Tenth Circuit Limits Reach of Treasury Regulations in Liberty Global Case

Reliance on regulatory text alone no longer ensures safety—courts are reasserting the statute as the ultimate boundary for tax outcomes.

The Tenth Circuit’s ruling in Liberty Global Inc. v. Commissioner underscores a growing judicial trend: courts are less willing to defer to Treasury regulations when statutory text is clear.

The case, involving the foreign tax credit limitation under IRC §904(f)(3), rejected the taxpayer’s reliance on pre-2012 regulations that treated all gain from the …