In American Financial Group v. United States, the Sixth Circuit recently rejected an IRS appeal seeking a determination that a $59 million deduction taken by an insurance company was inappropriate. The appeal ultimately turned on an actuarial guideline issued by the National Association of Insurance Commissioners concerning how insurance companies should handle accounting questions connected to annuities. Without subjecting the reader to the intricacies of the relevant tax law (which I confess not to understand), much of the appeal turned on what the word “prescribe” meant in the relevant statute. The Court surveyed a number of sources, including the dictionary and the legislative history offered by the IRS. On balance, the Court seemed less enthused about the legislative history (or at least the IRS’ snippets of it) than the pragmatic interpretation of “prescribed” in the relevant context. Relying on a plain language interpretation, the Court upheld the deduction.
We had also reported recently on the use and importance of amicus briefs at the Sixth Circuit, in posts here and here. In this opinion, because the case turned in some measure on guidance from the National Association of Insurance Commissioners, the Court specifically noted the position taken by the association in an amicus brief filed before it. The amicus brief was drafted by Aneca Lasley (of Squire Sanders’ Columbus office). Consistent with our analysis in the prior posts, this case appeared to be tailor-made for one in which an amicus could have an influential role.