Wednesday, November 20, 2013
Richard J. Pierce Jr. (George Washington), Who Should Determine Whether an Agency's Explanation of a Tax Rule is Adequate?, 63 Duke L.J. ___ (2014):
This essay is Professor Pierce’s contribution to the annual Duke Law Journal symposium on administrative law. The topic of this year’s symposium is "Taking Administrative Law to Tax." The other participants in the symposium make three main points: (1) IRS and Treasury have long engaged in practices that are inconsistent with the APA, specifically including issuance of legislative rules without complying with the notice and comment procedure described in APA section 553; (2) courts should require IRS and Treasury to comply with the APA; and, (3) several opinions issued by the Supreme Court in recent years suggest that courts are prepared to require IRS and Treasury to comply with the APA when they issue tax rules.
Professor Pierce agrees with the other participants on all three of those points. He parts company with the other participants on one important question, however. He argues that courts should not require IRS and Treasury to comply with APA section 553 as that section has been interpreted by courts. He describes the many ways in which courts have dramatically expanded the requirements of APA section 553. He argues that courts should not be encouraged to apply the judicial version of APA section 553, as opposed to the original version Congress contemplated, to tax rules because to do so would so "interrupt the flow of revenues as to jeopardize the nation’s fiscal stability" in violation of the Anti-Injunction Act. Professor Pierce argues that the courts should continue to refuse to allow pre-enforcement review of tax rules to discourage courts from applying the unduly demanding judicial version of APA section 553 to tax rules.