Paul L. Caron

Wednesday, May 26, 2021

Taxpayer Deference Can Help Close The Tax Gap

Benjamin M. Willis, Taxpayer Deference Can Help Close the Tax Gap, 171 Tax Notes Fed. 1229 (May 24, 2021):

Tax Notes Federal (2020)[C]losing the tax gap would be better achieved if Treasury and the IRS stopped relying on Chevron deference to create overly aggressive revenue-raising laws and appreciate why courts are favoring taxpayer interpretations. ...

The very nature of attempts to close the tax gap will dramatically increase litigation. The IRS Independent Appeals Office, created in 2019, reflects a recognition of the need to reduce the unnecessary costs of litigation resulting from a biased IRS.

Treasury and IRS attempts to increase tax revenue through dependence on Chevron deference to support overly aggressive interpretations will continue to waste valuable resources through court losses and diminished public trust. Taxpayers deserve protection from IRS overreach. Successfully closing the tax gap will require the IRS to appreciate that taxpayers are rightfully afforded deference to use congressionally intended benefits.

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