The latest challenge to the Affordable Care Act (ACA) has been unsuccessful. On June 17, 2021, the Supreme Court issued a 7-2 decision in California v. Texas, 593 U.S. ____ (2021), dismissing the case for the plaintiffs’ lack of standing to sue. California v. Texas challenged the constitutionality of the ACA, but the Court did not rule on this issue and, instead, dismissed the case on procedural grounds. Last year, some taxpayers filed protective claims with the IRS to preserve their right to a refund for 2016 (for statute of limitations purposes) in the event that California v. Texas led to the ACA being struck down; in the entertainment industry, many business managers and accountants filed such protective claims on behalf of their clients. The Court’s ruling means that there will be no refunds with respect to such protective claims.
For our previous article discussing the filing of protective claims with respect to California v. Texas, see here.
Venable continues to monitor the latest developments in the law and stands ready to advise. To learn more about Venable’s Tax practice, click here.