In 2004, Congress passed the American Jobs Creation Act (“AJCA”) which repealed the extraterritorial tax exemption for domestic companies. The Act included a two-year phase out of the tax exemption. In 2006 DreamWorks Animation SKG, Inc. (“DreamWorks”) entered into a ten-year international licensing agreement to distribute its animated feature films in markets outside the U.S.
In December 2015, James D. Sullivan filed a pro se complaint in the U.S. Court of Federal Claims, alleging that the IRS wrongly assessed his 2006 income taxes, and unlawfully seized a payment ($45,000) from him under a federal tax lien to satisfy his 2006 tax liability. In his lawsuit, Sullivan sought to recover the $45,000 and to bar the IRS from collecting his 2006 taxes.