We have previously written about QinetiQ U.S. Holdings. Inc.’s (QinetiQ) fight to apply the Administrative Procedure Act (APA) to notices of deficiency issued by the Internal Revenue Service (IRS). (See below for our recent coverage.)

In short, the Tax Court and the US Court of Appeals for the Fourth Circuit rejected QinetiQ’s argument that a one-sentence reason for a deficiency determination contained in a notice of deficiency violated the APA because it was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Undeterred, QinetiQ filed a petition for certiorari seeking review from the Supreme Court. Alas, the saga ends for QinetiQ as the Supreme Court denied the petition this morning.

Practice Point: Although QinetiQ was not successful in its APA arguments, other APA arguments in the tax law have gained considerable traction in recent years. We will be posting soon on the recent order out of the Western District of Texas invaliding Treas. Reg. § 1.7874-8T on the grounds that this temporary regulations was unlawfully issued without adherence to the APA’s notice-and-comment requirements. Additionally, as we previously noted, other procedural arguments exists when a notice of deficiency contains a minimal explanation, such as potentially shifting the burden of proof to the IRS.