There are a few important issues at the intersection of tax procedure and administrative law that the court will address. For example, is the Notice a legislative rule under the APA, and if it is, do the regulations that allow the IRS to define reportable transaction through other IRB guidance satisfy the notice and comment requirements? (For brief background, see my post here.)
There is another issue that has received less attention in the tax community lurking in the CIC Services case. That issue pertains to the nature of the relief that a court can grant when it finds that the IRS (or another agency) has failed to comply with the procedural requirements under the APA. That gets to the scope of an injunction that a court may issue if it finds that CIC Services is correct on the merits.
The IRS in the briefing following the remand has argued that if CIC Services prevails on getting the court to issue an injunction, any injunction should be limited to CIC Services and not have universal application. CIC Services, however, has argued for a broader sweep, and has asked that the court set aside the Notice not only for it specifically, but for everyone.
This an issue that is hot among some administrative law scholars. I flagged the issue in a post earlier this summer. In that post I discussed the terrific Notice & Comment blog post, Do you C what I C? – CIC Services v. IRS and Remedies Under the APA. In the post Associate Dean and Professor Milah Sohoni of the University of San Diego Law School provides context on the debate within administrative law and argues that a district court has the power to set aside the Notice for everyone and should not be constrained to focus only on the application of the Notice to the plaintiff.
Essentially Professor Sohoni notes that the Supreme Court in CIC Services views the request for injunctive relief and the request to set aside the Notice as two sides of the same coin. Professor Sohoni has written more extensively on the broader topic remedy of universal vacatur in APA challenges. See, for example, a 2020 George Washington Law Review article, The Power to Vacate a Rule.
As the briefing on the preliminary injunction has concluded, the court is likely to issue an order soon.