency. But there is another dynamic at play. One that is harder to see and harder to measure. PPP loan data is, by and large, public. That transparency was intended to promote accountability. In practice, it has also created fertile ground for False Claims Act whistleblower activity. There is growing speculation that a meaningful number of PPP investigations are being fueled by qui tam filings: complaints brought by private relators on behalf of the government. The challenge, of course, is that qui tam actions are filed under seal. They are confidential by design. That means a business receiving a CID has no way of knowing whether the investigation stems from internal government analysis, a data-driven flag, or a whistleblower complaint. Nor is there any immediate way to assess the credibility or motivation behind the underlying allegations. In other words, the investigation may already be several steps along before the target even knows it exists. For businesses and their counsel, that uncertainty adds another layer of complexity. You are not just responding to the government, you are potentially responding to an unseen relator, with unknown information and unknown incentives, whose allegations have already cleared at least an initial threshold of scrutiny. That reality reinforces the broader point: We are at an inflection point where CARES Act relief is transitioning into CARES Act enforcement. ERC deadlines are closing in. PPP statutes of limitation are approaching. And the government is actively working, possibly with the assistance of private whistleblowers, to ensure that it does not leave potential claims on the table. So it is important to understand what it means if your company is caught in the crosshairs of scrutiny. A CID is not something to set aside or address casually. It is the start of a serious engagement with the government, and the response strategy needs to reflect that reality. Early assessment of exposure, careful control of the narrative, and thoughtful engagement can often make the difference between a manageable resolution and a much more costly outcome. At the same time, it is worth remembering that not every PPP case fits the narrative of fraud. Many businesses were navigating unprecedented uncertainty in real time, making decisions based on guidance that evolved rapidly. Certifications made in 2020 are now being revisited with the benefit of hindsight, and sometimes with a level of scrutiny that overlooks the context in which those decisions were made. That nuance matters. And it is often where experienced counsel can add the most value. The broader takeaway is this: the same legislation that created opportunity in 2020 is now creating exposure in 2025 and beyond. ERC and PPP may follow different enforcement paths, but they share a common origin, and increasingly, a common sense of urgency. Add in the reality of sealed qui tam filings and public data-driven scrutiny, and the enforcement landscape becomes even more complex. In fact, that urgency just got a small, but notable, twist. As of April 27, 2026, the IRS introduced a new option for taxpayers whose ERC claims have been disallowed: the ability to request additional time to pursue administrative review by effectively tolling the clock before heading to court. In theory, this gives businesses a bit of breathing room when deadlines are tightening and pressure is building. In practice, however, it’s a brand-new procedural tool with very little track record, limited eligibility, and plenty of unanswered questions about how often it will be granted or how smoothly it will function. In other words, just as the enforcement environment is accelerating, the IRS has added a potential off-ramp, but whether it’s a reliable one or just another layer of complexity remains to be seen. The government is watching the clock. You should be too. If you are seeing an uptick in PPP-related inquiries or CIDs, or dealing with ERC issues as those deadlines approach, you are not alone. These matters are becoming more common, more compressed, and more consequential. It may be time to call in counsel. Because when the clock is running out, or the government is knocking at your door, the difference between exposure and resolution is strategy.
May 6, 2026
Commercial Litigation
Developments in IEEPA Refund Process: CAPE Portal Now Live
This is an update to our previously published article, "Developments in IEEPA Refund Litigation" posted April 15, 2026. U.S. Customs and Border Protection (“CBP”) has taken a significant step forward in implementing a formal refund process for duties imposed under the International Emergency Economic Powers Act (“IEEPA”). With the launch of Phase 1 of the Consolidated Administration and Processing of Entries (“CAPE”) portal within ACE, importers now have an operational mechanism to begin submitting refund claims. While this development signals meaningful progress, eligibility is currently limited, and importers must continue to take proactive steps to preserve their rights. CBP Update: CAPE portal Now Open (Phase 1) At present, CAPE filings are limited to: Unliquidated entries Entries within 80 days of liquidation Entries outside of this scope will be rejected under current validation rules, and CBP has not yet provided guidance on when additional categories of entries will become eligible under future phases. The CAPE system allows for: Submission of multiple entry numbers in a single claim Automated validation of entry eligibility Batch processing of refund claims (currently up to 10,000 entries per form) Based on initial use, the system is generally intuitive and efficient when claims are properly vetted. While some minor system delays have been observed, likely due to high user volume, the submission process itself has proven to be relatively seamless. CIT Update: Continued Importance of Protest Rights As discussed in our prior update, the Court of International Trade (“CIT”) has emphasized the continued importance of administrative remedies. Specifically: CBP has been directed to address:Unliquidated entries; and Entries not yet final The CIT has highlighted that importers “should be aware” of protest rights under 19 U.S.C. § 1514 This remains a critical point. While CAPE provides a new refund pathway, it does not eliminate the need to file protests where applicable. Entries outside the CAPE eligibility window, particularly those more than 80 days post-liquidation, must still be addressed through traditional protest procedures. However, it was made clear that any entry that currently has a pending protest is NOT available to submit a declaration through CAPE, which seems to create hesitation with filing protective protests. Either way, importers and their representatives need to be assessing the risk and planning of action. Inaction could prove costly. Key Takeaways for Importers Categorize Entries Immediately Importers should identify and classify entries into: Unliquidated entries (currently CAPE eligible) Entries ≤ 80 days post-liquidation (currently CAPE eligible) Entries within 180-day protest window (protective protest eligible) Entries beyond 180 days (potential risk, but addressed by CIT order) CAPE Eligibility is Limited Phase 1 is restricted, and CBP has not yet announced timing for broader “Phase 2” eligibility. Importers should not delay action in anticipation of expanded access. Protests Remain a Safeguard The CIT has not resolved whether refunds will be available for entries that are final and beyond the protest period. Filing a protest remains a prudent “belt and suspenders” approach where timing permits. Prepare Claims Carefully Before Submission to Avoid Validation Errors CAPE validations are strict. Entries will be rejected if they: Fall outside eligibility windows Do not contain qualifying IEEPA HTS provisions Are not properly associated with the importer account Looking Ahead CBP’s CAPE portal represents a meaningful advancement in processing IEEPA refund claims, but the current framework remains incomplete. Importers should prioritize: Immediate identification of affected entries Submission of CAPE claims for eligible entries Preservation of protest rights where applicable At this time, there is no indication when additional CAPE filing phases will be implemented, and uncertainty remains for entries outside the current eligibility parameters.
April 21, 2026
Commercial Litigation
Developments in IEEPA Refund Litigation
Through multiple court filings, the U.S. Customs and Border Protection (CBP) and the U.S. Court of International Trade (CIT) have identified significant updates affecting importers seeking refunds of additional ad valorem duties imposed under the International Emergency Economic Powers Act (IEEPA). These developments signal meaningful progress toward a structured refund process, while also highlighting critical compliance steps importers must take now to preserve potential recovery. CBP Update: CAPE Refund Functionality Progress CBP continues to develop a new refund-processing capability within the Automated Commercial Environment (ACE) collections framework, officially named the Consolidated Administration and Processing of Entries (CAPE). This system is designed to automate and streamline the administration of IEEPA-related duty refunds. As of March 19, 2026, CBP reported the following progress: Claim portal: 73% complete Mass processing: 45% completeOngoing development includes ACE validations and event history tracking Review and liquidation/reliquidation: 80% complete Refund processing: 63% complete Once implemented, CAPE is expected to significantly improve efficiency, with CBP estimating a reduction of over 4 million labor hours compared to manual processing. The system is intended to facilitate more timely and accurate refunds for importers. CIT Update: Continued Stay and Guidance on Entry Status On March 20, 2026, the CIT issued an order continuing its prior stay (initially imposed March 4, 2026) and provided further clarification regarding treatment of entries. CBP is directed to reliquidate: Unliquidated entries; and Entries liquidated but not yet final (i.e., within 90 days of liquidation) For entries approaching or within the 180-day protest window:The CIT emphasized that importers "should be aware" of available protest remedies (under 19 U.S.C. § 1514(a)) Scope Expansion:The court amended its prior orders to encompass all IEEPA duties imposed, including those on imports from Brazil and India Notably, the CIT did not resolve whether refunds will be available for entries that are already liquidated and beyond the 180-day protest deadline, where a protest was not filed. It is important to note that the implication before this order indicated that liquidation dates were no longer relevant, however the court’s specific reference to 19 U.S.C. § 1514(a) seems to signal that failure to file a protest COULD result in forfeiting your claim. Therefore, get documents early, and file the protest if you are within the 180-day window to avoid uncertainty. Ultimately, it is a “belt and suspenders” remedy that is worth the extra time. Key Takeaways for Importers Categorize Entries Immediately The availability of refunds may depend on the liquidation status of entries. Importers should promptly identify and classify entries into the following categories: Unliquidated entries Entries liquidated within the 180-day protest period Entries liquidated beyond 180 days:With a filed protest Without a properly filed protest Current law generally provides: CBP may reliquidate within 90 days of liquidation Importers may file protests within 180 days After 180 days, liquidation is typically considered “final and conclusive” Accordingly, entries beyond the protest period may face significant barriers to recovery. Prepare for CAPE by Confirming Electronic Refund Capabilities on the ACE Portal CBP’s Interim Final Rule on Electronic Refunds (effective February 6, 2026) requires that all refunds be issued electronically. Despite approximately 330,000+ importers having paid IEEPA duties or deposits, only about 21,400 entities had completed electronic refund setup as of early March. CBP has already been unable to process 7,700 refunds for nearly 2,900 importers due to incomplete or improper setup. Important to Note Refund claims will be rejected if the importer has not enabled electronic refund capability in ACE. Importers should immediately confirm: ACE portal access Banking and payment configurations Coordination with customs brokers, where applicable Access the Electronic Refund Enrollment in CBP's ACE Portal here. Looking Ahead CBP’s CAPE system represents a major step toward modernizing the refund process for IEEPA duties, but key legal and procedural uncertainties remain, particularly regarding entries that may already be final under U.S. customs law. In the near term, importers should prioritize entry review and classification, preservation of protest rights where applicable, and completion of ACE electronic refund setup.
April 15, 2026
Tax
ERC Refund Claims Are Running Out of Time: Why Waiting on the IRS Could Cost Businesses Their Credit
The Employee Retention Credit may be closed to new filings, but the controversy surrounding unpaid and disallowed claims is very much alive. For many businesses, the real risk in 2026 is no longer just whether the IRS will eventually act. The real danger is that waiting too long may eliminate a taxpayer’s ability to force action and recover the refund at all. That risk is becoming acute. The IRS’s own ERC disallowance guidance states that once a Letter 105C is issued, the taxpayer generally has two years from the date of that letter to file suit. Requesting an administrative appeal does not extend that deadline. In other words, a protest can sit comfortably in the IRS administrative queue while the clock on your right to sue keeps ticking away. This is not a theoretical concern. In its Annual Report to Congress, the National Taxpayer Advocate warned that the IRS issued roughly 28,000 ERC disallowance notices during the summer of 2024. By the time the report was published, many of those taxpayers had fewer than six months remaining on the two-year period to file suit. That should get the attention of any business with an unresolved ERC dispute. The practical message is straightforward. A taxpayer cannot assume that “waiting on appeals” preserves the claim. It does not. Nor can a taxpayer assume that the IRS will affirmatively safeguard the deadline. And while TAS has reportedly set up a universal email address where taxpayers and practitioners can send Form 907s that need immediate attention, there is no clear definition of what “immediate” means or how submissions with be prioritized. That is if you can get one signed. Practitioners have widely reported that the IRS has a directive to deny any requests for extensions. For businesses stuck in the administrative process or waiting out IRS inaction, that is not encouraging news. Just as troubling is the disconnect between official reporting and what many practitioners are seeing on the ground. The Government Accountability Office (“GAO”) reported in February 2026 that the IRS told GAO it had closed all ERC claims, except for the 41,000 still in examination or appeal. BUT the IRS did not provide documentation for that figure, did not define what it meant by a “closed” claim, and had not publicly updated ERC processing status since October 2024. That lack of transparency matters. A claim that the IRS internally considers “closed” may not feel closed at all to the business that has received no payment, no final resolution, no meaningful movement in the administrative process, and no clear explanation of what happens next. And practitioners, who have direct knowledge about how many ERC claims remain unresolved or pending for their clients, are scratching their heads at the IRS’s numbers. When the government’s statistics and the real-world experience of taxpayers diverge this sharply, the problem usually isn’t arithmetic. It’s visibility. The disconnect could be driven by resource constraints. The IRS is attempting to manage complex amended return inventories, controversy matters, and operational changes at the same time its workforce has shrunk significantly. According to the National Taxpayer Advocate’s 2026 report, the IRS workforce fell from 102,113 to 75,702 over the prior year, with major reductions in taxpayer services, small business and self-employed functions, and information technology. A workforce reduction of that magnitude inevitably affects how quickly and effectively disputes are resolved. All of this to say: businesses should not treat delay as harmless. Put differently, this is not an environment in which a company should confidently assume its case will be resolved through the ordinary administrative process before a limitations problem arises. When the statute of limitations is involved, time does not merely fly, it sprints. For businesses with ERC claims, 2026 should be treated as a decision year, not a waiting year. If your claim has been denied, you should determine the date on the denial letter and calculate the two-year suit deadline now. Many businesses will find that deadline is coming this July. If your protest is pending, you should evaluate immediately whether the statute is still running and whether action is necessary to preserve your rights. If your claim remains unresolved after prolonged inaction by the IRS, you should assess whether court action is appropriate rather than assuming the administrative process will eventually resolve itself. Businesses that filed ERC claims in good faith should not lose their recovery rights because the IRS process is slow, opaque, and under-resourced. They should not lose a legitimate tax credit simply because a handful of aggressive promoters created skepticism around the program. Yet that is precisely the position many taxpayers now face. One of the important nuances of filing for a refund is that it takes it out of the hands of the Office of Chief Counsel (IRS in-house attorneys) and thrusts it into the arms of the DOJ. At a time when the DOJ has defunded its tax division and spread its specialized attorneys amongst its various criminal and civil litigation divisions, perhaps an abundance of filings creating pressure will cause the DOJ to push the IRS into action and resolution. Who knows. But there’s only one way to find out. Either way, the window to act is narrowing, particularly for taxpayers who received ERC disallowance letters in the summer of 2024 and assumed their protest would preserve the claim. It may not. If your company has an unpaid ERC claim, a pending protest, or a disallowance letter that has been sitting for months, now is the time to review the file, confirm the applicable deadlines, and determine whether litigation or other protective action is necessary. You still have options today, but that may not be true for long. Waiting for the IRS to move first may be the very thing that costs you the chance to recover.
March 16, 2026
Tax
Tariff Litigation & Section 122 Tariffs
On February 20, 2026 the U.S. Supreme Court issued a landmark decision in Learning Resources, Inc. v. Trump holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. The decision invalidates the reciprocal tariffs and trafficking/immigration tariffs imposed in 2025 under IEEPA and confirms that the power to impose tariffs lies with Congress. The Court did not prescribe a refund mechanism; that responsibility now falls to the U.S. Court of International Trade (CIT) and U.S. Customs and Border Protection (CBP). Within hours of the decision, the Administration imposed a new 10% tariff under Section 122 of the Trade Act of 1974 (now 15%), effective February 24, 2026, and limited to 150 days (absent congressional action). This creates two immediate opportunities: Refund claims for prior IEEPA tariffs (available to domestic and foreign companies) Advisory and planning work related to new Section 122 tariffs and potential replacement regimes (Section 232/301) What Changed: 1. IEEPA Tariffs Invalidated The Supreme Court ruled that IEEPA does not authorize tariff imposition. IEEPA tariffs imposed in 2025 are unlawful ab initio. Refunds are not automatic. Importers must act. 2. Section 122 Tariffs Now in Effect 15% tariff on most imports entered on or after February 24, 2026 Limited to 150 days (approx. expires July 24, 2026 unless extended) USMCA-qualified goods excluded “Goods on the water” exception for certain shipments loaded before Feb 24 and entered before Feb 28 This is a temporary bridge. Section 232 (tariff imposed for national security) and 301 (tariffs imposed on foreign products to counter unfair trade practices) actions may follow. Who May Have a Refund Claim: Those who: Imported goods between February 2025 and February 24, 2026 Paid additional IEEPA ad valorem duties Are the importer of record Have entries that are unliquidated or recently liquidated Did not yet file a protective Court of International Trade (CIT) action Refund claims are available to domestic and foreign companies – the controlling factor: who is the Importer of Record on the customs entry Important: Only IEEPA duties are refundable — not Section 232 or 301duties. Downstream buyers may have contract-based reimbursement claims. Areas Where Offit Kurman Can Assist You: 1. Tax Litigation / Customs Litigation Refund analysis and quantification Protest filings Protective CIT litigation Federal Circuit appeals Strategic coordination of administrative and judicial remedies 2. Transactional Tax Tariff deductibility analysis Accounting method considerations Timing of refund recognition Contingent asset treatment Structuring to mitigate future tariff exposure 3. Corporate & Business Structuring Restructuring importer-of-record status Creating new import entities Evaluating transfer pricing implications Risk allocation between affiliates Supply chain realignment 4. Commercial Contracts Review of tariff pass-through clauses Reimbursement rights for downstream buyers Force majeure and change-in-law provisions Supplier renegotiation strategy Indemnification enforcement 5. Commercial Litigation Claims between buyers and suppliers over tariff allocation Breach of contract actions Indemnity disputes Class or coordinated actions among distributors 6. Restructuring & Insolvency Tariff-driven liquidity pressure Claims valuation in bankruptcy Recovery of tariff refunds as estate assets Documents You Should Be Gathering: Entry summaries (CF 7501) Duty payment records Liquidation dates PSC filings Contracts allocating tariff responsibility ACE and ACH refund account status SKU lists affected by Section 122 Bottom Line: IEEPA refunds are potentially significant. Deadlines are running. Section 122 tariffs create immediate planning needs. If you import goods, manufacture overseas, distribute foreign products, or rely on cross-border supply chains, connect with Offit Kurman for consultation.
March 2, 2026
Commercial Litigation
When the Chicken Does Come Before the Egg: The Taxpayer-Friendly Takeaways from George v. Commissioner, Plus a Few ‘Egg-cellent’ Judicial Puns
Some tax court opinions are dry. Others are dense. And then there are the rare decisions where the court clearly enjoyed the assignment. George v. Commissioner, T.C. Memo. 2026-10 falls squarely in the third category. From its opening pages, the court signals both the seriousness of the R&D credit issues at stake and its willingness to have a little fun along the way. As Judge Greaves famously framed the dispute: “Forget the proverbial chicken or the egg; today we are called to answer which came first, the research or the research credit?” Clever turn of phrase aside, the opinion delivers something far more important for taxpayers, particularly those in agriculture and other operationally complex industries: a roadmap for how real-world innovation can qualify for the R&D credit when done correctly. The Big Win: The Court Acknowledged That Agriculture Innovates. Full Stop. Before we get to the substance, it’s worth pausing on tone. Over the course of 80+ pages, the court peppers the opinion with references to “ruling the roost,” “sunny-side up,” and other poultry-themed flourishes. That levity is notable because it accompanies a very serious acknowledgment: modern agriculture is technologically sophisticated. The opinion’s humor is not accidental. By leaning into chicken metaphors, the court subtly reinforces its understanding of the industry it is judging. From a litigation perspective, that tone is telling. Courts don’t joke about industries they don’t take seriously. The takeaway? The court was engaged, informed, and analytical, not dismissive. That is good news for future taxpayers who bring better-structured R&D claims to the table. This is reinforced by the court repeatedly recognizing that poultry production involves: Complex biological systems Evolving disease pressures Feed chemistry and nutrient optimization Genetic performance tradeoffs Data-driven decision-making at massive scale Indeed, the court emphasizes that even “small changes having dramatic impacts on profitability” are central to the industry, noting that producers may earn “approximately one penny of profit per pound.” That framing matters. The court did not dismiss these activities as routine farming. Instead, it treated them as legitimate candidates for R&D analysis, rejecting the outdated notion that innovation only happens in laboratories. What the Taxpayer Got Right (and the Court Agreed) Despite ultimately limiting the credits claimed, the court credited the taxpayer with confronting real technological uncertainty, a foundational requirement under §41. The opinion details extensive efforts to address: Disease outbreaks with no clear industry solution Antibiotic-free production pressures Feed efficiency and nutrient absorption challenges Vaccine administration methods and dosage questions Genetic line performance under different conditions The court acknowledged that these efforts involved trial-and-error, failed approaches, and iterative refinement, classic hallmarks of experimentation. In fact, the court goes as far as rejecting the IRS’s argument that data collected by George was “routine” and thus excluded from consideration. Instead, the court rejected the ‘routine’ argument the IRS has been fighting hard to revive. Likewise, the court rejected IRS attempts to repurpose the adaptation exclusion, definitively stating that an improved business component is a different business component. That distinction leaves the door wide open for taxpayers who document their experimentation contemporaneously and intentionally, even when data used for testing is collected during standard production. Practical Lessons the Court Practically Hands to Taxpayers If you read the opinion with an eye toward future claims, the lessons are unmistakable: When possible, articulate uncertainty before acting. This helps avoid the IRS assertion that a company reverse-engineered the research narrative. Design experiments with intent, though they don’t have to look like laboratory work. Document while the feathers are flying. Production data is helpful, but technical reasoning is essential. Separate experimentation from execution. Rolling out a solution is not the same as proving it works. Assume IRS scrutiny and prepare accordingly. The IRS will ask whether the “research” existed before the credit study. Courts will too. These lessons don’t clip the wings of the R&D credit. They strengthen it. The Broader Takeaway: Courts Want Better R&D Claims, Not Fewer For all the poultry puns, George v. Commissioner delivers a serious, taxpayer-friendly message: Section 41 remains viable for real-world businesses that innovate intentionally and document rigorously. The court did not narrow the statute. It did not exclude agriculture. And it did not demand laboratory conditions. It simply required that the research come first—and the credit follow honestly. Final Thought If nothing else, George proves that even an R&D case about chickens can be meaty. Matthew Reddington served as counsel in this matter and played a primary role in securing the favorable outcome for the taxpayers.
February 12, 2026
