Wednesday, January 12, 2011
Mayo does several good things.
First, it clarifies that Chevron provides the analytical standard for judging general authority tax regs under § 7805 (a) (at least those promulgated through the APA notice-and-comment procedures), not just specific authority tax regs. This had been the trend of the law, but was resisted by some (including most Tax Court judges). Mayo ends that debate. [Congratulations to Carlton Smith, whose amicus brief on the issue is addressed, though not followed, by the Mayo opinion.]
Second, relatedly, Marty McMahon, Larry Zelenak, Boris Bittker, I, and others have expressed doubt about the validity or utility of the conventional notion that general authority regs receive less deference than do specific authority regs. The Mayo opinion largely discards that conventional notion.
Third, Mayo quashes the misuse of the National Muffler factors. Some judges had taken the National Muffler factors as swords by which regs could be attacked. This was wrong. Those factors are better understood as being reasons for extra deference when present, not reasons for diminished deference if absent. Mayo accepts the erroneous idea that National Muffler is less deferential than Chevron, and says that Chevron, not National Muffler, provides the standard. Though I don't like the road, I do like the destination -- Mayo means that the National Muffler factors can no longer be misused to undercut regs. In particular, Mayo said that the following are not reasons to withhold deference: the fact that the current position of Treasury/IRS is inconsistent with its earlier position, the fact that the current position is not of long standing and wasn't contemporaneous with the statute, and the fact that the reg is contrary to pre-reg case law.
Fourth, C.J. Roberts' opinion for the Court in Mayo frames the Chevron Step One inquiry (whether the statute is ambiguous) in terms of statutory text and structure. I have more of a textual orientation than many in the tax academy, so I like this emphasis. Those who lean more towards purposivism need not despair, of course. The next time a Chevron opinion is written by a purposivist justice, the Step One discussion will be framed more broadly than it was in Mayo. This is the dynamic one sees comparing the Step One treatments of Justice Stevens writing for the Court in Chevron with Justice Thomas writing for the Court in Brand X. Moreover, nontextualists might take some comfort in the fact that the taxpayer's "dictionary definition" argument persuaded no one on the Court.
- ABA Journal
- Accounting Today
- Chronicle of Higher Education
- The Hill
- Inside Higher Ed
- L.A. Times
- Minneapolist Star Tribune
- Wall Street Journal