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Supreme Court hears arguments on tax assessments, qualified immunity

The US Supreme Court [official website] heard oral arguments [day call, PDF] Tuesday in two cases. In United States v. Home Concrete & Supply LLC [transcript, PDF; JURIST report] the court heard arguments on what can activate an "extended six-year assessment" period for taxes. The case questions if an understatement of gross income attributable to an overstatement of property assets can trigger this period. A Department of Treasury regulation holds that it does, and the court will also examine if this regulation should have judicial deference. The US Court of Appeals for the Fourth Circuit ruled [opinion, PDF] that the assessment should not have been initiated, and that the Department of Treasury's regulation was not holding. Counsel for the US argued that that Treasury Department's "regulations reflect a reasonable interpretation of ambiguous statutory language and they are accordingly entitled to deference under Chevron [opinion]." Counsel for Home Concrete & Supply argued that, "an overstatement of basis is not an omission from gross income."

In Filarsky v. Delia [transcript, PDF] the court heard arguments on whether a lawyer retained to work with government employees in conducting an internal affairs investigation is precluded from asserting qualified immunity [Cornell LII backgrounder] solely because of his status as a "private" lawyer rather than a government employee. Firefighter Nicholas Delia brought suit against the city of Rialto, the Rialto Fire Department, several city officials and a private attorney, Steve Filarsky, for violating his constitutional rights during an internal affairs investigation. The US Court of Appeals for the Ninth Circuit ruled [opinion, PDF] that Delia's rights were violated but that the officials were entitled to qualified immunity because the right was not clearly established. The Ninth Circuit also found that the private attorney was not entitled to qualified immunity. Counsel for Filarsky argued:

When a private attorney is temporarily retained by the government to work in coordination with or under the direct supervision of government employees in fulfilling the government's business, in getting the government's work done, that attorney is entitled to the same immunity that a government employee performing that same function for that same government would receive. In this case that is qualified immunity. That rule comports with the history and policy concerns that have animated this Court's section 1983 and immunity jurisprudence.
Counsel for the US government argued in support of Filarsky as amicus curiae. Counsel for Delia responded: "The Petitioner has not demonstrated a historical basis of immunity at common law for somebody in Mr. Filarsky's situation. The Petitioner has also not shown that the immunity's purposes also serve Mr. Filarsky's situation here."

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