As you may know, several taxpayers have sued the federal government because they believe they were underpaid under the Section 1603 grant program. Indeed, the taxpayer in the Alta Wind case was successful in convincing the court that the government had inappropriately reduced the amount of its 1603 grant by approximately $200 million. For more information about the Alta Wind case, see our previous On the Subject, “Act Now to Preserve Your Section 1603 Grant.” We have been following these cases, and believe that the grant applicants have strong arguments in their favor. As expected, right before the New Year, the US government appealed the Alta Wind case, asking the US Court of Appeals for the Federal Circuit to overturn that decision.
Taxpayers with the same or similar legal issue need to make a decision of what to do. We strongly recommend that you file your case immediately against the government seeking redress for the inappropriate reduction in the amount of the 1603 grant that the government paid to you. If you file suit, we expect the court will stay your case pending the outcome of the Alta Wind appeal. Nevertheless, we believe that this is the best course of action for the reasons outlined below:
- First, filing suit now will toll the statute of limitations on your claims. Every case must be filed within the statute of limitations. If you do not file your suit within the statute of limitations, you will not be permitted to file suit in the future. Appeals can take years to resolve. If you wait until the court rules on the Alta Wind appeal you risk losing your claim because the statute of limitations may have expired by the time that case is fully decided. Filing your claim now will stop the limitations period from running, preserving your ability to have your claims heard by the court.
- Second, we expect that the appeals court will affirm the taxpayer’s win in Alta Wind. If you have a pending case in court when that occurs, you will be in a better position than those taxpayers who wait to file suit because the government will have to address your case immediately after the appeal is decided and the stay is lifted. Moreover, filing suit and “getting in line” early will be especially important if the government tries to settle the claims against it because you will be able to argue that you should be entitled to a greater percentage of your claim than if you had filed after the appellate court rules against the government.
- Lastly, filing suit now will increase your ability to withstand any attempts by the US Department of the Treasury to retroactively change the 1603 grant program. The new administration has taken over, and it is possible that it could implement rules for the Section 1603 grant program that are harmful to your claim and try to implement them retroactively. That is an issue that would have to be litigated, but your argument would be easier to make if you have a pending case at the time the rules are implemented.
We estimate that the cost of filing your suit will be very low, but the benefits can be very important to positioning yourself for the best possible outcome.
Additionally, we would encourage you to join forces with other taxpayers that have the same or similar issue, and file an amicus (“friend of the court”) brief in the pending Alta Wind appeals case. We are in the process of assembling a coalition of taxpayers to file an amicus brief. The amicus brief would, of course, be in support of the taxpayer’s case and legal theory, which could also improve your case in court.