Wednesday, August 25, 2010
This report argues that the tax community cannot safely ignore general principles of administrative law. This fact is illustrated by the Intermountain case recently decided by the Tax Court en banc and on appeal to the D.C. Circuit. In that case, the Tax Court invalidated a temporary regulation that includes basis overstatements within the six-year statute of limitations of §§ 6501(e) and 6229(c).
This report explores important issues of administrative law raised by Intermountain. It argues that the tax community should discard the conventional—but wrong — tendency to call specific-authority regulations ‘‘legislative regulations’’ and general-authority regulations ‘‘interpretive regulations.’’ Many general authority regulations, including those at issue in Intermountain, are legislative regulations. The conventional misidentification is worse than sloppy. It is pernicious because it distorts analysis of whether tax regulations are valid. The report also discusses Chevron, Brand X, and notice-and-comment issues.
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