TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, March 14, 2011

Harvard Law Review on Intermountain

Federal Tax Court Holds Pre-Chevron Judicial Construction of Statute Precludes Subsequent Agency Interpretation if Prior Construction Was Premised on Legislative History. — Intermountain Insurance Service of Vail, LLC v. Commissioner, No. 25868-06, 2010 WL 1838297 (T.C. May 6, 2010), 124 Harv. L. Rev. 1066 (2011):

Recently, in Intermountain Insurance Service of Vail, LLC v. Commissioner, [134 T.C. No 11 (May 6, 2010)]  the United States Tax Court applied Brand X to strike down an agency’s proposed statutory interpretation because that interpretation conflicted with judicial precedent. Intermountain framed important questions for future courts of appeals regarding the application of Brand X to pre-Chevron Supreme Court decisions. Intermountain’s approach to the Brand X inquiry, however, was seriously flawed. Instead of focusing its analysis on the holding of the prior court at issue, Intermountain considered what the court would have held had it decided the case after Chevron was handed down. In so doing, Intermountain ignored the specific mandate of Brand X, created an unpredictable framework for judicial review, and granted too much deference to judicial precedent. In place of its flawed approach, Intermountain should have considered whether the holding of the prior case necessarily relied on a finding of unambiguous statutory meaning. Such an inquiry would have focused on the prior court’s actual holding, as Brand X intended.

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