Whether the Supreme Court should overturn an agency regulation interpreting Section 170 of the Internal Revenue Code that limits charitable tax deductions based on state and local tax incentives, in light of the Court's recent rejection of Chevron deference

No question identified. : The Second Circuit entered judgment on August 13, 2025. Unless extended, the time to file a petition for a writ of certiorari will expire on November 11, 2025. The jurisdiction of this Court will be invoked under 28 U.S.C. § 1254(1). Copies of the lower court’s opinion and its order entering judgment are attached as Exhibits A and B, respectively. 1. From its 1954 codification until June of 2019, donors were not required to reduce their Section 170 deductions by any amount of federal, state, or local tax incentives. The courts agreed—including the Supreme Court—as did Congress, Treasury, and the IRS. Relying upon well settled case law, the fact that Section 170 had been amended myriad times without relevant change, and the presence of over 100 similar state programs that had been established across the country, Village of Scarsdale enacted its charitable gifts reserve fund and authorized a related real property tax credit for taxpayers contributing to the fund. Any owner of real property located within Scarsdale who makes an unrestricted charitable monetary contribution to the Scarsdale Fund may claim a credit against their Scarsdale property tax equal to 95 percent of the donation to the Scarsdale Fund. The remaining five percent of the contribution, no matter how large in amount, remains freely available for Scarsdale to use. As an example, a Scarsdale resident who owes $10,000 in Scarsdale property tax and contributes $10,000 to the Scarsdale Fund will end up paying $10,500 to Scarsdale ($10,000 in charitable contributions to the Scarsdale Fund plus $500 in property taxes after accounting for property tax credits). The additional $500 represents more revenue to Scarsdale that it can use to provide public services to its residents. Residents who made a charitable contribution to the Scarsdale Fund in 2018 were entitled to a $10,000 federal charitable deduction under Section 170. 26 U.S.C. § 170(a), (c)(1). This federal charitable deduction could potentially reduce the resident’s taxable income and resulting federal tax burden. In 2018, the Scarsdale Fund received over $500,000 in charitable contributions. As a result, Scarsdale collected additional revenue of $25,000 that it would not have collected absent the Fund. 2. The IRS, however, disliked how contributions to Scarsdale’s fund, as well as contributions to other similar state and municipal funds, interacted with a 2017 revision to a completely different, recently-amended provision of the Internal Revenue Code—Section 164. Anticipating litigation, the IRS proposed and then finalized a fighting regulation—the 2019 Final Rule—purporting to interpret Section 170 as denying a deduction attributable to certain, but not all, tax benefits that a donor may receive, notwithstanding that Congress made no relevant changes to Section 170 when it amended Section 164. The IRS did so hoping that courts could be persuaded of some “ambiguity” in Section 170 that would require judicial deference to the IRS’s new interpretation under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Scarsdale challenged the 2019 Final Rule under the Administrative Procedure Act (“APA”), arguing that the regulation finalized by the IRS was contrary to Section 170 and arbitrary and capricious. The district court relied on Chevron to find that the 2019 Final Rule was valid. But Chevron has been overruled, and judicial deference to agency interpretations of statutes, a “judicial invention that required judges to disregard their statutory duties|[,]” is no longer the law. Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244, 2249 (2024) (overruling Chevron); see also id. at 2261 (holding that “agency interpretations of statutes—like agency interpretations of the Constitution— are not entitled to deference.”) (emphasis in original). Instead, “in an agency case as in any other . . . even if some judges might (or might not) consider the statute ambiguou