NFIB Files Amicus Brief Challenging Court of Appeals Ruling

Date: February 01, 2024

Connelly v. U.S. concerns the federal estate tax

WASHINGTON, D.C. (Feb. 1, 2024)NFIB filed an amicus brief in the case Thomas Connelly v. United States of America at the United States Supreme Court. The case questions whether the proceeds of a life insurance policy taken out by a closely held company on a shareholder constitutes an asset of the company when calculating the value of the shareholder’s shares for purposes of the federal estate tax. NFIB filed the brief with the U.S. Chamber Litigation Center.

“Many closely held companies are small and family-owned businesses and are critical to their local economy,” said Beth Milito, Executive Director of NFIB’s Small Business Legal Center. “This case highlights the complex challenges those small businesses face with the federal estate tax. We urge the Supreme Court to reverse the Court of Appeals decision.”

NFIB’s amicus brief argues three main points: 1) closely held companies play a vital role in the economy, 2) redemption agreements and life insurance are vital, prudent planning tools for closely held companies that the decision below improperly threatens, 3) the IRS’s inconsistent positions and lack of reasoned explanation disentitle its current interpretation to deference.

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.

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