Paul L. Caron

Friday, June 3, 2011

Johnson: Deference to Tax Agencies' Interpretation of Their Regs

Tax Analysts Steve R. Johnson (UNLV; moving to Florida State) has published Deference to Tax Agencies' Interpretation of Their Regulations, 60 State Tax Notes 665 (May 31, 2011). Here is the abstract:

This installment closes a loop begun in the last installment of this column.  [Conditional Deference to State Revenue Authorities, 60 State Tax Notes 269 (Apr. 25, 2011)]  We have been exploring the degrees of deference accorded by the courts to interpretations and positions taken by state and local revenue agencies.  [Judicial Deference to State Tax Agencies -- An Overview, 58 State Tax Notes 633 (Nov. 29, 2010); Chevron Deference to State Tax Agencies, 59 State Tax Notes 285 (Jan. 24, 2011); Deference -- Questions of Fact Versus Issues of Law, 59 State Tax Notes 883 (Mar. 21, 2011)]  The last installment examined conditional deference doctrines, that is, deference specific to particular situations or conditioned on the existence of particular conditions. That installment noted one line of conditional deference, applying to cases in which agencies are interpreting their own regulations. This is often called Auer deference, after one of the most prominent cases of the line.  [Auer v. Robbins, 519 U.S. 452 (1997)]  Because of the richness of the Auer line of cases, we deferred exploration of it to this installment.

Part I below describes Auer deference generally, considering both federal and state cases. Part II evaluates the rationales for the doctrine and the criticisms that have been leveled at it. In state and local tax cases, Auer deference will almost always be asserted by the government revenue authority. Thus Part III identifies arguments by which taxpayers may attempt to defuse assertions of Auer deference.

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