THE IMPACT OF AGENCY PROCEDURES AND JUDICIAL REVIEW ON TAX REFORM
This paper discusses hurdles that the IRS and Treasury would face following tax reform in their efforts to respond quickly with guidance that courts will uphold. These hurdles include the impact of the Tax Anti-Injunction Act and the Declaratory Relief Act, heightened interest in the course of tax litigation regarding compliance by the IRS and Treasury with the Administrative Procedure Act, and provisions enacted in 1988 and 1996 limiting temporary and retroactive regulations. The paper then outlines several approaches Congress could consider to mitigate possible untoward consequences.
Of Gift Horses and Great Expectations: Remands without Vacatur in Administrative Law
Administrative law has been shaped over the years by fundamentally practical considerations. Displacement of agency decisions by courts was rare; yet, the omnipresent threat of substantial judicial intrusion surely affected agency decisions. While the Administrative Procedure Act, adopted nearly 60 years ago, provides a comprehensive template for federal agency decisionmaking, what is striking about the APA is how much is left out and how much is left to the discretion of both agencies in implementing regulatory decisions and to the courts in superintending agency action. Given this history, it is hardly surprising that many doctrinal techniques represent the pragmatic effort of courts to shape agency decisionmaking through deliberate use of doctrine. One excellent example of this effort is the device of remand without vacatur. Remand without vacatur is a mechanism by which courts remand back to an agency a decision in circumstances in which the court believes the agency rationale is flawed, yet declines to vacate the agency decision. Thus, the agency decision stands during the period in which the agency scrambles to develop a rationale for the rule that will survive judicial scrutiny. The court retains all the power it has to vacate the rule eventually; however, it holds its fire while the agency goes back to the drawing board. Leading administrative law scholars have embraced this device as an eminently practical compromise arguing that the remand without vacatur devices strike the right balance between aggressive review and administrative discretion. My claim in this essay, however, is that this view misconstrues the complex relationship between courts and agencies. While the remand without vacatur device appears to limit the scope of judicial scrutiny, the conclusion that it results in an optimal state of the world in which judicial review is neither too hot, nor too cold, but just right, is naive. Remand without vacatur does not exist in an administrative law vacuum. Courts carry out their role as judicial police officers in the shadow of the remedial strategies that are available to them as they conduct their activities. The judicially created strategy of remand without vacatur should be disfavored precisely because it facilitates the use of more aggressive judicial scrutiny of agencies' reasoning process. The rationale offered by leading commentators for the device is that it promotes agency flexibility - this is the heart of the argument, that it reduces agency ossification. My argument, however, is that it may do quite the opposite. By adding to the flexibility of judicial review, it promotes judicial activism. It does so, more specifically, by empowering the courts to intervene, rather than hold back, in the agency decisionmaking process. While it is fair to suggest that agencies may prefer remand without vacatur to the more apocalyptic step of simple vacatur, the choice between the two is truly an illusive one. What we want to know is how this practical strategy interacts with the central issue of judicial intervention.
'Civil'Izing Tax Procedure: Applying General Federal Learning to Statutory Notices of Deficiency
Tax procedure has been rather isolated from the main currents of civil procedure. Using the statutory notice of deficiency as an exemplar, the article explores how viewing tax procedure issues from the perspective of general civil litigation can facilitate procedural regularity and foster fairness to United States Tax Court contestants. The statutory notice is the document by which the IRS forewarns a taxpayer of impending assessment of tax greater than the amount reported on the taxpayer's return. The article identifies three functions of the notice and their general civil litigation analogues. First, like legal process, it provides the taxpayer with notice and an opportunity to be heard. Second, a valid statutory notice is a prerequisite to Tax Court subject matter jurisdiction. Third, like a complaint in general civil litigation, the notice helps to frame the issues and allocate the burden of proof. Taxpayers' challenges to defective statutory notices are generally framed as notions to dismiss for lack of subject matter jurisdiction on the ground that the notice is invalid. The taxpayer's incentive to make this motion is that only a valid notice tolls the statute of limitations on assessment; accordingly, on dismissal, the statue often will have expired, freeing the taxpayer from liability. The article recommends that the Tax Court borrow the learning of Bell v. Hood, that is, distinguish between allegations adequate to invoke subject matter jurisdiction and the additional requisites for pleading a cognizable claim. By doing so, the Tax Court could distinguish jurisdictional invalidity from other defects, and in turn apply remedies more appropriately geared to the several functions of the statutory notice.