Thursday, April 2, 2015
Kristin Hickman (Minnesota) presents Treasury's Retroactivity at Northwestern today as part of its Tax Colloquium Series hosted by Lawrence Zelenak:
In Bowen v. Georgetown University Hospital, the Supreme Court described retroactivity as "not favored in the law" and generally rejected allowing federal administrative agencies to adopt regulations "altering the past legal consequences of past actions." Unlike most regulatory agencies, Treasury and the IRS are expressly authorized by Congress to adopt regulations with precisely such primary retroactive effect. Specifically, IRC § 7805(b) grants Treasury and the IRS the power to backdate tax regulations under a variety of circumstances. Preliminary analysis shows that Treasury and the IRS utilize this authority regularly with little judicial oversight for abuse of discretion. Using empirical data, this article will explore more fully Treasury and IRS utilization of the authority to adopt retroactively effective regulations interpreting the Internal Revenue Code.