Saturday, July 21, 2012
Patrick J. Smith (Ivins, Phillips & Barker, Washington, D.C.), The APA's Arbitrary and Capricious Standard and IRS Regulations, 136 Tax Notes 271 (July 16, 2012):
The Supreme Court’s Mayo decision and the D.C. Circuit’s Cohen decision have made clear that principles of administrative law generally, and the Administrative Procedure Act (APA) in particular, apply to tax law and the IRS just as they do to all other federal agencies. The APA’s arbitrary and capricious standard provides a powerful but seldom-used tool for taxpayers in challenging IRS regulations, because the IRS seems unaware of the requirements imposed by the standard and even instructs its personnel to draft preambles to regulations in a way that is inconsistent with what thestandard requires.
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