Case Information
*1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA STARR INTERNATIONAL COMPANY,
INC.,
Plaintiff,
v. Case No. 14-cv-01593 (CRC) UNITED STATES OF AMERICA,
Defendant. UNITED STATES OF AMERICA,
Counterclaim-Plaintiff,
v.
STARR INTERNATIONAL COMPANY,
INC.,
Counterclaim-Defendant. MEMORANDUM OPINION
Foreign corporations owe U.S. federal income tax on dividend income received from sources within the United States. If that income is insufficiently connected to a foreign corporation’s business activity in the United States, by statute it is taxed at a rate of 30%. 26 U.S.C. § 881(a). The United States maintains tax treaties with many countries, including Switzerland, which reduce this 30% statutory rate for foreign corporations that satisfy certain requirements set forth in the treaty. Our tax treaty with Switzerland also gives the Secretary of the Treasury or his designee discretion to grant Swiss companies benefits under the treaty even if they fail to meet the enumerated criteria. The central question presently before the Court is whether the Secretary’s denial of discretionary treaty benefits in the form of a lower dividend tax rate is subject to judicial review.
Swiss-domiciled Starr International Company (“Starr”) was once the largest shareholder of American International Group, Inc. (“AIG”). In 2007, Starr petitioned the Internal Revenue Service (“IRS”) for discretionary benefits under the U.S.-Swiss tax treaty. After its request was denied, Starr filed this tax-refund suit to recover some $38 million that AIG had paid to the Treasury on its behalf in 2007—or, approximately half of Starr’s withholdings on AIG dividends for that year. The Government has moved to dismiss the suit, asserting that the IRS’s decision to deny Starr treaty benefits is not judicially reviewable because it is committed exclusively to the agency’s discretion by the treaty and involves a nonjusticiable political question. The Government also asserts defenses based on the same grounds. Starr opposes the Government’s motion to dismiss and moves to strike its defenses.
The Court finds that the Government has not met its burden to present clear and convincing evidence to overcome the presumption of judicial review of federal agency action. Because the treaty does not reflect an unambiguous intent to foreclose judicial review, and the Technical Explanation of the treaty—which the IRS followed here—supplies a meaningful standard for determining whether a Swiss company qualifies for treaty benefits, the Court may review whether the Secretary abused his discretion in not extending those benefits to Starr. The Court will, accordingly, deny the United States’ motion to dismiss and grant Starr’s motion to strike the Government’s justiciability defenses.
I. Background
This dispute traces its roots to the heralded falling out between AIG and its then-CEO, Maurice R. Greenberg. See, e.g., Gretchen Morgenson, Chief Is Leaving Insurance Giant; Inquiries Mount, N.Y. Times (Mar. 15, 2005), http://www.nytimes.com/2005/03/15/business/chief-is- leaving-insurance-giant-inquiries-mount.html. Starr and AIG both originated from the restructuring of American Asiatic Underwriters, a multinational insurance company formed in 1919 by Cornelius *3 Vander Starr. Compl. ¶¶ 10–14. [1] In the 1970s, Starr transferred its insurance business to AIG and became the largest holder of AIG common shares. Id. ¶ 17. At that time, Greenberg was the chairman of both companies’ boards of directors and the CEO of AIG. Id. ¶ 16. For the next several decades, Starr used its massive holding of AIG common stock to fund discretionary compensation plans for AIG executives. Id. ¶ 28. Starr also received dividends on those shares, which were, and continue to be, subject to a 30% federal withholding tax. Id. ¶ 18.
In 2004, Starr moved its headquarters from Bermuda to Ireland and began to take advantage of the 1997 U.S.-Ireland tax treaty, which automatically reduced Starr’s withholding rate on AIG dividends by half. Id. ¶¶ 20–25. No similar treaty benefit existed for companies headquartered in Bermuda. Am. Answer & Countercl. (“Counterclaim”) ¶ 14. The next year, amidst an investigation by New York’s Attorney General, Greenberg stepped down as CEO of AIG, and Starr ceased funding AIG’s executive-compensation plan. Compl. ¶¶ 26–29. Starr would have continued to receive benefits under the U.S.-Ireland tax treaty had it not then relocated its headquarters to Switzerland, allegedly to protect its assets from an AIG lawsuit claiming that Starr was contractually obligated to fund the plan. Id. ¶ 31–33; see also Starr Int’l Co., v. AIG, 648 F. Supp. 2d 546 (S.D.N.Y. 2009).
Under the Convention Between the United States of America and the Swiss Confederation for the Avoidance of Double Taxation with Respect to Taxes on Income, Oct. 2, 1996, S. Treaty Doc. No. 105-8 (1998) [hereinafter “the Convention” or “the treaty”], a Swiss company receiving dividends from a U.S. company is automatically entitled to halve its withholdings under certain enumerated circumstances, as when the Swiss company does significant business in Switzerland or *4 is listed on a recognized stock exchange. Id. arts. X, XXII. If a company is not automatically entitled to benefits under the treaty, it “may, nevertheless, be granted the benefits of the Convention if the competent authority of the State in which the income arises so determines after consultation with the competent authority of the other Contracting State.” Id. art. XXII(6). The Department of the Treasury has analyzed the Convention in a so-called Technical Explanation, which explains that this limitation on treaty benefits was designed to prevent “treaty shopping”—the practice of moving, for example, to Switzerland specifically to benefit from the lower U.S. tax rate offered by the U.S.-Swiss tax treaty. Dep’t of the Treasury, Technical Explanation of the Convention Between the United States of America and the Swiss Confederation for the Avoidance of Double Taxation with Respect to Taxes on Income 62–63, http://www.irs.gov/pub/irs-trty/swistech.pdf [hereinafter “Technical Explanation”].
In 2007, Starr requested tax benefits under the discretionary provision [2] of the Convention via a letter to the U.S. Competent Authority, the IRS Deputy Commissioner (International) of the Large and Mid-Size Business Division. Countercl. ¶¶ 16–17, 19. In doing so, Starr acknowledged that it was not entitled to treaty benefits under any of the enumerated, mandatory categories. Id. ¶¶ 17, 19. In March 2010, not having received a response to its letter but wishing to reserve its right to a refund, Starr sent a 2007 tax-return form to the IRS Service Center in Ogden, Utah, contending that it had overpaid $38,181,246 in taxes—half of its withholdings on AIG dividends. Id. ¶ 20. Starr did not mark the “protective return” box provided on the form, but it wrote “Protective Refund Claim” on the header. Id. Starr forwarded the form to the IRS analyst working on its benefits request, who contacted the Utah Service Center to ensure that the refund was not *5 paid before Starr’s treaty benefits had been determined. Id. ¶ 21. In October 2010, the U.S. Competent Authority denied Starr’s request to apply the Convention to reduce Starr’s 2007 withholding tax. Id. ¶ 22. Starr was, however, later issued a Convention-based refund for its 2008 taxes. Id. ¶¶ 45–46.
Starr brought suit in September 2014, claiming that the IRS had erroneously denied its request for benefits under the Convention. Starr contends that the IRS abused its discretion because (1) Starr was not treaty shopping when it relocated to Switzerland, (2) the IRS failed to consult with the Swiss Competent Authority before denying Starr’s request, and (3) the IRS had no legal basis for issuing Starr a 2008 refund while denying its 2007 request based on the same material facts. Compl. ¶¶ 36–50. The IRS has raised two main defenses to Starr’s claims: that the U.S. Competent Authority’s decision is committed to agency discretion by law and, alternatively, that the Court lacks jurisdiction under the political-question doctrine. [3] The IRS has also moved to dismiss Starr’s claims under those same defenses. [4] Starr has moved to strike the IRS’s justiciability defenses, contending that the committed-to-agency-discretion exception to judicial review does not apply to tax-refund suits and that Starr’s challenge does not raise an unreviewable political question. The Court held a hearing on the motions on May 12, 2015.
*6 II. Standard of Review
The Court may strike insufficient defenses or “any redundant, immaterial, impertinent, or
scandalous matter.” Fed. R. Civ. P. 12(f). “‘The decision to grant or deny a motion to strike is
vested in the trial judge’s sound discretion.’ . . . However, a motion to strike is a drastic remedy that
courts disfavor.” Gates v. District of Columbia,
In response to a motion to dismiss a complaint for lack of subject-matter jurisdiction under
Federal Rule of Civil Procedure 12(b)(1), the plaintiff must prove by a preponderance of the
evidence that the court has jurisdiction. E.g., Biton v. Palestinian Interim Self-Gov’t Auth., 310 F.
Supp. 2d 172, 176 (D.D.C. 2004). A court “assume[s] the truth of all material factual allegations in
the complaint and ‘construe[s] the complaint liberally, granting [the] plaintiff the benefit of all
inferences that can be derived from the facts alleged.’” Am. Nat’l Ins. Co. v. FDIC,
To survive a motion to dismiss for failure to state a claim under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). While the court must “assume [the] veracity” of any “well-pleaded factual allegations” in the complaint, conclusory allegations “are not entitled to the assumption of truth.” Id. at 679.
III. Analysis
Starr seeks a refund under 26 U.S.C. § 7422 and 28 U.S.C. § 1346(a)(1), which create a cause of action for the recovery of “erroneously or illegally assessed” taxes, claiming that the IRS abused its discretion in denying Starr benefits under the Convention. Neither party questions that refund claims may be grounded in a tax-treaty provision. Instead, the dispute here surrounds whether Starr’s challenge to a particular IRS decision—one made under the discretionary provision contained in article XXII(6) of the Convention—is justiciable. The Court must first decide whether the committed-to-agency-discretion exception to judicial review can apply to tax-refund suits or is limited to suits brought under the Administrative Procedure Act (“APA”). If that exception is not so limited, the Court must then determine whether the IRS’s denial of benefits is nonjusticable for lack of a meaningful legal standard. Finally, the Court will independently assess whether the political-question doctrine precludes consideration of Starr’s tax-refund suit.
A. Whether the Committed-to-Agency-Discretion Exception to Judicial Review Applies Beyond the Administrative Procedure Act Before determining whether the committed-to-agency-discretion exception to judicial review bars this Court from hearing Starr’s claims, the Court must decide whether the exception even applies to this case. Starr has brought a claim under 26 U.S.C. § 7422 and 28 U.S.C. § 1346(a)(1), not the APA. The committed-to-agency-discretion exception, however, is linked *8 closely to language in the APA, which states that agency action is generally reviewable “except to the extent that . . . [it] is committed to agency discretion by law.” 5 U.S.C. § 701(a). Indeed, the IRS cites this provision of the APA in claiming that denials of tax benefits under the Convention are “committed to agency discretion by law.” Countercl. 2. Starr rejoins that “[t]he limitations that the government seeks to impose on this Court’s judicial review apply only to claims that are brought under the APA itself.” Mem. Supp. Mot. Strike 9 (emphasis added). The question therefore becomes whether this exception is limited to suits under the APA, as Starr urges, or whether it may carry over to challenges to government action brought under other laws (specifically, the tax-refund statute). Because the APA provision is but one manifestation of this well-established exception to judicial review, the Court concludes that the exception is not limited to suits brought under the APA and that the IRS may thus attempt to invoke it in this case.
The APA does explicitly carve out an exception to judicial review for action that is
committed to agency discretion by law. But this provision only “codifies ‘traditional principles of
nonreviewability.’” Oryszak v. Sullivan,
That still leaves the question of whether the exception may properly be applied in cases
involving tax determinations by the IRS. A party may generally bring a refund claim based on a
provision of a tax treaty, see, e.g., Del Commercial Properties, Inc. v. C.I.R.,
Other courts have considered the committed-to-agency-discretion exception in the context
of tax disputes not brought under the APA. Specifically, courts have applied the exception—and
found judicial review unavailable—in interest-abatement suits, wherein taxpayers sought reductions
in interest on late taxes by arguing that the IRS caused any delays. E.g., Selman v. United States,
Tax Analysts & Advocates v. Shultz,
B. Whether the IRS’s Determination Is Committed to Agency Discretion
Having found that the committed-to-agency-discretion exception to judicial review may be
invoked in tax-refund suits, the Court must determine whether the Convention at issue here in fact
approval Argabright,
precludes judicial review. An action is committed to agency discretion if the applicable provision
of law “is drawn so that a court would have no meaningful standard against which to judge the
agency’s exercise of discretion,” Heckler v. Chaney,
To determine whether judicial review of a particular agency action is unavailable, courts
consider “the nature of the administrative action at issue,” Twentymile Coal Co.,
1. Agency Action That Is Presumptively Unreviewable
The nature of the challenged action is particularly important in assessing reviewability
because courts presume that certain categories of agency decisionmaking are unreviewable. The
more prominent presumptive categories—prosecution or enforcement decisions, Wayte v. United
States, 470 U.S. 598, 607 (1985), and expenditures from a lump-sum appropriation, Lincoln v.
Vigil, 508 U.S. 182, 192 (1993)—are inapplicable here. The IRS contends that the presumption of
unreviewability should nonetheless apply because the discretionary provision calls for “executive
branch decision[s] involving complicated foreign policy matters.” Legal Assistance for Vietnamese
*13
Asylum Seekers v. Dep’t of State, 104 F.3d 1349, 1353 (D.C. Cir. 1997). But the foreign-policy
presumption is rarely used and applies only when an agency decision requires “balancing complex
concerns involving security and diplomacy resources.” Id. (holding that the State Department’s
decision to deny a consular visa was committed to agency discretion); see also U.S. Ordnance, Inc.
v. Dep’t of State,
2. Intent To Preclude Judicial Review
Having found that the discretionary provision of the Convention is not categorically
nonjusticiable, the Court turns to its “language, structure, and history.” United Food & Commercial
Workers Union, 484 U.S. at 130. “The interpretation of a treaty, like the interpretation of a statute,
begins with its text.” Abbott v. Abbott,
[a] person that is not entitled to the benefits of this Convention pursuant to the provisions of the preceding paragraphs may, nevertheless, be granted the benefits of the Convention if the competent authority of the State in which the income arises so determines after consultation with the competent authority of the other Contracting State.
U.S.-Swiss Tax Treaty art. XXII(6). By itself, this provision leaves the Court with little to latch
onto. It uses the language of open-ended permission rather than command. The treaty text alone,
then, leaves entirely open what the Competent Authority may consider when she “so determines”
*14
whether to grant or deny benefits. Such broadly permissive language may indicate an intent to
render agency action unreviewable. See, e.g., Steenholdt, 314 F.3d at 638 (finding unreviewable a
provision stating that “[t]he Administrator may rescind a delegation under [the relevant act] at any
time for any reason the Administrator considers appropriate” (quoting 49 U.S.C. § 44702));
Claybrook v. Slater,
Many statutes, however, afford agencies significant autonomy while remaining subject to
judicial review. See, e.g., Amador Cnty., 640 F.3d at 380–81 (rejecting that certain decisions were
committed to agency discretion simply “[b]ecause Congress used ‘may’ instead of ‘shall’”).
Permissive language alone may not be not enough to demonstrate that a decision has been
committed to agency discretion, because “[o]nly upon a showing of ‘clear and convincing evidence’
of a contrary legislative intent should the courts restrict access to judicial review.” Abbott Labs.,
Along with a provision’s language, courts consider the law’s overall structure and history in
determining whether the committed-to-agency-discretion exception applies. United Food &
Commercial Workers Union, 484 U.S. at 130. Neither Starr nor the IRS considers the discretionary
provision in a vacuum: Both also look to the Treasury Department’s Technical Explanation of the
Convention. Technical explanations are created by the Treasury Department during treaty
*15
negotiations and presented to the Senate for consideration during the ratification process. See
Xerox Corp. v. United States,
Here, the Technical Explanation provides that the
[discretionary] provision is included in recognition of the fact that, with the increasing scope and diversity of international economic relations, there may be cases where significant participation by third country residents in an enterprise of a Contracting State is warranted by sound business practice or long-standing business structures and does not necessarily indicate a motive of attempting to derive unintended Convention benefits.
Technical Explanation 72. In other words, the treaty is designed to ensure that legitimate Swiss and U.S. businesses do not pay full taxes in both countries, while also preventing companies from “treaty shopping” by changing their citizenship purely to obtain preferential tax treatment. Id. at 59–60. The Technical Explanation thus clarifies, to a large degree, the applicable legal standard when the Secretary of the Treasury evaluates a claim for benefits under the discretionary provision. Specifically, the Treasury Department informed the Senate that it would “base [its] determination . . . on whether the establishment, acquisition, or maintenance of the person seeking benefits under the Convention, or the conduct of such person’s operations, has or had as one of its principal purposes the obtaining of benefits under the convention.” Id. at 72. The Technical Explanation, which was transmitted to the Senate before it consented to the Convention, thus put the Senate on notice of how the IRS would endeavor to exercise its authority under the discretionary provision.
So too did the testimony offered to the Senate Foreign Relations Committee by the Treasury Department’s Deputy Assistant Secretary for International Tax Affairs. According to this Treasury *16 official, when implementing the discretionary provision, the IRS would seek to determine whether entities “can establish a substantial non-treaty-shopping motive for establishing themselves in their country of residence.” Mem. Supp. Mot. Dismiss 9 (quoting Bilateral Tax Treaties and Protocol: Hearing Before the S. Comm. on Foreign Relations, 105th Cong. 354 (1997) (Statement of Joseph Guttentag, Deputy Asst. Sec., Int’l Tax, Dep’t of Treas.). Moreover, the IRS effectively acknowledged in its formal letter denying Starr’s refund for the 2007 tax year that it relies on the standard described in the Technical Explanation to make determinations under the discretionary provision. See Letter from Michael Danilack, U.S. Competent Auth. Deputy Comm’r (Int’l), to Bertil Lunquist, Starr Gen. Counsel (Oct. 13, 2010), Admin. R. at USCA0866. In that letter, the IRS explained that it could not “conclude that obtaining treaty benefits was not at least one of the principal purposes for moving Starr’s management, and therefore its residency, to Switzerland.” Id. And although the Technical Explanation’s “principal purpose” language is not part of the Convention itself, the Senate was informed that the IRS would apply this test whenever it made a determination under the discretionary provision. The Senate, then, likely did not intend to allow the IRS to grant or deny benefits willy nilly. Rather, the Convention enables courts to review the IRS’s actions against a coherent legal benchmark: the “principal purpose” test.
Other than the discretionary provision’s permissive language, the only evidence indicating an intent to preclude judicial review is one sentence in a Senate report describing the discretionary provision as “a portion of the qualified resident definition . . . under which the Secretary of the Treasury may, in his sole discretion, treat a foreign corporation as a qualified resident of a foreign country[.]” Tax Convention with Switzerland, S. Exec. Rep. No. 105-10, at 54 (1997). This lone statement does not explicitly discuss judicial review, but it nonetheless provides some evidence of an intent to preclude such review. That being said, because the history of the Convention sends mixed messages about whether the treatymakers intended decisions under the discretionary *17 provision to be reviewable, the Court finds that the IRS has not presented clear and convincing evidence that the discretionary provision was intended to preclude judicial review. Indeed, the structured guidance set forth in the Technical Explanation—along with the lack of any express preclusion of judicial review—renders the issue sufficiently ambiguous that the presumption of reviewability controls.
3. The Existence of Judicially Manageable Standards for Review
Even when the bare statutory text contains no judicially manageable standards, an agency
itself—by supplying a list of factors to guide its determination—may provide standards for judicial
review of highly discretionary agency action. Clifford,
Although the Convention does not expressly preclude judicial review, the discretionary
provision may still be nonjusticiable if any standards the court might apply are so broad and vague
that judicial review would be “conceptually equivalent to . . . no review at all.” Marshall Cnty.
Health Care Auth. v. Shalala,
The Court is not so daunted by the prospect of reviewing the IRS’s determinations. Courts
routinely face somewhat amorphous and open-ended standards. For instance, the D.C. Circuit has
held that the phrase “in the interests of justice” provides sufficient guidance to allow at least some
minimal judicial review. Dickson v. Sec. of Defense, 68 F.3d 1396, 1399 (D.C. Cir. 1995). Indeed,
the discretionary provision would not be the first principal-purpose test that a court confronted.
See, e.g., City of Columbus v. C.I.R., 112 F.3d 1201, 1204 (D.C. Cir. 1997) (analyzing a Treasury
Department regulation that defined an “investment-type property” as “a prepayment for property or
services . . . if a
principal purpose
for prepaying is to receive an investment return from the time the
prepayment is made until the time payment otherwise would be made” (emphasis added)); Am.
Fed’n of Labor and Congress of Indus. Orgs. v. Donovan,
Put simply, the committed-to-agency-discretion exception to judicial review is extremely narrow where, as here, no presumption of unreviewability applies. And the Technical Explanation provides meaningful standards—namely, whether an applicant’s principal purpose was treaty shopping—that enable a court to determine whether the IRS abused its discretion in denying treaty benefits. Because this inquiry is not directionless, denials of tax benefits under the discretionary provision are not committed to the IRS’s unreviewable discretion.
C. Whether This Case Is Nonjusticiable Under the Political-Question Doctrine
The IRS also contends that the Court may not review the U.S. Competent Authority’s
decision to deny Starr benefits under the Convention because to do so would run afoul of the
political-question doctrine. That doctrine, like the committed-to-agency-discretion principle, is a
“narrow exception” to federal courts’ duty to decide cases properly before them. Zivotofsky ex rel.
Zivotofsky v. Clinton,
The Supreme Court has recently explained that a political question exists “where there is ‘a
textually demonstrable constitutional commitment of the issue to a coordinate political department;
or a lack of judicially discoverable and manageable standards for resolving it.’” Zivotofsky, 132 S.
Ct. at 1427 (quoting Nixon v. United States,
The IRS contends that judicial review under the discretionary provision’s consultation requirement would impinge on the Executive’s allegedly exclusive authority to “formulate and implement foreign policy.” Def.’s Mot. Dismiss 32. But that requirement is not presently implicated, because the Convention does not condition the denial of treaty benefits on a prior consultation with Swiss officials. The relevant Treasury official need “consul[t] with the competent authority of the other Contracting State” only when a claimant would be “ granted the benefits of the Convention.” U.S.-Swiss Tax Treaty art. XXII(6) (emphasis added). In a properly presented case challenging the conferral (rather than the denial) of benefits under the discretionary provision, the Court might well question its authority to instruct an executive-branch employee to consult with the agent of a foreign sovereign. At present, though, that constitutional issue remains an abstract one. The Court therefore declines to consider it.
In its seminal (if dated) distillation of the political-question doctrine, the Supreme Court in
Baker v. Carr listed six considerations “[p]rominent on the surface of any case held to involve a
political question.” Baker,
[3] the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or [4] the impossibility of a court’s undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or [5] an unusual need for unquestioning adherence to a political decision already made; or [6] the potentiality of embarrassment from multifarious pronouncements by various departments on one question.
Baker, 369 U.S. at 217. As demonstrated above, the decision to award or deny tax-treaty benefits
does not require policy determinations or diplomatic value judgments. Assessing litigants’
entitlement to relief under federal law is, rather, “a familiar judicial exercise.” Zivotofsky, 132 S.
Ct. at 1427. Nor is this uncharted judicial territory. See, e.g., Xerox Corp.,
Courts have properly refused to gauge such matters as “the wisdom of retaliatory military
action taken by the United States,” El-Shifa Pharm. Indus. Co. v. United States,
IV. Conclusion
For the reasons stated above, the Court will grant in part and deny in part Starr’s motion to strike and the IRS’s motion to dismiss. It will dismiss Starr’s claim that the IRS violated the Convention by failing to consult with the Swiss Competent Authority, but deny the motion to dismiss Starr’s claim in all other respects. And it will strike the IRS’s justiciability defenses. An appropriate Order accompanies this Memorandum Opinion.
CHRISTOPHER R. COOPER United States District Judge Date: September 18, 2015
Notes
[1] The nonjurisdictional facts in this section are drawn from Plaintiff’s complaint and Defendant’s amended answer and counterclaim, to the extent not disputed by Plaintiff. The Court assumes these facts to be true for purposes of deciding the present motions.
[2] This provision is informally known as the “discretionary provision.” See Technical Explanation 72. The Court’s adoption of this terminology has no bearing on its analysis of whether decisions made under the provision are in fact committed to the IRS’s discretion.
[3] The IRS has also asserted a counterclaim (one not currently before the Court) to recover the 2008 refund, asserting that Starr fraudulently procured it by failing to alert the Utah Service Center that the U.S. Competent Authority had denied Starr’s earlier request for relief.
[4] Starr asks that the IRS’s motion to dismiss be stricken because it was filed after the IRS’s answer.
The Court will instead convert the IRS’s motion into one for judgment on the pleadings pursuant to
Federal Rule of Civil Procedure 12(c). E.g., Langley v. Napolitano,
[5] Although Congress overturned this line of cases through a statutory amendment that made
abatement mandatory (rather than discretionary) in certain circumstances, the Supreme Court has
recognized that these decisions accurately interpreted the earlier statute that had provided for
discretionary abatement. See Hinck v. United States,
[7] Case law analyzing the reviewability of agency action typically takes congressional intent to be its
guiding principle. But treatymaking requires the input of the executive branch, the Senate, and a
negotiating counterparty. U.S. Const. art. II, § 2. Their collective intent controls here, as treaty
interpretation is “normally . . . a matter of determining the parties’ intent.” BG Grp., PLC v.
Republic of Argentina,