On August 18, 2004, the IRS and Treasury Department published a notice of proposed rulemaking (REG-130863-04, 2004-2 C.B. 538) in the Federal Register (69 FR 51209) proposing regulations that would provide guidance regarding the effect of certain transfers of assets or stock on the qualification of a transaction as a reorganization under section 368(a) (the proposed regulations). The proposed regulations also included amendments to the continuity of business enterprise (COBE) regulations under §1.368-1(d) and the definition of a “party to a reorganization” under §1.368-2(f). The proposed regulations replaced an earlier proposal, dated March 2, 2004 (REG-165579-02, 2004-1 C.B. 651) and published in the Federal Register (69 FR 9771), which was withdrawn. No public hearing regarding the proposed regulations was requested or held. However, a number of comments were received, the most significant of which are discussed in this preamble.

The theory underlying the tax-free treatment afforded reorganizations described in section 368 is that such transactions “effect only a readjustment of continuing interest in property under modified corporate forms.” See §1.368-1(b). The continuity of interest and continuity of business enterprise requirements are expressions of this principle. Earlier cases also implemented this principle through a concept that later became known as the prohibition of “remote” continuity of interest. Commonly viewed as arising out of the Supreme Court decisions in Groman v. Commissioner, 302 U.S. 82 (1937), and Helvering v. Bashford, 302 U.S. 454 (1938), remote continuity of interest focuses on the link between the former target corporation (T) shareholders and the T business assets following the reorganization.

Since the Supreme Court’s decisions in Groman and Bashford, it has been recognized that other transactions, including transactions involving the same level of “remoteness” as addressed in the Groman and Bashford decisions, adequately preserve the link between the former T shareholders and the T business assets and therefore constitute mere readjustments of continuing interests. Accordingly, legislative, regulatory, and administrative developments have provided significantly more flexibility regarding transfers of stock and assets following otherwise tax-free reorganizations where this link is adequately maintained. For example, Congress enacted section 368(a)(2)(D) to expressly allow a triangular reorganization by permitting a controlled subsidiary to use its parent’s stock as consideration in a merger. Similarly, the term “party to a reorganization” was broadened to include the parent in such a case.

In addition, Congress enacted section 368(a)(2)(C), which provides that a transaction otherwise qualifying under section 368(a)(1)(A), (B), (C), or (G) (where the requirements of section 354(b) are met) is not disqualified where part or all of the acquired assets or stock is transferred to a corporation that is controlled (as defined in section 368(c)) by the acquiring corporation. Section 1.368-2(k), as in effect prior to these final regulations, expanded the scope of section 368(a)(2)(C) by permitting successive transfers of the acquired assets or stock to one or more corporations, provided that the transferee corporation was controlled in each transfer by the transferor corporation. Administratively, the IRS and Treasury Department have since interpreted section 368(a)(2)(C) and §1.368-2(k) as permissive rather than exclusive or restrictive, concluding that certain transfers not specifically described in either of those provisions did not disqualify the reorganization. See Rev. Rul. 2001-24, 2001-1 C.B. 1290, permitting the transfer of acquiring subsidiary stock to a controlled subsidiary following a reorganization described in section 368(a)(1)(A) by reason of (a)(2)(D), and Rev. Rul. 2002-85, 2002-2 C.B. 986, permitting the transfer of acquired assets to a controlled subsidiary following a reorganization described in section 368(a)(1)(D).

The current regulations do not contain separate rules addressing remote continuity because the IRS and Treasury Department believe that these issues are adequately addressed by the rules adopted to implement the continuity of business enterprise requirement. See T.D. 8760, 1998-1 C.B. 803 [63 FR 4174]. Similarly, the rules relating to the continuity of business enterprise requirement have been broadened over the years to permit transactions that adequately preserve the link between the former T shareholders and the T business assets. Under §1.368-1(d), as in effect prior to these final regulations, the COBE requirement generally is satisfied as long as a member of the qualified group (or, in certain cases, a partnership) either continues T’s historic business or uses a significant portion of T’s historic business assets in a business. A qualified group is defined in §1.368-1(d)(4)(ii), as in effect prior to these final regulations, as one or more chains of corporations connected through stock ownership with the issuing corporation, but only if the issuing corporation owns directly stock meeting the requirements of section 368(c) in at least one of the corporations, and stock meeting the requirements of section 368(c) in each of the corporations (other than the issuing corporation) is owned directly by one of the other corporations.

These final regulations continue the trend of broadening the rules regarding transfers of assets or stock following an otherwise tax-free reorganization where the transaction adequately preserves the link between the former T shareholders and the T business assets. Accordingly, the definition of a “qualified group” in §1.368-1(d)(4)(ii) and the rules regarding stock or asset transfers in §1.368-2(k) have been expanded. Conforming changes to §1.368-2(f), relating to the definition of “a party to a reorganization,” also have been made.

Several commentators urged that the definition of “qualified group” under §1.368-1(d)(4)(ii) should not be restricted by the control requirement of section 368(c), but rather should be expanded to parallel the definition of an affiliated group under section 1504(a). The IRS and Treasury Department have declined to make this change, primarily because the section 368(c) definition of control is a major structural component underlying the statutory framework of the reorganization provisions. On the other hand, the IRS and Treasury Department have concluded that it is consistent with reorganization policy to expand the definition of a qualified group. Specifically, §1.368-1(d)(4)(ii), as revised by this Treasury decision, permits qualified group members to aggregate their direct stock ownership of a corporation in determining whether they own the requisite section 368(c) control in such corporation (provided that the issuing corporation owns directly stock meeting such control requirement in at least one other corporation). This aggregation concept is similar to the one found in section 1504(a). The IRS and Treasury Department believe that aggregating stock ownership within the qualified group adequately preserves the link between the former T shareholders and the T business assets while further facilitating the post-acquisition relocation of assets and stock as necessary within the group.

Finally, as discussed in section B.3. of this preamble, and in response to comments, the COBE regulations have been expanded to provide that if members of the qualified group own interests in a partnership that meets requirements equivalent to the control definition in section 368(c), any stock owned by such partnership is treated as owned by members of the qualified group. Thus, for example, following a reorganization under section 368(a)(1)(B), T remains a member of the qualified group upon a transfer of the T stock to a partnership in which members of the qualified group own all the interests. See section B.3. of this preamble. Similarly, a wholly owned subsidiary of a partnership in which members of the qualified group own all the interests will be a member of the qualified group. Accordingly, following a reorganization under section 368(a)(1)(A), the acquiring corporation may transfer the T assets to the subsidiary (either directly or through the partnership) without violating the COBE requirement.

As provided in §1.368-1(a), a transaction must be evaluated under all relevant provisions of law, including the step transaction doctrine, in determining whether it qualifies as a reorganization under section 368(a). Section 1.368-2 provides guidance regarding whether a transaction satisfies the explicit statutory requirements of a particular reorganization. Section 1.368-2(k) generally provides that a transaction otherwise qualifying as a reorganization will not be disqualified as a result of certain subsequent transfers of assets or stock. The fact that a subsequent transfer of assets or stock is not described in §1.368-2(k) does not necessarily preclude reorganization qualification, but the overall transaction would then be subject to analysis under the step transaction doctrine.

These final regulations adopt the rules of the proposed regulations regarding subsequent transfers of assets or stock with certain modifications. Section 1.368-2(k), as revised by this Treasury decision, generally provides that a transaction otherwise qualifying as a reorganization under section 368(a) shall not be disqualified or recharacterized as a result of one or more subsequent transfers (or successive transfers) of assets or stock, provided that the COBE requirement is satisfied and the transfer(s) qualify as “distributions” or “other transfers” (as described in §1.368-2(k)(1), and as discussed in section B.1. and B.2., respectively, of this preamble).

Proposed §1.368-2(k) would permit the acquiring corporation to distribute to certain shareholders part or all of the stock or assets acquired in a transaction otherwise qualifying as a reorganization without affecting its characterization as such. The proposed regulations would generally permit distributions to certain shareholders provided that no distributee receives “substantially all” of the acquired assets, including the assets of a corporation whose stock is acquired in the reorganization, or stock constituting control of the acquired corporation. This limitation reflected the concern that such a transaction might be more properly characterized as a direct acquisition by the distributee. For example, Rev. Rul. 67-274, 1967-2 C.B. 141, held that an acquisition of T stock in a purported reorganization under section 368(a)(1)(B) followed by a prearranged liquidation of T is treated as a reorganization under section 368(a)(1)(C); Rev. Rul. 72-405, 1972-2 C.B. 217, held that an acquisition of T in a forward triangular merger followed by a prearranged liquidation of the acquiring corporation is treated as a reorganization under section 368(a)(1)(C); and Rev. Rul. 2004-83, 2004-2 C.B. 157, held that a purchase of T stock from the common shareholder followed by a prearranged liquidation of T is treated as a reorganization under section 368(a)(1)(D).

Commentators raised an administrative concern that the parameters of the “substantially all” standard are less than certain, at least under case law, and, thus, requested that a safe harbor test be adopted in the final regulations. The IRS and Treasury Department believe that this is a valid concern. Accordingly, these final regulations have adopted a different approach than the “substantially all” standard of the proposed regulations. The new approach in these final regulations focuses on whether the distribution consists of an amount of assets (disregarding any assets held by the acquiring corporation, or the merged corporation in the case of a reorganization under section 368(a)(1)(A) by reason of (a)(2)(E), prior to the transaction) that would result in the distributing corporation being treated as liquidated for Federal income tax purposes.

The IRS and Treasury Department believe that this approach will be easier for taxpayers to apply and the government to administer than the “substantially all” standard in the proposed regulations. In addition, this approach more fully preserves the analysis and conclusions set forth in Rev. Rul. 67-274, Rev. Rul. 72-405, and Rev. Rul. 2004-83, in the context of Congress having required the target corporation to liquidate in all asset reorganizations. Finally, this approach more consistently applies the principles of section 368(a)(2)(C) (which allows for transfers of all of the acquired assets or stock) to post-acquisition distributions.

Specifically, these final regulations provide that a transaction otherwise qualifying as a reorganization will not be disqualified or recharacterized as a result of one or more distributions of assets, stock of the acquired corporation, or both, provided the COBE requirement is satisfied and the distributions do not result in a liquidation of the distributing corporation for Federal income tax purposes (disregarding, for this purpose, assets held by the acquiring corporation, or the merged corporation in the case of a reorganization under section 368(a)(1)(A) by reason of (a)(2)(E), prior to the transaction). Additionally, in the case of distributions of stock of the acquired corporation, these final regulations only protect the transaction from disqualification or recharacterization if the distributions consist of less than all of the stock of the acquired corporation that was acquired in the transaction and do not cause the acquired corporation to cease to be a member of the qualified group.

These final regulations also clarify that certain indirect distributions of assets are treated under §1.368-2(k) in the same manner as a direct distribution of those assets. For example, such an indirect distribution of assets can occur where, following a transaction that otherwise qualifies as a reorganization under section 368(a)(1)(A), the acquiring corporation transfers a portion of the T assets to a partnership (or a corporation) in exchange for an interest in the transferee partnership (or stock in the transferee corporation) in an “other transfer” described in §1.368-2(k)(1)(ii), and then distributes that partnership interest (or stock) to a shareholder.

Finally, the IRS and Treasury Department believe that distributions of assets under these final regulations that involve the assumption of liabilities are distinguishable from the transaction analyzed in Rev. Rul. 70-107, 1970-1 C.B. 78. That ruling considered a transaction in which the acquiring corporation acquired all of the target corporation’s assets in exchange for voting stock of the acquiring corporation’s parent. In the transaction, the target corporation’s liabilities were assumed in part by the acquiring corporation and in part by the acquiring corporation’s parent. The ruling holds that the parent corporation’s direct assumption of some of the target corporation’s liabilities violates the solely for voting stock requirement of section 368(a)(1)(C). These final regulations do not implicate the fact pattern addressed in Rev. Rul. 70-107.

Proposed §1.368-2(k) would provide, in part, that a transaction otherwise qualifying as a reorganization under section 368(a) would not be disqualified if any assets or stock of a party to the reorganization, other than the stock of the issuing corporation, is subsequently transferred to a member of the qualified group. Commentators asked that the reference to transfers of stock of the issuing corporation be removed, stating that the effect, if any, of a transfer of the stock of the issuing corporation is adequately addressed by the continuity of interest rules under §1.368-1(e). The IRS and Treasury Department agree. In response to this comment (and comments regarding the interaction with the definition of a party to the reorganization in §1.368-2(f)), this provision has been revised to refer to the assets or stock of the acquired corporation, the acquiring corporation, or the surviving corporation, as the case may be.

Accordingly, these final regulations provide that a transaction otherwise qualifying as a reorganization will not be disqualified or recharacterized as a result of one or more transfers (that do not constitute distributions) of assets or stock, or both, of the acquired corporation, the acquiring corporation, or the surviving corporation, as the case may be, provided the COBE requirement is satisfied, and the acquired corporation, the acquiring corporation, or the surviving corporation, as the case may be, does not terminate its corporate existence in connection with the transfer(s). In the case of transfers of stock of the acquired corporation, the acquiring corporation, or the surviving corporation, as the case may be, these final regulations only protect the transaction from disqualification or recharacterization if the transfers do not cause such corporation to cease to be a member of the qualified group.

Example 3 of former §1.368-2(k), issued January 28, 1998 (63 FR 4174), involved a transfer of stock of the acquired corporation to a partnership. In the example, P acquired all the stock of T solely in exchange for P stock in a transaction that otherwise qualified as a reorganization under section 368(a)(1)(B). Immediately thereafter, P transferred the T stock to members of its qualified group, who then transferred the T stock to a partnership all of the interests in which were owned by such members. The example concludes that because the transfer of T stock to the partnership is not described in §1.368-2(k), the characterization of the transaction must be determined under relevant provisions of law, including the step transaction doctrine. The example further concludes that the transaction fails to meet the control requirement of a reorganization described in section 368(a)(1)(B) because immediately after the transaction the acquiring corporation does not have control of T. The preamble to the proposed regulations indicated that the IRS and Treasury Department were reexamining the conclusion set forth in Example 3 and requested comments in this regard. Consequently, Example 3 was not included in the proposed regulations. Comments were received and considered in the course of studying this issue.

After further examination, the IRS and Treasury Department have concluded that transfers of stock of a corporation to a controlled partnership (that is, one in which members of the qualified group own interests meeting requirements equivalent to section 368(c)) adequately preserve the link between the former T shareholders and the T business assets. This section 368(c) equivalent control standard is applied to transfers of stock to a partnership in order to protect the section 368(c) control requirement applicable to triangular and stock acquisition reorganizations. Accordingly, these final regulations reverse the conclusion reached in Example 3 of former §1.368-2(k).

To accommodate these policy considerations, the final regulations permit both distributions of stock of the acquired corporation and other transfers of stock of the acquired corporation, the acquiring corporation, or the surviving corporation, as the case may be, provided the transfer of stock does not cause the transferred corporation to cease to be a member of the COBE qualified group. To that end, as described in section A. of this preamble, the COBE regulations have been expanded to provide that if members of the qualified group own interests in a partnership that meet requirements equivalent to the control definition in section 368(c), any stock owned by such partnership is attributed to and treated as owned by members of the qualified group. Accordingly, this full stock attribution rule treats partnerships in a manner similar to members of the COBE qualified group.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations and, because these regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small businesses.

Paragraph 1. The authority citation for part 1 continues to read, in part, as follows:

Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 1.368-1 is amended as follows:

1. Paragraph (d)(4)(ii) is revised.

2. Paragraph (d)(4)(iii)(D) is added.

3. Paragraph (d)(4)(iv) is revised.

4. Paragraph (d)(5) introductory text is revised.

5. In paragraph (d)(5), Examples 7 through 12 are redesignated as Examples 8 through 13, respectively, and new Examples 7, 14, and 15 are added.

6. In paragraph (d)(5), the first sentences of paragraph (i) in redesignated Examples 9, 10, and 12 are revised.

The revisions and additions read as follows:

A 1986 amendment to the Internal Revenue Code permits the Treasury Secretary to abate interest that accrues on unpaid federal income taxes if the interest assessment is attributable to Internal Revenue Service (IRS) error or delay. 26 U.S.C. Sec. 6404(e)(1). Subsequently the federal courts uniformly held that the Secretary’s decision not to abate was not subject to judicial review. In 1996, Congress added what is now Sec. 6404(h), which states that the Tax Court has “jurisdiction over any action brought by a taxpayer who meets the requirements referred to in section 7430(c)(4)(A)(ii) to determine whether the Secretary’s failure to abate . . . was an abuse of discretion, and may order an abatement, if such action is brought within 180 days after the date of the mailing of the Secretary’s final determination not to abate. . . .” Sec. 6404(h)(1). Section 7430(c)(4)(A)(ii) in turn incorporates 28 U.S.C. Sec. 2412(d)(2)(B), which refers to individuals with a net worth not exceeding $2 million and businesses with a net worth not exceeding $7 million. The IRS denied petitioner Hincks’ request for abatement of interest assessed in 1999 for the period March 21, 1989, to April 1, 1993. The Hincks then filed suit in the Court of Federal Claims seeking review of the refusal to abate. The court granted the Government’s motion to dismiss, and the Federal Circuit affirmed, holding that Sec. 6404(h) vests exclusive jurisdiction to review interest abatement claims in the Tax Court.

Held: the Tax Court provides the exclusive forum for judicial review of a failure to abate interest under Sec. 6404(e)(1). This Court’s analysis is governed by the well-established principle that, in most contexts, “‘a precisely drawn, detailed statute pre-empts more general remedies,’” EC Term of Years Trust v. United States, 550 U.S. , ; it is also guided by the recognition that when Congress enacts a specific remedy when none was previously recognized, or when previous remedies were “problematic,” the remedy provided is generally regarded as exclusive, Block v. North Dakota ex rel. Board of Univ. and School Lands, 461 U.S. 273, 285. Section 6404(h) fits the bill on both counts. In a single sentence, it provides a forum for adjudication, a limited class of potential plaintiffs, a statute of limitations, a standard of review, and authorization for judicial relief; it was also enacted against a backdrop of decisions uniformly rejecting the possibility of any review of the Secretary’s Sec. 6404(e)(1) determinations. Though Congress failed explicitly to define the Tax Court’s jurisdiction as exclusive, it is quite plain that the terms of Sec. 6404(h) — a “precisely drawn, detailed statute” filling a perceived hole in the law — control all requests for review of Sec. 6404(e)(1) decisions, including the forum for adjudication. The Hincks correctly argue that Congress’s provision of an abuse of discretion standard removed one of the obstacles courts had held foreclosed judicial review of such determinations, but Congress did not simply supply this single missing ingredient in enacting Sec. 6404(h). Rather, it set out a carefully circumscribed, time-limited, plaintiff-specific provision, which also precisely defined the appropriate forum. This Court will not isolate one feature of this statute and use it to permit taxpayers to circumvent the other limiting features in the same statute, such as a shorter statute of limitations than in general refund suits or a net-worth ceiling for plaintiffs eligible to bring suit. Taxpayers could “effortlessly evade” these specific limitations by bringing interest abatement claims as tax refund actions in the district courts or the Court of Federal Claims, disaggregating a statute Congress plainly envisioned as a package deal. EC Term of Years Trust, supra, at . Equally unavailing are the Hincks’ contentions that reading Sec. 6404(h) to vest exclusive jurisdiction in the Tax Court impliedly repeals the pre-existing jurisdiction of the district courts and Court of Federal Claims, runs contrary to the structure of tax controversy jurisdiction, and would lead to the “unreasonable” result that taxpayers with net worths exceeding the specified ceilings would be foreclosed from seeking judicial review of Sec. 6404(e)(1) refusals to abate. Pp. 6-9.

446 F.3d 1307 affirmed.

ROBERTS, C.J., delivered the opinion for a unanimous Court.

CHIEF JUSTICE ROBERTS delivered the opinion of the Court.

Bad things happen if you fail to pay federal income taxes when due. One of them is that interest accrues on the unpaid amount. Sometimes it takes a while for the Internal Revenue Service (IRS) to determine that taxes should have been paid that were not. Section 6404(e)(1) of the Internal Revenue Code permits the Secretary of the Treasury to abate interest—to forgive it, partially or in whole—if the assessment of interest on a deficiency is attributable to unreasonable error or delay on the part of the IRS. Section 6404(h) allows for judicial review of the Secretary’s decision not to grant such relief. The question presented in this case is whether this review may be obtained only in the Tax Court, or may also be secured in the district courts and the Court of Federal Claims. We hold that the Tax Court provides the exclusive forum for judicial review of a refusal to abate interest under Sec. 6404(e)(1), and affirm.

The Internal Revenue Code provides that if any amount of assessed federal income tax is not paid “on or before the last date prescribed for payment,” interest “shall be paid for the period from such last date to the date paid.” 26 U.S.C. Sec. 6601(a). Section 6404 of the Code authorizes the Secretary of the Treasury to abate any tax or related liability in certain circumstances. As part of the Tax Reform Act of 1986, Congress amended Sec. 6404 to add subsection (e(1), which, as enacted, provided in pertinent part:

In the years following passage of Sec. 6404(e)(1), the federal courts uniformly held that the Secretary’s decision not to grant an abatement was not subject to judicial review. See, e.g., Argabright v. United States, 35 F.3d 472, 476 (CA9 1994); Selman v. United States, 941 F.2d 1060, 1064 (CA10 1991); Horton Homes, Inc. v. United States, 936 F.2d 548, 554 (CA11 1991); see also Bax v. Commissioner, 13 F.3d 54, 58 (CA2 1993). These decisions recognized that Sec. 6404(e)(1) gave the Secretary complete discretion to determine whether to abate interest, “neither indicat[ing] that such authority should be used universally nor provid[ing] any basis for distinguishing between the instances in which abatement should and should not be granted.” Selman, supra, at 1063. Any decision by the Secretary was accordingly “committed to agency discretion by law” under the Administrative Procedure Act, 5 U.S.C. Sec. 701(a)(2), and thereby insulated from judicial review. See, e.g., Webster v. Doe, 486 U.S. 592, 599 (1988); Heckler v. Chaney, 470 U.S. 821, 830 (1985).

In 1996, as part of the Taxpayer Bill of Rights 2, Congress again amended Sec. 6404, adding what is now subsection (h). As relevant, that provision states:

Section 7430(c)(4)(A)(ii) in turn incorporates 28 U.S.C. Sec. 2412(d)(2)(B), which refers to individuals with a net worth not exceeding $2 million and businesses with a net worth not exceeding $7 million. Congress made subsection (h) effective for all requests for abatement submitted to the IRS after July 30, 1996, regardless of the tax year involved. Sec. 302(b), 110 Stat.1458.^[1]

In 1986, petitioner John Hinck was a limited partner in an entity called Agri-Cal Venture Associates (ACVA). Along with his wife, petitioner Pamela Hinck, Hinck filed a joint return for 1986 reporting his share of losses from the partnership. The IRS later examined the tax returns for ACVA and proposed adjustments to deductions that the partnership had claimed for 1984, 1985, and 1986. In 1990, the IRS issued a final notice regarding the partnership’s returns, disallowing tens of millions of dollars of deductions. While the partnership sought administrative review of this decision, the Hincks, in May 1996, made an advance remittance of $93,890 to the IRS toward any personal deficiency that might result from a final adjustment of ACVA’s returns. In March, 1999, the Hincks reached a settlement with the IRS concerning the ACVA partnership adjustments, to the extent they affected the Hincks’ return. Shortly thereafter, as a result of the adjustments, the IRS imposed additional liability against the Hincks: $16,409 in tax and $21,669.22 in interest. The IRS applied the Hincks’ advance remittance to this amount and refunded them the balance of $55,811.78.

The Hincks filed a claim with the IRS contending that, because of IRS errors and delays, the interest assessed against them for the period from March 21, 1989, to April 1, 1993, should be abated under Sec. 6404(e)(1). The IRS denied the request. The Hincks then filed suit in the United States Court of Federal Claims seeking review of the refusal to abate. That court granted the Government’s motion to dismiss, 64 Fed. Cl. 71, 81 (2005), and the United States Court of Appeals for the Federal Circuit affirmed, 446 F.3d 1307, 1313-1314 (2006), holding that Sec. 6404(h) vests exclusive jurisdiction to review interest abatement claims under Sec. 6404(e)(1) in the Tax Court. Because this decision conflicted with the Fifth Circuit’s decision in Beall v. United States, 336 F.3d 419, 430 (2003) (holding that Sec. 6404(h) grants concurrent, rather than exclusive, jurisdiction to the Tax Court), we granted certiorari, 549 U.S. (2007).

Our analysis is governed by the well-established principle that, in most contexts, “‘a precisely drawn, detailed statute pre-empts more general remedies.’” EC Term of Years Trust v. United States, 550 U.S. , (2007), (slip op., at 4) (quoting Brown v. GSA, 425 U.S. 820, 834 (1976)); see also Block v. North Dakota ex rel. Board of Univ. and School Lands, 461 U.S. 273, 284-286 (1983). We are also guided by our past recognition that when Congress enacts a specific remedy when no remedy was previously recognized, or when previous remedies were “problematic,” the remedy provided is generally regarded as exclusive. Id. at 285; Brown, supra, at 826-829.

Section 6404(h) fits the bill on both counts. It is a “precisely drawn detailed statute” that, in a single sentence, provides a forum for adjudication, a limited class of potential plaintiffs, a statute of limitations, a standard of review, and authorization for judicial relief. And Congress enacted this provision against a backdrop of decisions uniformly rejecting the possibility of any review for taxpayers wishing to challenge the Secretary’s Sec. 6404(e)(1) determination. Therefore, despite Congress’s failure explicitly to define the Tax Court’s jurisdiction as exclusive, we think it quite plain that the terms of Sec. 6404(h)—a “precisely drawn, detailed statute” filling a perceived hole in the law—control all requests for review of Sec. 6404(e)(1) determinations. Those terms include the forum for adjudication.

The Hincks’ primary argument against exclusive Tax Court jurisdiction is that by providing a standard of review—abuse of discretion—in Sec. 6404(h), Congress eliminated the primary barrier to judicial review that courts had previously recognized; accordingly, they maintain, taxpayers may seek review of Sec. 6404(e)(1) determinations under statutes granting jurisdiction to the district courts and the Court of Federal Claims to review tax refund actions. See 28 U.S.C. Secs. 1346(a)(1); 1491(a)(1); 26 U.S.C. Sec. 7422(a). Or, as the Fifth Circuit reasoned: “[T]he federal district courts have always possessed jurisdiction over challenges brought to section 6404(e)(1) denials[;] they simply determined that the taxpayers had no substantive right whatever to a favorable exercise of the Secretary’s discretion. . . . [I]n enacting section 6404(h), Congress indicated that such is no longer the case, and thereby removed any impediment to district court review.” Beall, supra, at 428 (emphasis in original).

It is true that by providing an abuse of discretion standard, Congress removed one of the obstacles courts had held foreclosed judicial review of Sec. 6404(e)(1) determinations. See, e.g., Argabright, 35 F.3d at 476 (noting an absence of “‘judicially manageable standards’” (quoting Heckler, 470 U.S. at 830)). But in enacting Sec. 6404(h), Congress did not simply supply this single missing ingredient; rather, it set out a carefully circumscribed, time-limited, plaintiff-specific provision which also precisely defined the appropriate forum. We cannot accept the Hincks’ invitation to isolate one feature of this “precisely drawn, detailed statute” —the portion specifying a standard of review—and use it to permit taxpayers to circumvent the other limiting features Congress placed in the same statute—restrictions such as a shorter statute of limitations than general refund suits, compare Sec. 6404(h) (180-day limitations period) with Sec. 6532(a)(1) (2-year limitations period), or a net-worth ceiling for plaintiffs eligible to bring suit. Taxpayers could “effortlessly evade” these specific limitations by bringing interest abatement claims as tax refund actions in the district courts or the Court of Federal Claims, disaggregating a statute Congress plainly envisioned as a package deal. EC Term of Years Trust, supra, at (slip op., at 5); see also Block, supra, at 284-285; Brown, supra, 425 U.S. at 832-833.

The Hincks’ other contentions are equally unavailing. First, they claim that reading Sec. 6404(h) to vest exclusive jurisdiction in the Tax Court impliedly repeals the preexisting jurisdiction of the district courts and Court of Federal Claims, despite our admonition that “repeals by implication are not favored.” Morton v. Mancari, 417 U.S. 535, 549 (1974) (internal quotation marks omitted). But the implied-repeal doctrine is not applicable here, for when Congress passed Sec. 6404(h), Sec. 6404(e)(1) had been interpreted not to provide any right of review for taxpayers. There is thus no indication of any “language on the statute books that [Congress] wishe[d] to change,” United States v. Fausto, 484 U.S. 439, 453 (1988), implicitly or explicitly. Congress simply prescribed a limited form of review where none had previously been found to exist.

Second, the Hincks assert that vesting jurisdiction over Sec. 6404(e)(1) abatement decisions exclusively in the Tax Court runs contrary to the “entire structure of tax controversy jurisdiction,” Brief for Petitioners 30, under which the Tax Court generally hears prepayment challenges to tax liability, see Sec. 6213(a), while postpayment actions are brought in the district courts or Court of Federal Claims. In a related vein, the Hincks point out that the Government’s position would force taxpayers seeking postpayment review of their tax liabilities to separate their Sec. 6404(e)(1) abatement claims from their refund claims and bring each in a different court. Even assuming, arguendo, that we were inclined to depart from the face of the statute, these arguments are undercut on two fronts. To begin with, by expressly granting to the Tax Court some jurisdiction over Sec. 6404(e)(1) decisions, Congress has already broken with the general scheme the Hincks identify. No one doubts that an action seeking review of a Sec. 6404(e)(1) determination may be maintained in the Tax Court even if the interest has already been paid, see, e.g., Dadian v. Commissioner, 87 TCM 1344 (2004), ¶2004-121 RIA Memo TC, p. 790-2004; Miller v. Commissioner, 79 TCM 2213 (2000), ¶2000-195 RIA Memo TC, p. 1120-2000, aff’d, 310 F.3d 640 (CA9 2002), and the Hincks point to no case where the Tax Court has refused to exercise jurisdiction under such circumstances.

In addition, an interest abatement claim under Sec. 6404(e)(1) involves no questions of substantive tax law, but rather is premised on issues of bureaucratic administration (whether, for example, there was “error or delay” in the performance of a “ministerial” act, Sec. 6404(e)(1)(A)). Judicial review of decisions not to abate requires an evaluation of the internal processes of the IRS, not the underlying tax liability of the taxpayer. We find nothing tellingly awkward about channeling such discrete and specialized questions of administrative operations to one particular court, even if in some respects it “may not appear to be efficient” as a policy matter to separate refund and interest abatement claims. 446 F.3d at 1316.^[2]

Last, the Hincks contend that Congress would not have intended to vest jurisdiction exclusively in the Tax Court, because it would lead to the “unreasonable” result that taxpayers with net worths greater than $2 million (for individuals) or $7 million (for businesses) would be foreclosed from seeking judicial review of Sec. 6404(e)(1) refusals to abate. Brief for Petitioners 46; see also Beall, 336 F.3d at 430. But we agree with the Federal Circuit that this outcome “was contemplated by Congress.” 446 F.3d at 1316. The net-worth limitation in Sec. 6404(h) reflects Congress’s judgment that wealthier taxpayers are more likely to be able to pay a deficiency before contesting it, thereby avoiding accrual of interest during their administrative and legal challenges. In contrast, taxpayers with comparatively fewer resources are more likely to contest their assessed deficiency before first paying it, thus exposing themselves to interest charges if their challenge is ultimately unsuccessful. There is nothing “unreasonable” about Congress’s decision to grant the possibility of judicial relief only to those taxpayers most likely to be in need of it.^[3]

The judgment of the United States Court of Appeals for the Federal Circuit is affirmed.

The “old-law” contribution and benefit base for 2008 is $75,900. This is the base that would have been effective under the Act without the enactment of the 1977 amendments.

The “old-law” contribution and benefit base is used by:

(a) The Railroad Retirement program to determine certain tax liabilities and tier II benefits payable under that program to supplement the tier I payments which correspond to basic Social Security benefits,

(b) the Pension Benefit Guaranty Corporation to determine the maximum amount of pension guaranteed under the Employee Retirement Income Security Act (as stated in section 230(d) of the Social Security Act),

(c) Social Security to determine a year of coverage in computing the special minimum benefit, as described earlier, and

(c) Social Security to determine a year of coverage (acquired whenever earnings equal or exceed 25 percent of the “old-law” base for this purpose only) in computing benefits for persons who are also eligible to receive pensions based on employment not covered under section 210 of the Act.

The minimum amount a domestic worker must earn so that such earnings are covered under Social Security or Medicare is the domestic employee coverage threshold. For 2008, this threshold is $1,600. Section 3121(x) of the Internal Revenue Code provides the formula for increasing the threshold.

Under the formula, the domestic employee coverage threshold amount for 2008 shall be equal to the 1995 amount of $1,000 multiplied by the ratio of the national average wage index for 2006 to that for 1993. If the resulting amount is not a multiple of $100, it shall be rounded to the next lower multiple of $100.

Multiplying the 1995 domestic employee coverage threshold amount ($1,000) by the ratio of the national average wage index for 2006 ($38,651.41) to that for 1993 ($23,132.67) produces the amount of $1,670.86. We then round this amount to $1,600. Accordingly, the domestic employee coverage threshold amount is $1,600 for 2008.

The Employee Retirement Income Security Act of 1974 (Public Law 93-406) ordered the Secretary of Labor and the Secretary of Treasury to establish a Joint Board for the Enrollment of Actuaries. 29 U.S.C. 1241. The Joint Board shall, by regulation, establish reasonable standards and qualifications for persons performing actuarial services and the Joint Board shall enroll such individuals who, upon application, satisfy such standards and qualifications. 29 U.S.C. 1242(a). The regulations at 20 CFR Part 901, Subpart B address eligibility for enrollment and renewal of enrollment. Pursuant to the Joint Board’s bylaws, the Secretary of the Treasury is to appoint an Executive Director to the Board who has the delegated authority to administer the Board’s enrollment program. The Secretary of the Treasury has delegated these functions to the Internal Revenue Service and the costs of these activities are borne by the Service.

20 CFR 901.11(d)(4) provides for a reasonable non-refundable fee for applications for renewal of enrollment. Form 5434-A, “Application for Renewal of Enrollment” presently states that the renewal fee is $25. Proposed 26 CFR 300.7 and 300.8 establish separate $250 user fees for the enrollment and renewal of enrollment process. These fees represent the IRS’s costs in administering the program, and the $250 fee for renewal of enrollment will supplant the $25 fee.

The IOAA of 1952 (31 U.S.C. 9701) authorizes agencies to prescribe regulations that establish charges for services provided by the agency. The charges must be fair and be based on the costs to the Government, the value of the service to the recipient, the public policy or interest served, and other relevant facts. The IOAA of 1952 provides that regulations implementing user fees are subject to policies prescribed by the President, which are currently set forth in OMB Circular A-25, 58 FR 38142 (July 15, 1993) (the OMB Circular).

The OMB Circular encourages user fees for government-provided services that confer benefits on identifiable recipients over and above those benefits received by the general public. Under the OMB Circular, an agency that seeks to impose a user fee for government-provided services must calculate its full cost of providing those services. In general, a user fee should be set at an amount in order for the agency to recover the cost of providing the special service, unless the Office of Management and Budget grants an exception. Pursuant to the guidelines in the OMB Circular, the IRS has calculated its cost of providing services under the enrolled actuaries program. The IRS has determined that the full cost of administering the enrollment and re-enrollment processes is $250 per enrolled actuary per process.

The proposed user fees will be implemented under the authority of the IOAA of 1952 and the OMB Circular.

These regulations are proposed to apply thirty days after the date of publication in the Federal Register of the final regulations.

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities. Accordingly, a regulatory flexibility analysis is not required. This certification is based on the information that follows. These proposed rules affect enrolled actuaries, of which there are currently 4,600 active. The economic impact of these regulations on any small entity would result from a small entity, including a sole proprietor, being required to pay a fee prescribed by these regulations in order to obtain a particular service. The appropriate NAICS codes for enrolled actuaries relate to Insurance Other (524298) and Administrative and General Management Consulting, Including Financial Consulting (541611). Entities identified under these codes are considered small under the SBA size standards (13 CFR 121.201) if their annual revenue is less than $6.5 million. The IRS estimates that as many as 2,070 enrolled actuaries may be operating as or employed by small entities. Therefore, the IRS has determined that these proposed rules will affect a substantial number of small entities. The dollar amounts of the fees are not, however, substantial enough to have a significant economic impact on any entity subject to the fees. The amounts of the fees are commensurate with, if not less than, the amount charged by professional organizations. Persons who elect to apply for enrollment or renewal of enrollment also receive benefits from obtaining the enrolled actuary designation.Pursuant to section 7805(f) of the Internal Revenue Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact.

Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. The IRS and Treasury Department request comments on the substance of the proposed regulations, as well as on the clarity of the proposed rules and how they can be made easier to understand. All comments will be available for public inspection and copying.

A public hearing has been scheduled for November 26, 2007 at 10:00 a.m. in room 3716. Due to building security procedures, all visitors must present photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the “FOR FURTHER INFORMATION CONTACT” section of this preamble.

The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit electronic or written comments by November 26, 2007 and an outline of the comments to be discussed and the time to be devoted to each topic (signed original and eight (8) copies) by November 19, 2007. A period of ten (10) minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing.

Paragraph 1. The authority citation for part 300 continues to read as follows:

Authority: 31 U.S.C. 9701.

Par. 2. Section 300.0 is amended as follows:

1. Paragraphs (b)(7) and (b)(8) are added.

2. Paragraph (c) is revised.

The additions and revision read as follows:

The correction notice that is the subject of this document is under section 1502 of the Internal Revenue Code.

As published, the notice of proposed rulemaking (REG-107592-00) and withdrawal of proposed regulations (REG-105964-98) contain errors that may prove to be misleading and are in need of clarification.

Accordingly, the publication of proposed rulemaking (REG-107592-00) and withdrawal of proposed regulations (REG-105964-98), which were the subjects of FR Doc. E7-19134, is corrected as follows:

1. On page 55142, column 3, in the preamble, under the paragraph heading “E. Material Tax Benefit Rule”, eleventh line of the third paragraph, the language “a material tax benefit that would not” is corrected to read “a material Federal tax benefit that would not”.

2. On page 55143, column 1, in the preamble, under the paragraph heading “F. Off-Market Issuance Rule”, eleventh line of the second paragraph of the column, the language “tax benefit. In such cases, the” is corrected to read “Federal tax benefit. In such cases, the”.

3. On page 55143, column 1, in the preamble, under the paragraph heading “G. Outbound Transactions”, eighth line of the first paragraph, the language “obligation that became intercompany” is corrected to read “obligation that became an intercompany”.

4. On page 55144, column 1, in the preamble, under the paragraph heading “I. Other Request for Comments”, eleventh line of the first full paragraph of the column, the language “and basis (such as the issuance of note” is corrected to read “and basis (such as the issuance of a note”.

5. On page 55146, column 2, § 1.1502-13(g)(2)(v), second line of the paragraph, the language “of a material net reduction in income or” is corrected to read “of, for Federal tax purposes, a material net reduction in income or”.

6. On page 55146, column 3, § 1.1502-13(g)(3)(i)(B), last line of the paragraph, the language “or (6) of this section apply.” is corrected to read “or (6) of this section apply. The exceptions are as follows.”.

7. On page 55147, column 3, § 1.1502-13(g)(4)(iii), last line of the paragraph, the language “market interest rates.” is corrected to read “market interest rates).”.

8. On page 55149, column 2, § 1.1502-13(g)(7)(ii) Example 2.(vi), sixth line of the paragraph, the language “as selling all of its assets to X, including the” is corrected to read “as selling all of its assets to new S, including the”.

9. On page 55149, column 2, § 1.1502-13(g)(7)(ii) Example 2.(vi), seventeenth line of the paragraph, the language “to X for $70, the amount realized with” is corrected to read “to new S for $70, the amount realized with”.

10. On page 55150, column 3, § 1.1502-13(g)(7)(ii) Example 6.(i), sixth line of the paragraph, the language “repayment of $100 at the end of year 5. The” is corrected to read “repayment of $100 at the end of year 20. The”.

11. On page 55151, column 1, § 1.1502-13(g)(7)(ii) Example 8.(i), third line of the paragraph, the language “from a separate return limitation year (SRLY).” is corrected to read “from a separate return limitation year that is subject to limitation under § 1.1502-21(c) (a SRLY loss).”.

12. On page 55151, column 2, § 1.1502-13(g)(7)(ii) Example 9.(i), third through fourth lines of the paragraph, the language “material loss from a separate return limitation year (SRLY). T’s sole shareholder,” is corrected to read “material SRLY loss. T’s sole shareholder,”.

13. On page 55151, column 3, § 1.1502-13(g)(7)(ii) Example 10.(iii), ninth line of the paragraph, the language “principal amount, and a fair market value of” is corrected to read “principal amount, and fair market value of”.