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.
Report of the Task Force on Judicial Deference, Aba Section of Taxation
As a result of the Supreme Court's decision in United States v. Mead Corporation, 533 U.S. 218 (2001), which emphasized "the great variety of ways in which the laws invest the Government's administrative arms with discretion, and with procedures for exercising it, in giving meaning to Acts of Congress," id. at 235-36, there is a need for an agency-by-agency consideration of the extent to which courts should give deference to administrative pronouncements under the mandate of Chevron v. Natural Resources Defense Council, 467 U.S. 837 (1984). Moreover, there is a particular need to develop a clear set of deference concepts for interpretations of the tax law because of, inter alia: (1) the power and pervasiveness of the IRS, (2) the large number and variety of administrative pronouncements issued by the IRS, and, (3) the Supreme Court's continuing reliance in its tax cases on the traditional test of National Muffler Association v. United States, 440 U.S. 472 (1978), rather than on Chevron. The authors of the Report undertake this task as well as a review of recent case law and make the following recommendations: (1) Federal courts should give Chevron deference to regulations promulgated by the Treasury and the IRS, with (i) legislative tax regulations receiving controlling deference under Chevron so long as they are not arbitrary, capricious, or manifestly contrary to the statute, and (ii) interpretive tax regulations receiving the same controlling deference if they are reasonable under the test of National Muffler, which examines such factors as the extent to which the regulation harmonizes with the plain language, origin, and purpose of the statute; the manner in which the regulation evolved; the length of time the regulation has been in effect; the reliance placed on it; the consistency of interpretation; and the degree of scrutiny Congress has devoted to the regulation; (2) Federal courts should give temporary regulations the same deference as described above, provided that the promulgation of such regulations meets the good cause standards as specified in the Administrative Procedure Act for promulgating regulations without notice and comment; (3) Federal courts should give revenue rulings, certain revenue procedures and certain notices deference under the doctrine of Skidmore v. Swift & Co., 323 U.S. 134 (1944), which directs courts to take into account the agency's experience and its power to persuade, but to retain the ability to choose a better rule even if the agency interpretation is reasonable; and (4) Federal courts should take into account unofficial agency interpretations, such as private letter rulings, technical advice memoranda, and certain litigating positions, only to the extent to which their logic and reasoning appeal to the reviewing court.
Measuring the True Cost of Government Bailout
By all accounts, the variety and scale of government intervention to assist individual businesses and industries, and to provide general economic stimulus during the 2008-2009 economic crisis, was extraordinary. Understandably, taxpayers have been concerned about the cost. A simple tally of dollars authorized or disbursed, of course, is wholly inadequate to accurately assess the costs of various interventions. This Article addresses the challenges of providing reasonable budgetary information with respect to different types of bailout expenditures. In addition to looking at costs for the more obvious bailout programs, the analysis explores the special challenges of cost estimation for other more covert actions, such as special tax breaks or relief from burdensome regulation, that serve a "bailout" function. Another notable feature of recent bailout-related government activity is the fragmentation of intervention efforts, which involved the off-budget Federal Reserve, off-budget government-sponsored enterprises, the Federal Deposit Insurance Corporation, the Treasury Department, and numerous other on-budget agencies. The Article takes issue with some of the methodologies used by the government to value assets obtained in its bailout efforts, and argues that decision making about the appropriate allocation of aggregate resources is hampered when some expenditures are off budget altogether and when even on-budget agencies used different methods of accounting. Adequate and transparent budget accounting for bailout costs requires greater consistency in valuation and accounting methods, and a more unified presentation of aggregate information in the budget with respect to all government bailout-type activities.