Monte Silver: Treasury Provides 200,000 Small Business Owners Relief in Final Regulations Issued Under the Tax Cut & Jobs Act

WASHINGTON, July 14, 2020 /PRNewswire/ -- Treasury published its much-anticipated final regulation relating to GILTI, one of the two new international tax regimes created as part of the TCJA. To the pleasure of 200,000 small business owners, the final regulations provided them with several forms of permanent regulatory relief.

The goal of GILTI was to prevent corporations like Google and Apple from avoiding US taxation by abusively shifting profits from the US to low tax countries like Cayman Islands.

Unfortunately, GILTI caught many smaller businesses in the same net. "Not only did GILTI impose significant annual compliance costs on us, but in most cases we ended up paying the tax at rates higher than the corporate Goliaths," said Monte Silver, a U.S. tax attorney and small business owner who established and heads the advocacy effort to obtain complete exemption from GILTI.

"Small businesses are generally invisible to Treasury and the regulatory process, and this advocacy win is the direct result of the smaller business owners standing up and telling Treasury – NO MORE!"  Recognizing the tremendous burden which GILTI imposed on smaller businesses, Treasury issued proposed regulations that addressed certain aspects of the problem, yet went ever further in the final regulation," Silver explains. "The final regulation goes a long way towards complete exemption from GILTI, which is our ultimate goal," he added.

The regulatory relief was achieved through non-adversarial advocacy "The Internet and effective e-advocacy have changed the rules of the game," Silver says. "Businesses can effectively unite and get agency decision makers to hear them loud and clear. Expensive lobbyists are no longer necessary to get results."

And seeking complete relief from GILTI for small businesses, Silver filed a lawsuit against Treasury for issuing the GILTI regulations in violation of the little-known Federal Regulatory Flexibility Act ("RFA"). 

The RFA obligates federal agencies to undertake and make public detailed analysis relating to the impact which regulations have on smaller businesses. To reduce the impact, agencies must justify why they have not exempted smaller businesses from the underlying law and regulation.  And the RFA provides smaller businesses with effective judicial relief to enforce it. "The RFA provides smaller businesses and their associations significant leverage in dealing with all federal agencies, in both negotiations and litigation," says Silver. "And as I explained a year and a half ago, once smaller businesses see that success is possible, many more will follow down this path."

If your business is impacted by recently published proposed or final regulations of any federal agency, or for media enquiries please contact:

Monte Silver
[email protected]

SOURCE Monte Silver