41829-adm_71-4 Sheet No. 7 Side A 12/06/2019 13:58:53 * 11/26/19 11:33 AM ** REENSTEIN VIEW K. G )_ME RE ELETE Weekly SSRN Article Review and Roundup: Hold- Weekly D ICHARD OT 663 N R O Tax: Different Not Exceptional, https://tax Tax: Different Not (D DOCX 2. “Tax law is law unto itself.” “Tax law is law unto BREU AND ARTICLES , Hayes Holderness, ME REVIEW ME LOG G. A _ B LICE A AXPROF ABREU GREENSTEIN ABREU TAX: DIFFERENT, NOT EXCEPTIONAL NOT EXCEPTIONAL TAX: DIFFERENT, United States v. Henderson Clay Prods., 324 F.2d 7, 12 (5th Cir. 1963). Prods., 324 F.2d 7, 12 (5th Cir. 1963). United States v. Henderson Clay Alice G. Abreu and Richard K. Greenstein are Professors of Law at Temple University’s are Professors of Law at Temple Alice G. Abreu and Richard K. Greenstein 71.4_ Even though the Supreme Court seemed to kill tax exceptionalism in its 2011 decision Even though the Supreme Court seemed to Tax is different from other fields of law, just as any field of law is different from other fields of law, just as any field of Tax is different from ** * M K others. But tax scholarship, judicial opinions in tax litigation, and public attitudes toward judicial opinions in tax litigation, and others. But tax scholarship, in doctrinal details. They have claimed taxation have long claimed more than difference of law—that it is unique. Some scholars that tax is different in kind from other fields “the legal system” and “the tax system.” have gone so far as to distinguish between & Research v. United States, claims of tax in Mayo Foundation for Medical Education excep- this article we take on the concept of tax exceptionalism have hardly abated. In that scholars, judges, and taxpayers experience tionalism directly. We begin by accepting but we then tackle the question whether these tax as different from other fields of law, Our view is that they do not, and we believe differences add up to tax exceptionalism. for identifying just what is mistaken aboutthat pragmatism provides a useful framework claims of tax exceptionalism. ALR prof.typepad.com/taxprof_blog/2019/05/weekly-ssrn-tax-article-review-and-roundup- raising issues which we have holderness-reviews-abreu-greensteins-tax-different-not-ex.html, tried to respond to in the published paper. Members of the Temple Law Library staff pro- pro- vided timely and valuable research assistance, and the Temple Summer Research Fund omissions, and deficiencies remain ours. vided financial support for this project. All errors, erness Reviews Abreu & Greenstein’s erness Reviews Abreu & Beasley School of Law. We want to thank the participants in the Tax Law and Interpretation want to thank the participants in the Tax Law and Interpretation Beasley School of Law. We Southeastern Association of Law Schools, held at the August 2018 meeting of the Workshop for thoughtful com- and Andy Weiner, Monroe, as well as our colleagues Jane Baron, Andy Hayes Holderness, who reviewed a draft of this to are also grateful ments on prior drafts. We piece in the T C Y 41829-adm_71-4 Sheet No. 7 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 7 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 7 Side B 12/06/2019 13:58:53


















M K C Y [71:4 [71:4 EVIEW ) 11/26/19) 11:33 AM R AW ELETE L D OT N O (D DOCX 2. DMINISTRATIVE DMINISTRATIVE A ME REVIEW ME _ The Structural Argument for 696 ...... The Case against Hyper-Clarity The Failure to Internalize Tax Norms ...... 680 ...... The Failure to Internalize Tax Norms 682 ...... Cognitive Biases—Magnifying the Differences 683 .... the Tax System The Pervasiveness of Encounters with The Normative Argument for Exceptional ...... 697 ...... Exceptional






Hyper-Clarity: Complexity ...... 693 ...... Complexity Hyper-Clarity: Hyper-Clarity: Legitimacy ...... 691 ...... Legitimacy Hyper-Clarity: 2. 3. 697 ...... Tax is Different 697 ...... The Sorites Paradox 700 ...... The Jamesian Pragmatist Reframing Early Exceptionalism ...... 672 ...... Early Exceptionalism 674 ...... The Ascendency of Economists from Other Fields of Why Tax Feels Extraordinarily Different 679 Law ...... 1. 2. 3. 686 ...... Tax and Social Policy 689 ...... The Demand for Hyper-Clarity 1.







C. A. B. A. B. C. A. B. ABREU GREENSTEIN ABREU 71.4_ In prior work we have claimed that In prior work we have of has had the insidious effect tax exceptionalism From a pragmatist perspective, the question is whether it is useful to believe that the to believe is useful whether it is the question perspective, a pragmatist From III.Different 703 ...... IV.Is Tax Exceptionalism Useful? I.Sources of Tax Exceptionalism ...... 672 ...... I.Sources of Tax Exceptionalism 685 ...... II.Is Tax Really Exceptional? 664 ALR accumulation of the various differences between tax and other fields of law makes tax and other fields of between tax of the various differences accumulation to characterize that it is not useful and demonstrate different. We conclude fundamentally fields of law can tax and other the differences between questions about tax as exceptional; there is some- then deciding whether a specific issue and by focusing on be fully answered in tax. That is be treated differently particular issue to tax that requires that thing about tax as different in kind Court did in Mayo. Rather than treat precisely what the Supreme before it as it would any the Mayo Court treated the tax issue from other fields of law, of tax exceptionalism. field, thereby rejecting the very premise other issue in any other from other fields of law, a robust tax jurisprudence by insulating tax stunting the growth of to those other fields, un- that tax can learn from careful attention disparaging the lessons contributing to the relative of tax administration, and perhaps even dermining the legitimacy light of the persistence In tax bar. But here our focus is different. lack of diversity in the by the salience of theexceptionalism, which we believe is fueled of the concept of tax dif- of those differences and other fields of law, we tackle the significance ferences between tax their existence; rather, we show that despite directly. We do not minimize them or deny not lead to the conclusion that tax is excep- their existence and their number, they should is analytically empty. It is useless. tional because the concept of tax exceptionalism Introduction ...... 665 41829-adm_71-4 Sheet No. 7 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 7 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 8 Side A 12/06/2019 13:58:53



. , 1 and EV Tax AXES . 1153, King .L.R EV Joshua D. , 67 T See As former former As Reexamining the 2 .L.R OLUM L.J. 1897, 1901 . 517, 537 (1994) EV ARV UKE R , 95 C AX , 57 H 63 D .T 665 665 A ,13V Some scholars have gone so 3 in Tax: From the Early Days to . 637, 637 (1996); Paul L. Caron, ) 11/26/19) 11:33 AM XCEPTIONAL EV E ELETE D OT .L.R Chevron OT T ,N N S O (D HIO Paint-by-Numbers Tax Lawmaking NTRODUCTION I DOCX The Need for a Court of Tax Appeals IFFERENT 2. , 57 O . In terms of doctrine and animating values, tax is . In terms of doctrine ? Tax Myopia Meets Tax Hyperopia: The Unproven Case of Increased Tax Hyperopia: The Unproven Case Meets Tax Myopia ]. :D AX Maybe Just a Little Bit Special, After All? Maybe T The Rise and Fall of . 19, 20 (2015). ME REVIEW ME different EV _ exceptional Tax Myopia Michael Graetz, Michael .L.R . 155, 158 (1996). Because of the ways tax is perceived to be different from . 155, 158 (1996). Because of the ways tax is perceived to be different from See EPP EV Paul L. Caron, Judicial Examples ...... 703 ...... Examples Judicial 706 ...... Examples Scholarly Erwin N. Griswold, R The Psychology of Taxes: Why They Drive Us Crazy and How We Can Make Them Sane

See AX A. B. ABREU GREENSTEIN ABREU see also .T , 2015 P A 71.4_ 3. C. Lubick, Hickman & Donald Bradford L. Ferguson, Frederic W. 2. Zelenak, Lawrence 1. Steve R. Johnson, Is tax exceptional? Is tax exceptional? Of course, tax is Tax exceptionalism has been described as “the view that tax is unique” has been described as “the view Tax exceptionalism M K Myopia, or Mamas Don’t Let Your Babies Grow to be Tax Lawyers or Mamas Myopia, (2014); Judicial Deference to Revenue Ruling 1153 (1944). [hereinafter Caron, of the Process in Light of the Changing Realities Nature and Role of Tax Legislative History 609, 612 (1995) (providing examples of this “increased reliance on distributional tables and 609, 612 (1995) (providing examples of this in tax legislation,” such as enacting factors revenue estimates as outcome-determinative taxpayers in 1993 for the sole purpose “sizeable penalties on marriage . . . for high-income of revenue and distributional targets”). Another to a specific combination of conforming new tax laws. accompanies difference is the backlash that inevitably major Rosenberg, 16 V 2019] 715 ...... Tax is Law Conclusion: 718 ...... A Appendix ALR Treasury officials have put it: “Federal tax statutes and the legislative process Treasury officials have put it: “Federal legislation in such degree that the dif- that produces them differ from other in kind.”ference is tantamount to a difference 804, 806 (1989). Among the ways in which the process for enacting tax legislation differs 804, 806 (1989). Among the ways in which importancefrom other types of legislation is the role and of revenue estimates and distribu- expected effects of specific pieces of proposed tional tables, which provide analysis of the tax legislation. Beyond other fields of law, some commentators have advocated for a specific National Court of Tax other fields of law, some commentators have advocated for a specific National Court Appeals. and “the notion that tax law is somehow deeply different from other law, tax law is somehow deeply different and “the notion that the across many of the rules that apply trans-substantively with the result that should not, apply to tax.” rest of the legal landscape do not, or different from, say, contract law, tort law, property law, or criminal law, as contract law, tort law, property law, different from, say, securities law, and so regulatory law—environmental law, well as from other forth. But is tax C Y 41829-adm_71-4 Sheet No. 8 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 8 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 8 Side B 12/06/2019 13:58:53 . M K f. C Y AW ,11 , 96 L Redis- AX 4 , 69 T Defining Income . 148 (2017) (distin- EV . 365, 367 (1998) (dis- R . 157, 176–78 (2003); c EV Reinventing Tax Scholarship: EV AX It’s Not a Rule: A Better Way to It’s Not a Rule: A Better Way .T L. R L. R [71:4 [71:4 LA AX , 21 F EVIEW ORNELL Rebranding Tax / Increasing Diversity undermining the legitimacy of the legitimacy undermining ) 11/26/19) 11:33 AM R 6 , 56 T AW . 101 (2012), in which we responded to one . 101 (2012), in which we responded to one . 183 (1996) (arguing principles of civil pro- ELETE 83 C L D EV EV The Rule of Law as the Law of Standards: Interpreting The Rule of Law as the Law of Standards: Interpreting R OT Michael A. Livingston, 53 (2015), http://dlj.law.duke.edu/2015/01/the- 53 (2015), http://dlj.law.duke.edu/2015/01/the- N L. R disparaging the lessons that tax can learn the lessons that disparaging AX O cf. 5 Why the Legal System Is Less Efficient than the Income Tax in the Legal Why (D .T NLINE AVIS . 667, 667 (1994); Kyle Logue & Ronen Avraham, . 667, 667 (1994); Kyle LA “Civil”izing Tax Procedure: Applying General Federal Learning to “Civil”izing Tax Procedure: Applying General Federal D DOCX 2. TUD L.J. O S DMINISTRATIVE DMINISTRATIVE , 13 F A Tax exceptionalism is therefore a way of conceiving is therefore a way of conceiving Tax exceptionalism UKE 8 EGAL , 30 U.C. L ME REVIEW ME and perhaps even contributing to the relative lack of di- contributing to the relative lack of and perhaps even _ 7 , 64 D , 23 J. . 1 (2018). Because data is available that show members of racial and ethnic . 1 (2018). Because data is available that . 295 (2011), in which we argued that exceptionalist thinking had resulted in wide . 295 (2011), in which we argued that exceptionalist , Leandra Lederman, The Global Marketplace for Tax and Legal Rules The Global Marketplace EV EV Tax as Everylaw: Interpretation, Enforcement, and the Legitimacy of the IRS Tax as Everylaw: Interpretation, Enforcement, and Alice G. Abreu & Richard K. Greenstein, R L. R ABREU GREENSTEIN ABREU AX .See . e.g. See, .T 71.4_ 7. In 8 But if that distinction is correct, then tax is not law at all. And as we have law at all. And then tax is not distinction is correct, But if that 4. Kaplow & Steven Shavell, Louis 5. this claim in a series of articles, beginning with have developed We 6 ENVER LA D cussing the isolation of tax). noted scholar’s attempts to resolve persistent puzzles in the tax law; we showed that simply noted scholar’s attempts income as a standard had immediate explicatory moving to an interpretation of the concept of in make the point more generally power. We the Internal Revenue Code acceptance of the unexamined assumption that all tax provisions are to be interpreted as rules. that all tax provisions assumption acceptance of the unexamined to a variety of interpretive options, including the Abandoning tax exceptionalism opens tax of in- posited that the concept tax concepts as standards. We possibility of interpreting some showed that doing so resolves puzzles that have come should be interpreted as a standard and underscored that point in bedeviled tax scholars for decades. We Understand the Definition of Income cedure should be used in tax procedure); Tsilly Dagan, 493 (2016), con- we showed that stubborn adherence to the concept of tax exceptionalism the very legitimacy of the Internal Revenue Ser- strained tax administration and threatened vice (IRS) because it prevented it from being transparent about the reasons for some actions exercising en- it was simply it took, including its reluctance to acknowledge that sometimes forcement discretion, like any other law enforcement agency. argued in previous scholarship, conceiving of tax as not law can have the of tax as not law conceiving previous scholarship, argued in by insu- tax jurisprudence the growth of a robust effect of stunting insidious of law, from other fields lating tax 666 “tax.” rules” from “legal and “legal system” the to distinguish far as ALR minorities are more likely to claim that they are interested in the law as a way of improving minorities are more likely to claim that they are interested in the law as a way of improving society or doing socially responsible it could be that the normative work, view of tax as a field from careful attention to those other fields, attention to those from careful Redistributing Income guishing between “tax” and “legal rules” in the title,guishing between “tax” that tax rules exist outside thus suggesting of legal rules). treats tax rules as a type although the article itself the sphere of legal rules, tax administration, versity in the tax bar. rule-of-law-as-a-law-of-standards-interpreting-the-internal-revenue-code/. Lawyers, Economists and the role of the Legal Academy, tributing Optimally: Of Tax Rules, Legal Rules, and Insurance tributing Optimally: Of Tax F Statutory Notices of Deficiency 41829-adm_71-4 Sheet No. 8 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 8 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 9 Side A 12/06/2019 13:58:53 In was supra Mayo 14 Court Mayo Dorsey, 63 (2011). Mayo see Tax Exceptionalism: Roger Dorsey, Mayo The applied a “multifactor 12 TRATEGIES . But, again, the ques- But, again, S 667 667 see also 11 AX Year in Review: Tax Law’s Vanity reflected the view that the de- Appendix A for an example of .T See Mayo RAC decision seemed to kill tax ex- decision seemed to 26 (2012); National Muffler ) 11/26/19) 11:33 AM XCEPTIONAL E . . . call for different analyses of an ambig- , 87 P ELETE Mayo AVEAT D OT C Court explicitly rejected the Court of Appeals’ Court explicitly rejected the Court of Appeals’ OT ,N , Jeremiah Coder, , Jeremiah Chevron N O Mayo step two, under which we may not disturb an agency step two, under which we may not disturb an The The (D as well as taxpayers. as well as EFORM and 13 10 See, e.g. , 562 U.S. at 57. DOCX IFFERENT Chevron 35 (2012); Gene Magidenko, Comment, 35 (2012); Gene Magidenko, 2. . J.L. R Muffler :D ] Mayo AX ICH OTES . T M N ME REVIEW ME _ National AX 562 U.S. at 54, the , 45 U. Court applied “ 562 U.S. at 53, to determine the reasonableness of a Treasury regulation. of a Treasury regulation. 562 U.S. at 53, to determine the reasonableness Section IV.B. Section I.C. 9 , 134 T Mayo, Mayo, National Muffler Mayo Mayo Mayo, Mayo, ABREU GREENSTEIN ABREU . See infra . See infra 562Inc. v. Pfennig, 541 U.S. 232, 242 (2004) U.S. at 53 (citing Household Credit Servs., 71.4_ 14. on tax exceptionalism that followed nature of the discourse The terminal 12. following 562 U.S. 44, 55 (2011). Commentary 10 11 9. used to characterize taxation generally, we Although tax exceptionalism is a concept To be sure, many individuals experience tax as different from other fields as different from experience tax many individuals To be sure, 13. that “[ Noting M K rule unless it is ‘arbitrary or capricious in substance, or manifestly contrary to the statute.’” or manifestly contrary to the statute.’” rule unless it is ‘arbitrary or capricious in substance, Mayo, Mirror Shattered Mirror (quoting United States v. Mead Corp., 533 U.S. 218, 227 (2001)). (quoting United States v. Mead analysis,” Instead, the cision had killed tax exceptionalism. evident not only from the titles of the written commentary that attended it, that attended the titles of the written commentary evident not only from the imagery. The cartoon reproduced there was the brainchild of now-Judge Ronald L. Buch the imagery. The cartoon reproduced there was the brainchild of now-Judge Tax Court. It was shown as the last slide on a panel discussion held at the meeting of the U.S. of the Tax Section Meeting at the Midyear of the Committee on Administrative Practice held S. of the American Bar Association on January 21, 2011. The panel consisted of Gilbert note 12, but also from the imagery that accompanied presentations at gatherings such as meet- note 12, but also from the imagery that accompanied presentations at gatherings such as Bar Association. ings of the Tax Section of the American reliance on uous statute,” will discuss examples specifically from the income tax because the charge that tax is excep- specifically from will discuss examples transfer types of taxation—e.g., context. Other tional has often had particular salience in that generate the kind of exceptionalist rhetoric not taxes, employment taxes, and excise taxes—do tax. typically used in connection with the income concerned only with raising revenue (a view which, if accurate, would indeed make tax excep- revenue (a view which, if accurate, would concerned only with raising promotion of only one the be the only field of law concerned with tional because it would relative lack of diversity in the tax bar. value) contributes to the 2019] the tax outside that places tax toward an attitude loosely, or, more of tax law. realm of ALR Foundation for Medical Education & Research v. United States Foundation for Medical tion is whether these differences add up to tax exceptionalism. In 2011, the exceptionalism. add up to tax these differences tion is whether in of tax exceptionalism to kill the very idea Court appeared Supreme of law. These include scholars, of law. These ceptionalism, and others that followed seemed to add nails to its coffin. others that followed seemed to add ceptionalism, and refused “to carve out an approach to administrative review good for tax law out an approach to administrative review refused “to carve same degree of judicial tax regulations should receive the only” and held that regulations. deference as other and the End of ‘Tax Exceptionalism’ in Judicial Deference Wanted Dead or Alive Wanted C Y 41829-adm_71-4 Sheet No. 9 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 9 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 9 Side B 12/06/2019 13:58:53 M K 18 C Y 17 , 898 F.3d on reh’g en banc . 553 (2016) (arguing The Perfect Process Is the . EV reh’g en banc granted in part, R AX Altera Corporation & Sub- Altera Corporation note 18. [71:4 [71:4 killed tax exceptionalism killed tax exceptionalism .T A infra and remanded opinion withdrawn by Altera Mayo EVIEW , 35 V ) 11/26/19) 11:33 AM R , 898 F.3d at 1266. AW ELETE In addition, the IRS itself has con- In addition, the L D 20 There is also a burgeoning scholarly There is also a OT 19 N , 853 F. Supp. 2d at 140, O (D Stephanie Hunter McMahon, Altera Corp. & Subsidiaries v. Comm’r, Nos. 16-70496, DOCX 2. see also Cohen v. United States, 578 F.3d 1, 6–12 (D.C. Cir. 2009). (D.C. Cir. 2009). Cohen v. United States, 578 F.3d 1, 6–12 DMINISTRATIVE DMINISTRATIVE Long-Distance A opinion withdrawn by Altera reversed by aff’g invalidated an important Treasury regulation for fail- regulation an important Treasury invalidated 16 ME REVIEW ME and a unanimous Tax Court in Tax Court and a unanimous _ 15 , U. Mich. Pub. L. Res. Paper No. 391, U. Mich. L. & Econ. Res. Paper Pub. L. Res. Paper No. 391, U. Mich. , U. Mich. , Cohen v. United States, 599 F.3d 652 (D.C. Cir. 2010), , Cohen v. United States, 599 F.3d 652 (D.C. but then shook the tax world when it withdrew its opinion, but then shook the Long-Distance Tel. Serv. Fed. Excise Tax RefundLong-Distance Tel. Serv. Fed. Excise Tax Litig., 853 F. Supp. 2d 138, Altera at n.4 (providing a comprehensive bibliography of scholarship resisting the notion , 650 F.3d 717, 736 (D.C. Cir. 2011) (en banc), , 650 F.3d 717, 736 (D.C. Cir. 2011) (en banc), 145 T.C. at 133. Subsequent history is described 145 T.C. at 133. Subsequent history is described ABREU GREENSTEIN ABREU Delegating Tax .In re re .In . .Id. .Id. 71.4_ But now it seems premature to have thought tax exceptionalism was dead. tax exceptionalism to have thought it seems premature But now 15 17 19 20 16. 145 T.C. 91 (2015), 18. 3542989, 2018 WL in all areas of the tax law, for all time. in all areas of the ure to satisfy the “reasoned decisionmaking” requirements of the APA. requirements of the decisionmaking” the “reasoned ure to satisfy Instead, tax exceptionalism is hot. A divided Ninth Circuit reversed the Tax is hot. A divided Ninth Circuit Instead, tax exceptionalism Court in that forcing Treasury to follow the APA process with respect to tax guidance would be harmful that forcing Treasury to follow the APA process with respect to tax guidance would be harmful Jr. & Kyle D. R. Hines to the tax development and administration of the tax law); James Logue, sidiaries v. Commissioner sidiaries v. Rothenberg, Acting Deputy Assistant Attorney General; Kathryn A. Zuba, Special Counsel, Assistant Attorney General; Kathryn Rothenberg, Acting Deputy LLP, and McCutchen L. Buch, then at Bingham IRS Office of Chief Counsel; and Ronald at Caplin and Drysdale.was moderated by Christopher Rizek, partner Notice was legally binding and required notice-142–43 (D.D.C. 2012) (finding that an IRS and-comment rulemaking), 668 the applied of Columbia the District for Court the District succession, quick Reve- issued by the Internal Act (APA) to Notices Procedure Administrative (IRS), nue Service ALR literature that challenges the proposition that literature that challenges that tax exceptionalism is dead); that tax exceptionalism only to restore relative calm by issuing a second divided opinion again re- calm by issuing a second divided only to restore relative Tax Court. versing the unanimous Before being decided on the merits, the case bounced back and forth between the District Before being decided on the merits, the case the different treat- issues which also implicated Court and the Court of Appeals on procedural ment of tax: The application of the Anti-Injunction as and Declaratory Judgment Acts as well remedies. In reaching its decision on the merits, the doctrine of exhaustion of administrative parties agree that the Circuit’s opinion may the District Court began by observing that “[t]he to comply with the required notice-and- failing suggest that defendant violated the APA by comment procedures.” In re opinion vacated in part Enemy of the Good Tax: Tax’s Exceptional Regulatory Process rev’d in part allow time for a reconstituted panel to reconsider 1266 (9th Cir. 2018) (withdrawing opinion to argu- of one of the judges who heard the oral the appeal; panel reconstituted due to the death ment but died before the decision was issued). 16-70497, 2018 WL 3542989 (9th Cir. July 24, 2018), 16-70497, 2018 WL 41829-adm_71-4 Sheet No. 9 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 9 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 10 Side A 12/06/2019 13:58:53 , 21 AX , 82 ,T , IRS Chief And The Future Of Structural Tax Exceptionalism 669 669 Coloring Outside the Lines: Exam- , OIRA (Apr. 11, 2018), https: 01A0-4EE6-9AAA-CE9FBF3F2C1F; 01A0-4EE6-9AAA-CE9FBF3F2C1F; ) 11/26/19) 11:33 AM BNA (June 27, 2016), https://convergen BNA (June 27, 2016), https://convergen XCEPTIONAL E ELETE note 12. D OT OT Kristin Hickman, ,N supra N O LOOMBERG (D ,B see also Memorandum of Agreement Memorandum DOCX IFFERENT 2. :D AX T ME REVIEW ME _ (Part II), Aug. 21, 2019, https://taxprof.typepad.com/taxprof_blog . 1727, 1736–37 (2013); James M. Puckett, . 1727, 1736–37 (2013); James M. IRS Chief Counsel Describes Administrative Pressures From Non-Tax Law IRS Chief Counsel Describes Administrative Pressures Far from dead, the concept of tax exceptionalism has gone of tax exceptionalism dead, the concept Far from EV 23 L. R . 1067, 1070–73 (2015). note 2, at 1900; Magidenko, note 2, at 1900; Magidenko, EV AME supra D ABREU GREENSTEIN ABREU , June 10, 2011, 2011 TNT 113-70. And although some Treasury Regulations now undergo review by the undergo review Regulations now some Treasury And although .L.R Tax Analysts, A 22 71.4_ A tax regulatory action will OIRA under section 6 of Executive review by be subject to Order 12866 if it is likely to result in a rule that may: (a) create a serious inconsistency or otherwise interfere with an action taken or planned issues, such as by prescribing a rule of by another agency; (b) raise novel legal or policy effect on conduct backed by an assessable payment; or (c) have an annual non-revenue the economy of $100 million or more, measured against a no-action baseline. 23. and Regulatory of Information Office between the of Agreement The Memorandum The answer is no. An accumulation of differences between tax and other An accumulation of differences between The answer is no. 22.rule chal- In 2016, the IRS Chief Counsel explained that when the courts hear tax 21. pt. 32.1.5.4.7.5.1(2) (Sept. 30, Internal Revenue Manual 2011) (“[M]ost M K OTRE OTES //www.whitehouse.gov/wp-content/uploads/2018/04/OIRA-TreasuryMOA_4.11.18.pdf //www.whitehouse.gov/wp-content/uploads/2018/04/OIRA-TreasuryMOA_4.11.18.pdf 5, 2019). (last visited Nov. 49 G see also ceapi.bna.com/ui/content/articleStandalone/245064960000000620/372617?emailAddress= ceapi.bna.com/ui/content/articleStandalone/245064960000000620/372617?emailAddress= $$$EMAILADDRESS$$$&reportGuid=E4D0BEAF- Brent J. McIntosh & Neomi Reo, Brent J. McIntosh Affairs (OIRA) and Treasury provides that: Affairs (OIRA) from backdrop to focal point, which brings us back to the original question: focal point, which brings us back to from backdrop to Is tax exceptional? Put another way, an not add up to tax exceptionalism. fields of law does kind of law or differences does not produce a different accumulation of of those differences to not law at all. If we analogize each something that is lenges on the merits, they are expected to rule on the law, not to hold the IRS and Treasury lenges on the merits, they are expected to rule analysis and the like of fact-finding, scientific reviews, economic “to requirements . . . . Yet all John Herzfeld regulatory ecosystem.” these things exist in the rest of the federal Rules Against Bids to Tie Up Counsel Warns Office of Information and Regulatory Affairs (OIRA), that review is limited (OIRA), that review Regulatory Affairs Information and Office of ways. in specific N No. 14-005 1, 44 (Oct. 2014), available at http://ssrn.com/abstract=2402047 or at http://ssrn.com/abstract=2402047 (Oct. 2014), available No. 14-005 1, 44 v. IRS Daniel Hemel, Bullock http://dx.doi.org/10.2139/ssrn.2402047; 2019] regula- of its most that maintaining exceptionalism, on to tax to hold tinued of the APA requirements notice-and-comment not subject to the tions are Tax Administrative Law /2019/08/hemel-bullock-v-irs-and-the-future-of-tax-administrative-law-part-ii.html#more; Zelenak, ALR IRS/Treasury regulations will be interpretative regulations because they fill gaps in legislation regulations because they IRS/Treasury regulations will be interpretative or have a prior existence in the law.”); ining Treasury’s (Lack of) Compliance with Administrative Procedure Act Rulemaking Requirements ining Treasury’s (Lack of) Compliance with Administrative and that the APA’s reasoned decisionmaking standard applies differently to standard applies decisionmaking the APA’s reasoned and that tax. N C Y 41829-adm_71-4 Sheet No. 10 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 10 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 10 Side B 12/06/2019 13:58:53 M K 26 C Y Section III.B. infra Section III.A. infra [71:4 [71:4 EVIEW ) 11/26/19) 11:33 AM R AW ELETE L D OT N O (D DOCX 2. DMINISTRATIVE DMINISTRATIVE A 24 ME REVIEW ME _ On the contrary, questions about the effect of the differences On the contrary, questions about For pragmatists the question of whether the accumulated grains of the question of whether the accumulated For pragmatists Sections III.A & III.B. ABREU GREENSTEIN ABREU 27 25 71.4_ We believe that pragmatism provides a way of resolving the Sorites Par- provides a way of resolving We believe that pragmatism 27. of the way in which the phenomenon captured The tax law is replete with examples 25. framework for our analysis, see For a discussion of the pragmatist 26. is not that asking for a heap is the only way that A can get the is important What 24. For a more detailed discussion of the Sorites Paradox, see Hence, only if it becomes useful to treat the accumulated differences be- treat the accumulated Hence, only if it becomes useful to between tax and other fields of law can be fully answered by focusing on the between tax and other fields of law tax that there is something about specific issue and then deciding whether treated in a different way. In addition, requires that particular issue to be sand constitute a heap is a question about whether it is useful, at some point, is a question about whether it is sand constitute a heap Hence, there is no accumulation of sand as a heap. to think about the Rather, if it becomes the sand becomes a heap. specific point at which will characterize the accumulation of sand as a heap, we useful to treat an quantity of sand heap. For example, if A wants a sizable accumulation as a ask B to bring over a heap of sand. A’s to complete her sandcastle, she can will allow B to identify what A wants; saying that she wants a heap of sand or even a handful of sand. Being B will not just bring a couple of grains a heap allows B to satisfy A’s needs. able to identify a quantity of sand as adox. 670 constitute grains the that collectively well conclude we might of sand, a grain one grain to created by adding would have been sand. The heap a heap of different. fundamentally constitute something would arguably another and states that, Sorites Paradox paradox. The a well-known But this produces different in are doing nothing of a grain we with each addition although in kind something different at some point what we did before, kind from a heap. The paradox flowscomes into being: act is from the fact that each but yet a heap of and no specific act creates a heap, the same as the others sand comes into being. ALR quantity of sand she wants, but that referring to an accumulation of grains as a heap is useful; an accumulation quantity of sand she wants, but that referring to to B, which B can use in responding. information it allows her to communicate pragmatist concept of usefulness intersect. by the Sorites Paradox and the application of the See infra It is useful. making tax different in kind, should tax tween tax and other fields of law as question, then, is whether imposingbe characterized as exceptional. The the accumulation of differences provides exceptionalist characterization on the it does not. Unlike A, who is able to anything that is useful. We believe asking for a heap of sand, neither Con- convey useful information to B by scholars, nor tax practitioners, nor tax- gress, nor courts, nor the IRS, nor by characterizing tax as excep- payers, give or receive any useful information tional. 41829-adm_71-4 Sheet No. 10 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 10 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 11 Side A 12/06/2019 13:58:53 to the Mayo Chevron Hence, in 29 671 671 28 has been affirmatively harmful ) 11/26/19) 11:33 AM XCEPTIONAL E . Tax is different from other fields ELETE D OT OT ,N Mayo N O exceptionalism famously refused to characterize tax as ex- refused to characterize famously (D DOCX IFFERENT 2. Mayo :D with tax AX T ME REVIEW ME _ deference, like regulations in other fields, the Court consid- in other fields, the like regulations deference, difference to the Treasury regulation before it. Writing for the Court, before it. Writing for the to the Treasury regulation notes 5–9. notes 162–71 and accompanying text. Chevron Chevron Mayo Found. for Med. Educ. & Research v. United States, 562 U.S. 44, 56 (2011). Educ. & Research Found. for Med. Mayo ABREU GREENSTEIN ABREU But here our focus is different. In light of the persistence of the con- light But here our focus is different. In . . See infra . See supra 30 71.4_ To develop our claim we begin by identifying the sources of the concept To develop our claim we begin by The Supreme Court in The Supreme 28 29 30 In this Article we develop the claim that tax exceptionalism is never useful In this Article we develop the claim M K to the tax system, and, as noted above, we have so argued in other scholar- to the tax system, and, as noted above, ship. ceptional. Faced with the issue of whether Treasury regulations should be Treasury regulations issue of whether Faced with the ceptional. accorded for treating tax dif- been presented with any justification ered whether it had it had not, the Court respect. Concluding that ferently in that particular applied why our review of tax explained, “We see no reason Chief Justice Roberts pursuant to not be guided by agency expertise regulations should our review of other regulations.” the same extent as of law, but that does not make it exceptional. Indeed, we believe that the of law, but that does not make it exceptional. conflation of tax Court explicitly considered the possibility of treating tax as exceptional but the possibility of treating Court explicitly considered doing so because tax believe the Court was correct in rejected it. And we analysis. It would have added nothing to the Court’s exceptionalism would gotten in the way, as On the contrary, it would have not have been useful. in the same case. it did in the Eighth Circuit’s analysis of tax exceptionalism in Part I. We challenge tax exceptionalism in Part II, of tax exceptionalism in Part I. We refute three important arguments for where we examine in detail and then invoke the Sorites Paradox to determine tax exceptionalism. In Part III, we between tax and other fields of law whether an accumulation of differences We develop the pragmatist argument suffices to render tax exceptional. sketched earlier in this Introduction to show that the idea of tax exceptional- and ism does no useful work. In Part IV, we analyze two judicial opinions law five works of scholarship to make the case that treating tax simply as cept, which we believe is fueled by the salience of the differences between tax cept, which we believe is fueled by the effect of those differences directly. We and other fields of law, we tackle the existence; rather, we show that despite do not minimize them or deny their should not lead to the conclusion that their existence and their number they tax is exceptional. 2019] identifi- it impedes the analysis; obfuscates tax as exceptional characterizing should of why the difference and examination the precise difference cation of different result. lead to a ALR and that all analysis of tax issues should proceed in the deliberate, issue-by- and that all analysis of tax issues should issue manner the Court adopted in C Y 41829-adm_71-4 Sheet No. 11 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 11 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 11 Side B 12/06/2019 13:58:53 . M K HE C Y IBR ,T ONES , 102 L. L H. M. J . 70, 70 (1972) (describing RNOLD A HIL [71:4 [71:4 .J.P see also M XCEPTIONALISM EVIEW E ) 11/26/19) 11:33 AM R , 93 A AX AW ELETE L T D OT The reason for the exclusion of taxation The reason for the exclusion of taxation N 31 O Early Exceptionalism (D
A. DOCX The Creation and Transmission of Justinian’s Novels 2. OURCES OF OURCES DMINISTRATIVE DMINISTRATIVE S A ME REVIEW ME Ammianus on Roman Taxation _
I. 82–83 (P. A. Brunt ed. 1974) (commenting on the lack of documented very different from other fields of law—so much so that it very different from other fields of In other words, Justinian did not want taxation to be either In other words, Justinian did not want 32 feel R.I. Frank, Timothy G. Kearley, CONOMY E ABREU GREENSTEIN ABREU .See .See 71.4_ Section B describes two complementary twentieth-century develop- two complementary twentieth-century Section B describes experience the tax law. Here, we Section C focuses on how taxpayers In this Part, we explore some historical, political, and historical, political, we explore some In this Part, factors sociological Tax exceptionalism is not only ubiquitous; it is also old. The belief that tax Tax exceptionalism is not only ubiquitous; 32 31 OMAN that may help account for the belief that tax is exceptional. In Section A, we for the belief that tax is exceptional. that may help account the Roman Emperor thinking to the law reform efforts of trace exceptionalist of U.S. taxation. jump 2,000 years forward to the origins Justinian and then The first is the emer- how the income tax is conceived. ments regarding of the income tax is that the only legitimate purpose gence of the dogma or the pursuit rather than the regulation of behavior the raising of revenue, of public fi- policies. The second is the ascendancy of substantive public the evolution of that as the most powerful influence on nance economists revenue raising dogma. encounters with the tax system, the argue that the pervasiveness of taxpayers’ by tax- are not generally internalized reliance of that system on norms that cognitive biases work together to make payers, and the influence of various the tax law makes tax feel exceptional. fields of law has ancient roots. Tax was is fundamentally different from other Corpus Juris Civilis, in which he notably absent from the Emperor Justinian’s in one place law so that it could be found sought to compile all of the existing the Empire, even though taxation was and be applied uniformly throughout quite crucial to the Roman Empire. R 672 might and tax is different in which on ways profitably more us to focus allows in specific circumstances. treatment require different ALR J. 377, 378–79 (2010) (describing the process Justinian used to create the code including a first J. 377, 378–79 (2010) (describing the process classical in 529, the issuance of the “fifty decisions” resolving differences among compilation jurists and adding new laws in 530 and 531, and the issuance of the second edition integrating the new legislation into the code and superseding the first edition in 534). from the Corpus Juris Civilis was that tax was seen as the exclusive province of from the Corpus Juris Civilis was that the Emperor. the origins of taxation in the Roman Republic as a tool for Emperors for raising money for the origins of taxation in the Roman Republic as a tool for Emperors for raising money later on); to be reimbursed meant in wartime emergencies 41829-adm_71-4 Sheet No. 11 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 11 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 12 Side A 12/06/2019 13:58:53 Amending Amending 35 . L.F. 35, 38 n.17 (2006) and to keep the exer- and to keep IV 673 673 33 .&C UR .E ) 11/26/19) 11:33 AM XCEPTIONAL UL E ELETE D OT , 21 T OT ,N N art. I, § 7. O id. (D DOCX IFFERENT 2. :D 34 AX This created a legal problem, which required a legal This created a legal problem, which T 36 Two Great Legislators . amend. XVI. ME REVIEW ME _ . art. I, § 2, cl. 1, 3; ONST ONST Tony Weir, Tony Weir, U.S. C ABREU GREENSTEIN ABREU .See .See 71.4_ The income tax differs from other fields of law in yet another way. As The income tax differs from other 34. C U.S. 33 36. the 1894 Pollock v. Farmer’s Loan & Trust Co., 157 U.S. 429, 583 (1895) (holding 35 By contrast, nearly 2,000 years later, on the other side of the Atlantic, 2,000 years later, on the other By contrast, nearly The introduction of the federal income tax in the United States early in The introduction of the federal income M K solution. Law—the Constitution—was the solution. In other words, the solution. Law—the Constitution—was within the realm of law. That the birth of the income tax took place entirely amendment makes it different from income tax required a Constitutional not make it exceptional. Characterizing most other fields of law, but it does to our knowledge of how the income tax as exceptional would add nothing useful. tax came into being. It would not be the income tax “was perhaps the Professor Charlotte Crane has observed, (describing Justinian’s Novels, which did deal mostly with public and tax law but which were (describing Justinian’s Novels, which did deal mostly with public and tax law but which and were not fully was complete codification an unofficial collection of laws enacted after the evidence of Justinian’s “obsession with con- enacted until Justinian’s death; rather, they were trolling everything”). the Constitution is an extraordinary event, but it is a legal event. The amend- the Constitution is an extraordinary Court had found an earlier income ment was necessary because the Supreme tax unconstitutional. figures about the rate of agriculture taxation during most of the Roman Empire and the diffi- Empire of the Roman during most figures about the rate of agriculture taxation the land except for a couple of registrars the relation of the tax to the yield of culty of estimating which show rents amounting to staggering rates from the cities of Antaeopolis and Ravenna land). of over fifty percent of the gross yield of the 2019] why he fields and for other wanted what he which is uniform, or transparent the contrary, Corpus Juris. On laws into the compilation of other caused the of taxation level and manner to determine the to retain the power he wanted empire within the for different populations differently ALR income tax law unconstitutional). income those struggling to forge a country out of thirteen rebellious colonies sought forge a country out of thirteen rebellious those struggling to taxing power of the to the rule of law by constraining the to subordinate tax they provided very were attempting to create. Therefore, government they When that proved in the Articles of Confederation. limited taxing powers greater au- nation, they provided viability of the emerging nearly fatal to the apportionment but circumscribed it by requiring thority in the Constitution with authority to the populist House of Representatives and by vesting only introduce tax legislation. cise of the taxing power opaque. In this case, it was useful to characterize it was useful to In this case, taxing power opaque. cise of the that was realm of law from the banished tax exceptional; Justinian taxation as prerogative. instead retaining it as an imperial known to the public, the twentieth century required a Constitutional amendment. the twentieth century required a Constitutional C Y 41829-adm_71-4 Sheet No. 12 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 12 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 12 Side B 12/06/2019 13:58:53 M K C Y . 171, EV .U.L.R W , 100 N [71:4 [71:4 EVIEW ) 11/26/19) 11:33 AM R AW ELETE L at 175. D Id. OT 38 N O According to Professor Crane, to Professor Crane, According (D 37 note 5. The Ascendency of Economists DOCX 2.
supra DMINISTRATIVE DMINISTRATIVE that has produced an “aspiration toward rational that has produced B. A 39 The Income Tax and the Burden of Perfection ME REVIEW ME _ . It, in contrast to most other existing taxes, holds out the promise of other existing taxes, holds out the promise . It, in contrast to most 41 unmatched in other fields of law. As we explain below, this fields of law. As we explain below, unmatched in other 40 articles discussed in at 178. at 177, 180. at 176–77 (emphasis added). ABREU GREENSTEIN ABREU .See .Id. .Id. .Id. 71.4_ The income tax has also always been one under which, uniquely among taxes, the among uniquely been one under which, tax has also always The income be determinedliability is supposed to taxpayer’s of a set of by the objective application well-defined rules the rule of law. being administered under 41 40 39 Hence, although the income tax differs from other fields of law in the de- Hence, although the income tax differs 37. Charlotte Crane, We agree with Professor Crane that the income tax is perceived as having Crane that the income tax is We agree with Professor 38 Central to the claim that tax is exceptional is the idea that tax is the only Central to the claim that tax is exceptional aspiration has generated an exceptionalist attitude toward the income tax. the income tax. an exceptionalist attitude toward aspiration has generated is an extravagant of contemporary tax exceptionalism Indeed, the hallmark certainty, and predict- and uniformity—for clarity, demand for transparency However, as will refer to as a demand for hyper-clarity. ability—which we the income tax. does not actually characterize we will argue, hyper-clarity tax, is defined only by the application No field of law, including the income of “well-defined rules.” toward rational perfection,” the gree to which it has produced an “aspiration If tax were in fact hyper-clear then aspiration is not matched by the reality. it would not be law because no field of it would be exceptional; accordingly, law is, or can be, limited by the of a well-defined set of “objective application in previous scholarship, tax is not a field rules.” Indeed, as we have shown fields of law tax contains both rules defined exclusively by rules. Like other and standards. 674 aimed expedient an administrative not just as concept, as a ever born first tax way possible,” politically congenial revenue in the most at raising and be- held out the science—it in economics—a concept was grounded cause that scientific rationality. promise of ALR an “aura of rationality” perfection,” 176 (2006). The concept was ability to pay. field of law which has as its sole legitimate purpose the raising of revenue, not field of law which has as its sole legitimate the pursuit of other substantive social the regulation of human behavior or income tax, that purpose seems to put policies. In the specific case of the As noted above, the income tax economics at the core of the field. “was a concept, not just as an administrative perhaps the first tax ever born as 41829-adm_71-4 Sheet No. 12 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 12 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 13 Side A 12/06/2019 13:58:53 See , 42 NCOME AS I . 1793 (2005). note 37, at 182; EV supra L. R EFINITION OF Those opinions con- D 675 675 46 Crane, HE :T , 52 UCLA see also ) 11/26/19) 11:33 AM XCEPTIONAL E AXATION ELETE T D OT OT ,N 433 (1984); N O NCOME 44 I (D Envisioning the Modern American Fiscal State: Progressive-Era American Fiscal State: Progressive-Era Envisioning the Modern 45 NALYSIS DOCX A IFFERENT 2. :D 50 (1938). This is sometimes referred to as the Schanz-Haig- 50 (1938). This is sometimes referred to as ERSONAL AX ,P note 43. T INANCE F OLICY ME REVIEW ME _ P supra note 37, at 178. IMONS Ajay K. Mehrota, Ajay K. Mehrota, UBLIC The Schanz Concept of Income and the United States Federal Income Tax The Schanz Concept of Income and the United Indeed, the heart of the income tax law—the definition of definition of income tax law—the the heart of the Indeed, see ISCAL C. S supra /P , Gregory v. Helvering, 293 U.S. 465, 468–69 (1935) (opinion written by Jus- F note 43, at 1861–62 (discussing the depth of influence of Haig’s work). 43 Mehrota, ENRY supra and economists were the ones who developed and then championed and then championed who developed were the ones and economists RCHIV ABREU GREENSTEIN ABREU 42 A . e.g. See, .See 71.4_ 46 45 The early tax acts were minimalist, at least by comparison to the highly were minimalist, at least by comparison The early tax acts 44. H 42. Crane, 43. century saw in the the late nineteenth in As Professor Crane explains, “Economists Of course, before the ideas of the economists could become legal obliga- could become legal of the economists before the ideas Of course, ROBLEM OF at 180. For a historical explanation of the development of the income tax and the role of at 180. For a historical explanation of the M K P INANZ in “relation to the business” to be considered a taxable event); Welch v. Helvering, 290 U.S. v. Helvering, 290 in “relation to the business” to be considered a taxable event); Welch by Judge Cardozo defining “ordinary” expenses not as those 111, 114 (1933) (opinion written tice Sutherland holding that “a transfer of assets by one corporation to another” must be made tice Sutherland holding that “a transfer of assets by one corporation to another” must be Economists and the Intellectual Foundations of the U.S. Income Tax U.S. Economists and the Intellectual Foundations of the economists in it, economists the concept. F articulated provisions that are the hallmark of contemporary tax legislation. tax legislation. that are the hallmark of contemporary articulated provisions from which a few tax base began with “gross income” Calculation of the such as “ordinary and were excluded, and other items items such as “gifts” or business” were de- of “carrying on,” a “trade necessary,” “expenses” defined. Hence, the job of defining ducted, but none of those terms were the administrators and eventually on these terms fell initially on the tax that the process of defining key terms in courts. Judicial involvement meant Iconic judicial figures like Oliver tax became a quintessentially legal process. wrote significant tax opinions in Wendell Holmes and Benjamin Cardozo definitions. which they tried to provide the necessary Mehrota, Simons definition but is most often referred to as just the Haig-Simons definition, perhaps just the Haig-Simons often referred to as definition but is most Simons the publication of Schanz’s work and Haig’s. because of the substantial interval between Carl S. Shoup, 2019] way pos- congenial most politically in the revenue at raising aimed expedient sible,” ALR income—is founded on the definition propounded by a duo of economists: by a duo definition propounded founded on the income—is and Henry Simons. Robert Haig tinue to be cited today. income tax a refreshingly rational and coherent set of criteria for imposing in tax burdens.” in tax burdens.” a refreshingly rational and coherent set of criteria for imposing tax income Id. A tions, they had to be embodied in law. Professor Ajay Mehrota has provided be embodied in law. Professor Ajay tions, they had to of the ideas both the role of economists in the development a lucid account of ways in which econ- foundation of the income tax and the that comprised the to craft the early with legislators and with the legal system omists interacted income tax. twentieth century C Y 41829-adm_71-4 Sheet No. 13 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 13 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 13 Side B 12/06/2019 13:58:53 . M K C Y ASES ARV 48 and 49 :C (1st ed. , 66 H AXATION to determine AXATION T T 50 Lucas v. Earl NCOME EDERAL I F [71:4 [71:4 EDERAL EVIEW ) 11/26/19) 11:33 AM R , F The Income Tax Project of the American Law ATERIALS ON AW ELETE L M D text accompanying note 46. ARREN OT N O C. W (D See supra ASES AND DOCX , C ILLIAM 2. DMINISTRATIVE DMINISTRATIVE A &W RISWOLD ME REVIEW ME _ URREY N. G S. S (1st ed. 1953). RWIN E TANLEY Scholarly debate flourished and the American Law Institute (ALI) Law Institute and the American debate flourished Scholarly ABREU GREENSTEIN ABREU . 761, 775 (1953). ATERIALS 47 .See M EV 71.4_ In the income tax, as in other complex legislation, the need is In the income tax, as in which will for a standard the for solving the vehicle and serve as into the future project our present aims or thwarted when arise. The legislative function is not denied unforeseen cases as they perform substantial Government are relied upon by Congress to other branches of the are and judicial interpretation of statutes. Administration tasks in the application tax is no exception. The income overall process of legislation. necessary parts of the the statute could tax salaries to those who earned them and provide that the tax could and them the statute could tax salaries to those who earned and contracts however skillfully devised not be escaped by anticipatory arrangements even for a second in the man who earned to prevent the salary when paid from vesting before us and we think that no distinction of the statute to us the import it. That seems to the arrangement by which the fruits can be taken according to the motives leading grew.). that on which they are attributed to a different tree from 48. C. Warren, Stanley S. Surrey & William 49. 281 U.S. at 111, 115 (1930). 50.constitutes “necessary expenses,” Justice what Because it is difficult to determine In those early days the income tax was not regarded as exceptional. It was the income tax was not regarded as In those early days 47 Surrey and Warren thus suggested that tax legislation was to be treated that tax legislation was Surrey and Warren thus suggested As the income tax evolved from a class tax to a mass tax, it also joined the also joined tax, it to a mass a class tax from tax evolved income As the made substantial contributions to the re-codification effort that began at the effort that to the re-codification contributions made substantial Revenue Code of 1954. War II and resulted in the Internal conclusion of World Surrey and Warren, fields of law. Indeed, Professors analyzed like other for the ALI project, explained: writing as Reporters Institute: Gross Income, Deductions, Accounting, Gains and Losses, Cancellation of Indebtedness Cardozo explained that such a determination must be based on “life in all its fullness” or, in Cardozo explained that such a determination must be based on “life in all its fullness” at 113–15. 290 U.S. other words, the specific facts of a case. Welch, that are “habitual or normal” but as those which are “common and accepted”); Lucas v. Earl, that are “habitual or normal” but as those which by Justice Holmes holding that 281 U.S. 111, 114–15 (1930) (opinion written 676 ALR L. R academy. When Erwin Griswold compiled the first casebook on federal income first casebook on compiled the When Erwin Griswold academy. and Wil- from Stanley Surrey a competing volume to be followed by taxation, taught at law roster of courses tax entered the liam Warren, nation- schools wide. using the interpretive tools gen- like any other kind of complex legislation, judges, and that is precisely how the erally available to administrators and courts did not turn to or develop precise early courts treated tax law. Those they drew on their own experience and technical rules just for tax. Rather, Justice Holmes invoked the fruit- and on other fields of law. For example, of income in and-tree metaphor to explain assignment Justice Cardozo famously looked to Justice Cardozo famously looked to “life in all its fullness” 1940); S AND 41829-adm_71-4 Sheet No. 13 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 13 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 14 Side A 12/06/2019 13:58:53 54 55 This de- This 53 A “Comprehensive . 1, 9–10 (1966)). . 1016, 1029 (1968) (citing OL 677 677 EV ,V .L.R . 925, 934 (1967). at 114 (citing Old Colony R.R. Co. v. EV ARV ) 11/26/19) 11:33 AM AXATION Stargazing: The Alternative Minimum Tax for Stargazing: The Alternative Minimum The Tax Expenditure Concept and the Budget Id. XCEPTIONAL T E . 679 (1976). ELETE .L.R , 81 H D . 223, 241–42 (1990). EV OT More on Boris Bittker and the Comprehensive Tax Base: More OT ARV EV ,N N he seems to have taken a page out of the taken a page out of he seems to have .L.R O 56 (D Somewhat more recently, Justice Brennan Brennan Justice recently, more Somewhat .L.R OM , 80 H 51 R Surrey and McDaniel pointed out that there Surrey and McDaniel OMMISSION ON note 48. DOCX 57 C IFFERENT .&C 2. :D , 69 O supra OYAL AX NDUS I R T 52 ME REVIEW ME _ & Warren, , 17 B.C. EPORT OF THE Surrey Stanley S. Surrey & Paul R. McDaniel, , R ABREU GREENSTEIN ABREU .See .See 71.4_ 54. application of the ‘no preference’ or Bittker argued that “a systematic and rigorous 56 Similarly, although in many respects Surrey advocated the application of in many respects Surrey advocated Similarly, although 51. Justice Cardozo explained that “language is to be read in its natural and common mean- 52.363 U.S. 278, 285, 289 (1960). Comm’r v. Duberstein, 53. by forcing “The comprehensive income tax base is an attempt to achieve fairness But despite the role of lawyers and legal process in mapping out the con- in mapping out and legal process the role of lawyers But despite 55. to the Canadian Taxation Commission critiqued Bittker’s position, pointing Galvin 57 M K ANADA C Reform Act of 1974 bate revealed the tension between the advocates of the kind of evolutionary, tension between the advocates of the bate revealed the (e.g., Boris Bittker), typical of law development generally organic approach conventional legal analysis to tax, conventional legal [comprehensive tax base (CTB)] [] approach would require many more sweeping changes in would require many more [comprehensive tax base (CTB)] [] approach and accused advocates of a CTB of the existing tax structure than have been acknowledged,” Boris I. Bittker, society.” tax structure in a complex “hop[ing] for a simplified Tax Base” as a Goal of Income Tax Reform 2019] expense. was an ordinary what ALR economist’s playbook when, together with Paul McDaniel, he developed the when, together with Paul McDaniel, economist’s playbook concept of tax expenditures. ing” to determine the meaning of the word ordinary. ing” to determine the meaning Individuals and Future Tax Reform Comm’r, 284 U.S. 552, 560 (1932); Woolford Realty Co. v. Rose, 286 U.S. 319, 323 (1932)). Co. v. Rose, 286 U.S. 319, 323 Realty Comm’r, 284 U.S. 552, 560 (1932); Woolford and the] purposes of this equivalence are: (1) to taxable income to match economic [income, that those who earn the same amount of in- tax liability, and (2) to ensure universal compel Moran, come pay the same amount of tax.” Beverly tours of the tax law, its origins in public finance economics were never far economics were in public finance tax law, its origins tours of the and lengthy debate on scholars engaged in a public behind. For example, (CTB). establishing a comprehensive tax base the desirability of were two different types of provisions in the tax law. One type was intended were two different types of provisions principal and only germane objective to promote the raising of revenue—the principles of public finance economics. of a system of taxation derived from The Practicalities of Tax Reform and the ABA’s CSTR Report to conclude that a CTB system is workable and equitable; the Commission Report is workable and equitable; the Commission Report to conclude that a CTB system to the changes in the economic power of concluded “that taxes should be allocated according Galvin, Charles O. individuals and families.” defined a gift as a transfer that proceeds from the that proceeds from gift as a transfer defined a “detached and disinter- reference to the determined by of the donor, ested” generosity “mainsprings conduct.” of human and those who craved more pointed, technical definitions consonant with the more pointed, technical definitions and those who craved Charles Galvin). by the science of economics (e.g., precision demanded C Y 41829-adm_71-4 Sheet No. 14 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 14 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 14 Side B 12/06/2019 13:58:53 . M K C Y ASH at 679. , 8 W Id. . 1, 3, 23–24 EV L. R AX note 8. supra , 60 T , 60 [71:4 [71:4 and have continued to develop it in note 5. EVIEW ) 11/26/19) 11:33 AM R supra AW ELETE L D Toward a Jurisprudence of Social Values 58 OT 61 N Defining Income Abreu & Greenstein, O (D See Accordingly, provisions aimed directly at Accordingly, provisions The Three Goals of Taxation 59 DOCX 2. DMINISTRATIVE DMINISTRATIVE A ME REVIEW ME _ Richard K. Greenstein, Richard K. Greenstein, 60 See Reuven S. Avi-Yonah, . 1, 4–5 (2015); Abreu & Greenstein, EV .R ABREU GREENSTEIN ABREU .But see .But URIS 71.4_ The apparently monogamous marriage of economics and tax-as-revenue The apparently monogamous marriage In developing, coining, and ultimately enshrining the concept of tax ex- the concept ultimately enshrining coining, and In developing, 61. first explored this concept in We 60 58. explained, the requirement that government produce an an- and McDaniel As Surrey This bifurcation of tax into “proper” revenue raising provisions and of tax into “proper” revenue raising This bifurcation 59. Act of 1974, Act of July 12, 1974 Pub. L. No. 93-344, The Congressional Budget subsequent work. raising, which leaves provisions that carry out other values outside the realm raising, which leaves provisions that decades since Surrey and McDaniel de- of tax, has only strengthened in the As former IRS Commissioner veloped the concept of tax expenditures. of economists in the legislative process Larry Gibbs has observed, the role penditures in the legislative process during his tenure as Assistant Treasury tenure as Assistant process during his in the legislative penditures revenue in explicitly divorcing succeeded for Tax Policy, Surrey Secretary home own- the promotion of else (e.g., from everything raising objectives investment). ership or capital (2006) include “steer[ing] private sector activity in the (arguing that the basic goals of taxation for ac- directions desired by the government” and that tax expenditures are an effective tool complishing this). In other work we have suggested a way in which the conceptual bifurcation to the of the tax law, which follows from the concept of tax expenditures, may contribute relative lack of diversity in the tax bar. 678 un- objectives or economic social promote to was intended other type The of revenue. with the raising connected ALR U. J nual tax expenditure budget “represents the most concrete recognition taken by any country nual tax expenditure budget “represents the thus are essentially linked to spending and of government that tax subsidies constitute a form covered in budget documents.” the methods of government spending traditionally “other” social or economic provisions, contributes to the sense that tax is economic provisions, contributes to “other” social or field of law concerned a normative vision of tax as a exceptional. It creates revenue—and unconcerned with so- exclusively with a single value—raising were true, tax would indeed be excep- cial values. If either of those things itself to the pursuit of a single value or tional, for no other field of law limits But tax is not exceptional; as we will rejects the promotion of social values. with multiple, heterogeneous social show below, tax is necessarily concerned values, just as other fields of law are. raising revenue were seen as properly within the ambit of tax policy and seen as properly within the ambit raising revenue were which include equity, of public finance economics, embodying the values at promoting But provisions directed efficiency, and administrability. rele- than raising revenue—tax expenditures—were some objective other of spending ra- of “other,” specifically to the category gated to the status ther than taxing. § of an annual Tax Expenditure Budget). 297 (1974) (requiring the promulgation 601(e), 88 Stat. 41829-adm_71-4 Sheet No. 14 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 14 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 15 Side A 12/06/2019 13:58:53 at 367. Id. LUEPRINTS FOR B And the im- the And 62 ., https://www.taxpolicy ., https://www.taxpoli- 679 679 TR TR C C Y 66 OREWORD TO ’ Y ’ ,F OL In addition, the importance the importance In addition, P OL Indeed, one legal scholar has Indeed, one legal 63 P ) 11/26/19) 11:33 AM 64 AX XCEPTIONAL E , T AX REASURY ELETE D T OT 67 , T OT ,N N O (D T OF THE ’ . 723, Joint Commit- 725–28 (detailing the history of the EP DOCX . 365, 367 (1998). IFFERENT EV In short, he feared that tax legal scholars had In short, he feared 2. Reinventing Tax Scholarship: Lawyers, Economists and the Role of the Reinventing Tax Scholarship: Lawyers, Economists EV 65 , D :D note 12, at 29 (observing that “the general sense is that the tax L. R AX Research & Commentary L. R T AX IMON How of the Tax Law and the Emergence of the Staff of the Joint Codification supra ME REVIEW ME _ note 62, at 778 (concluding that “[r]evenue estimating, described as E. S (1977) (citing the work of Deputy Assistant Secretary of the Treasury (1977) (citing the work of Deputy Assistant , 71 T ORNELL Why Tax Feels Extraordinarily Different from Other Fields of Law Law Different from Other Fields of Why Tax Feels Extraordinarily , supra ILLIAM EFORM
, 83 C R Magidenko, Magidenko, Yin W at 435. Although Professor Livingston’s concern was more broadly about the role C. AX ABREU GREENSTEIN ABREU T .See .See . See About the Tax Policy Center .Id. see also 71.4_ In addressing the sources of tax exceptionalism, we focused in Section A In addressing the sources of tax exceptionalism, 67 65. Livingston, A. Michael 62. Yin, K. George 63 64 66 M K ASIC Legal Academy on its historical antecedents and in Section B on its roots in public finance on its historical antecedents and in on the experiential sources of tax excep- economics. In this section we focus that make the tax law feel radi- tionalism, i.e., the experiences of taxpayers cally different from other fields of law. Committee on Taxation worried that “legal scholars are gradually losing influence to economists and scholars are gradually losing influence worried that “legal insights of in- lawyers’ and only occasionally are [tax] other social scientists, terest to nontax authors.” largely an ‘afterthought’ in 1972, has since become much more sophisticated and important.”). largely an ‘afterthought’ in 1972, has since become of economic theory continued to grow. This resulted from the prominence resulted from the to grow. This theory continued of economic the increasing im- by academic economists and from of work published the Tax Policy Center, produced by think tanks such as portance of the work principally by economists. which are staffed of legal scholarship in the face of the increasing influence of movements such as and eco- law of legal scholarship in the face of the increasing used tax as the focus of his discussion because he thought that the “isolation of the he nomics, it in it, make cooperation tax field, and the long history of lawyer-economist . . . an odd prism through which to examine the prospects for contemporary legal scholarship.” feel ‘different’”). laws somehow B 2019] Commit- the Joint and Treasury Both and 1980s. the 1970s over expanded revenue esti- who generated staffs of economists developed tee on Taxation legislation. on proposed distributional analyses mates and ALR tee); center.org/research-commentary (last visited Nov. 5, 2018). portance of those estimates not only grew but sometimes even became but sometimes not only grew of those estimates portance for enactment. of the prospects determinative David Bradford in producing the study that led to the publication of this piece). David Bradford in producing the study that cycenter.org/about (last visited Nov. 5, 2019). Since the 1990’s the output of organizations cycenter.org/about (last visited Nov. 5, 2019). dramatically. For example, in 1996, the Tax such as the Tax Policy Center has increased reports, while, in 2016, that institution published Policy Center published only nine research sixty-four research papers. become little more than “second-tier economists.” become little more C Y 41829-adm_71-4 Sheet No. 15 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 15 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 15 Side B 12/06/2019 13:58:53 M K C Y HILOSOPHICAL , in P [71:4 [71:4 National Tax Association Annual Meet- EVIEW ) 11/26/19) 11:33 AM R For example, the criminal law and For example, the AW ELETE L 68 D OT N O (D DOCX 2. In this view, the difference between systems of tax In this view, the difference between DMINISTRATIVE DMINISTRATIVE A Forced Labor Theory of Property and Taxation A 69 193, 195–96 (Monica Bhandari ed., 1st ed. 2017) (inspired by a 193, 195–96 (Monica note 3, at 162–63. AW ME REVIEW ME L _ supra AX T Theodore P. Seto, The Failure to Internalize Tax Norms ABREU GREENSTEIN ABREU
.See 1. , Presentation at the Nat’l Tax Ass’n Annual Conference on Taxation (Nov. 15, 2014). , Presentation at the Nat’l Tax Ass’n Annual 71.4_ In addition to the salience of the taking function of tax there are at least In addition to the salience of the taking analysis reveals P. Seto has pointed out that a similar Professor Theodore 69 68. Rosenberg, private sec- from the wealth transfer of a to require tax law seems Only the One important difference between tax and many (although certainly not One important difference between OUNDATIONS OF presentation by Professor Neil Buchanan); Neil Buchanan, ing:Debunking Some Confused Philosophical Attacks on the Income Forced Labor, and Taxation as Theft: Tax and property is not that one system takes but the other does not—it is in the and property is not that one system salience of the taking. of tax exceptionalism. These are first, three explanations for the persistence the sharing norms that underlie the tax that taxpayers have not internalized law; second, that cognitive to magnify the signif- biases predispose taxpayers the tax law; and third, that the pervasive- icance of the constraining effects of the tax law further magnifies the feeling ness of taxpayers’ encounters with reasons in turn. of difference. We address each of these the law of torts can both be seen as not only providing protection from certain both be seen as not only providing the law of torts can that be- as constraining or acting negligently) but also behavior (e.g., stealing negligently. By someone from either stealing or behaving havior—deterring criminal law and the that those fields of law address, constraining the behavior those who would or do engage inlaw of torts take from such behavior. liberty. Taxation “deprives humans of their natural that the law of property to make pay- in capital then permits civilization and the resulting investment the resulting forced labor. This is civili- ment for this deprivation and justify zation’s grand bargain.” F 680 ALR tor to the government in the absence of wrongdoing or the voluntary assump- or the voluntary absence of wrongdoing government in the tor to the results only apparent uniqueness However, that obligation. tion of a pecuniary has pointed D. Rosenberg As Professor Joshua of the transfer. from the salience and penalizing “by proscribing in this respect: is not actually unique out, tax law otherwise individuals who would ‘takes,’ both from every law certain behaviors, to engage in those and from those who continue engage in those behaviors, then pay the price.” behaviors and must all) fields of law is that the general public has not internalized the general all) fields of law is that the general Individuals routinely conform their be- norms that define income taxation. tort law, property law, and criminal law, havior to the norms of contract law, so; conforming seems consistent with scarcely noticing that they are doing do not distinguish between what they what they want to do anyway. They 41829-adm_71-4 Sheet No. 15 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 15 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 16 Side A 12/06/2019 13:58:53 AX , 157 T Generally, 70 681 681 Embracing the TBOR ) 11/26/19) 11:33 AM XCEPTIONAL E ELETE D OT OT ,N N One is the sharing of resources; the other One is the sharing of resources; the O 71 (D DOCX IFFERENT 2. :D AX T ME REVIEW ME _ Alice G. Abreu & Richard K. Greenstein, see ABREU GREENSTEIN ABREU 1281, 1303 (2017). 71.4_ Specifically, there are two sharing norms fundamental to taxation, neither Specifically, there are two sharing norms For example, we suspect that most people would say that they refrain would say that they that most people we suspect For example, 70.of a substantial part of ordinary behavior are speaking here by individuals; we We The tax law is not the only field of law that feels imposed from outside. law that feels imposed from outside. The tax law is not the only field of 71. that other fields of law, these norms most have previously argued that, unlike in We M K OTES behavior that conforms to the dictates of many areas of law does not usually to the dictates of many areas behavior that conforms values of those fields Most people have internalized the feel coerced by law. force compelling do not perceive the law as an external of law and therefore compliance with the contrast, tax law feels external and performance. By tax law feels coerced. of which is generally internalized. N 2019] in- Hence, two coincide. the because law requires what the to do and want non-neg- try to behave contractual obligations, generally abide by dividuals because they crimes and avoid committing property rights, ligently, respect is what they they believe it to do, not because is what they ought think that compelled to do. are legally not just or even pri- because it is morally wrong to kill, from killing others that most people refrain is illegal. Similarly, we suspect marily because it not because people’s property, or behaving negligently, from taking other pecuniary liability but could result in imprisonment or theft and negligence wrong. theft and negligence are morally because they believe ALR Environmental law, occupational health and safety law, and other forms of Environmental law, occupational health are also perceived by many as coercive. regulatory law that compel behavior one that is of broad, nearly universal Nevertheless, the tax law is the only going about the business of working application to individuals who are simply their loved ones. And even though the to support themselves and perhaps fields like environmental law may be difference between tax and regulatory is the sharing of private information. Because taxpayers have not internal- is the sharing of private information. a direct assault; when the tax system de- ized these norms, taxation feels like pecuniary resources and their private mands that taxpayers share both their and coercive. Even if people would information, the demands feel external others and information with the gov- find some way of sharing resources with such sharing would not take the regi- ernment in the absence of the tax law, and it with the tax law imposes, mented, formalized form that compliance amounts of private information would likely not require divulging substantial of both money and privacy there- to the government. The tax law’s taking fore feels extraordinarily coercive. recognize that different motivations might animate corporate or profit-driven behavior. recognize that different motivations might animate define income taxation have not generally been internalized by taxpayers. For further discus- define income taxation have not generally been sion of this topic, C Y 41829-adm_71-4 Sheet No. 16 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 16 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 16 Side B 12/06/2019 13:58:53 M K C Y that behavior [71:4 [71:4 EVIEW ) 11/26/19) 11:33 AM R AW ELETE L D OT N O 75 (D DOCX As Professor Rosenberg observes, “This behav- As Professor Rosenberg observes, “This 2. 74 DMINISTRATIVE DMINISTRATIVE A note 3, at 173–75 (citations omitted). ME REVIEW ME supra (e.g., performing work or realizing gain). That is, individ- (e.g., performing work or realizing gain). _ 72 73 This dissonance further reinforces the perception that tax col- This dissonance further reinforces 76 at 183 (emphasis in original). at 183 (emphasis at 183–85. at 183. Rosenberg, at n.67. Cognitive Biases—Magnifying the Differences Cognitive Biases—Magnifying See ABREU GREENSTEIN ABREU
.Id. .Id. .Id. .Id. .Id. 2. 71.4_ In addition, the payment of taxes is “removed from the actual In addition, the payment of taxes is This separation creates dissonance between the taxing and the earning. the taxing and the earning. This separation creates dissonance between Moreover, among the core social values most members of our society have members of our society social values most among the core Moreover, 72. We acknowledge that the coercion of tax law is different from the coercion We acknowledge that the coercion of 73 74 75 76 The salience of the coercive aspect of tax is exacerbated by various coercive aspect of tax is exacerbated The salience of the generates the tax” Psychological research suggests that such dissonance produces substantial Psychological research suggests that antagonism towards the perceived adaptive distortions and creates substantial punishment. 682 magnitude of such is of difference the degree of kind, and not degree one of of the tax law that the burden of application of breadth and depth in terms coercive. feels extraordinarily of ownership values of private are the embraced but internalized not only is a direct Income taxation personal information. and protection of property individuals not inter- those values. Thus, not only have external assault on of resources and norms that underlie tax (sharing nalized the two sharing the strongly internal- sharing norms also conflict with information), but those property and privacy. ized norms of private ALR lection, in contrast to the operation of other fields of law, is simply a lection, in contrast to the operation “taking” taxpayer. That perception, in turn, con- of what is “really” the property of the tributes to the belief that tax is exceptional. requiring the taxpayer to disgorge wealth of other fields of law. Tax coerces by dominion. It therefore constrains the over which the taxpayer has exercised uals perceive the earning of money as a distinct event that makes the amount uals perceive the earning of money as imposition of a tax as a subsequent event earned theirs, and they perceive the that takes what was theirs. ioral, or functional, separation leads us to perceive tax payments as punishment ioral, or functional, separation leads us for having succeeded financially.” cognitive biases. For example, the cognitive bias of loss aversion aggra- For example, the cognitive bias of cognitive biases. tax because it of the taking effected by the income vates the salience up something already possessed as causes individuals to perceive giving though the two things are econom- worse than never having had it, even ically equivalent. 41829-adm_71-4 Sheet No. 16 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 16 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 17 Side A 12/06/2019 13:58:53 fundamentally In our tax sys- 78 683 683 ) 11/26/19) 11:33 AM XCEPTIONAL E ELETE D OT OT ,N N O (D DOCX IFFERENT The concept is ability to pay. 2. :D 77 AX T ME REVIEW ME _ note 37, at 176. supra at 175. The Pervasiveness of Encounters with the Tax System The Pervasiveness of ABREU GREENSTEIN ABREU
. See id. 3. 71.4_ Some features of taxpayers’ encounters with tax law suggest a common- Some features of taxpayers’ encounters 77. Crane, 78 The impact of taxpayers’ failure to internalize the tax system’s underlying failure to internalize the tax The impact of taxpayers’ “born as a concept, not just as an As noted earlier, the income tax was M K tem, which privileges equity over administrability in this context, determin- tem, which privileges equity over administrability of many factors within the per- ing ability to pay necessitates consideration These must, in turn, be catalogued and sonal knowledge of the taxpayer. The result is a system that is nec- communicated to the taxing authorities. involuntary engagement with the gov- essarily intrusive; requires repetitive, in ways different from any other ernment; and therefore affects taxpayers field of law. as being so different from other sense account for why tax is experienced the time-consuming obligation to file fields of law. Those features include: interaction between taxpayers and annual returns, which compels regular the government; the imposition of a liability that requires an explicit transfer from the private to the public sector; the expression of the liability in dollars, to which are expressed in numbers, the determination of which would seem 2019] prom- to break the freedom law constrains Contract wealth. to retain freedom the freedom enemies; tort law, to, say, kill our law, the freedom ises; criminal is like other and so forth. So, tax harm others; that unreasonably to act in ways constrains in each field of law All law constrains; it also constrains. law in that the constraints it is true that goals. While ways, to serve particular particular criminal law imposed by the different from those by the tax law are imposed by the criminal law also true that the constraints imposed or by tort law, it is We have tried to by the law of torts, or contract. differ from those imposed tax law as perceive the constraints of the show that if taxpayers in human psychology, perception is grounded different—as exceptional—that law or its effects. not in the reality of ALR norms and of the cognitive biases that magnify the effect of these failures is cognitive biases that magnify the effect norms and of the encounters with the tax system. aggravated by the pervasiveness of taxpayers’ is an isolated or infrequent event. Neither paying taxes nor filing tax returns Income tax returns and never-ending. The burden of the tax law is repetitive exceeds a relatively small threshold, must be filed every year in which income extend to the period after death, if a and for the financially fortunate may federal estate tax return must be filed. raising revenue in the most politically administrative expedient aimed at congenial way possible.” C Y 41829-adm_71-4 Sheet No. 17 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 17 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 17 Side B 12/06/2019 13:58:53 , M K C Y ONGRESS C the much- 82 TO . EP .R NN .A the significant involve- the significant Multidisciplinary Practice and the Multidisciplinary 80 [71:4 [71:4 . 375, 382–85 (2018). DVOC A EV Id. EVIEW ) 11/26/19) 11:33 AM R .L.R AW ELETE AXPAYER EMP L D T L OT the proliferation of information report- the proliferation of ’ N 81 , 90 T AT O the contemporary pervasiveness of auto- pervasiveness contemporary the (D 79 ,2 N ,2 DOCX . 83, 110–12 (2000); John H. Matheson & Peter D. Favorite, & Peter . 83, 110–12 (2000); John H. Matheson 2. Tax Privacy DMINISTRATIVE DMINISTRATIVE EV A From Tax Collector to Fiscal Automaton: Demographic History of Federal From Tax Collector to Fiscal Automaton: L. R note 3, at 678–79. ME REVIEW ME _ , John S. Dzienkowski & Robert J. Peroni, supra ORDHAM . that accountants were often performing L.J. 577, 580–82 (2001). Concern See, e.g. HI Graetz, , 69 F ABREU GREENSTEIN ABREU .U.C .See OY 71.4_ 82. Thimmesch, B. Adam In short, tax law is complex, intrusive, and pervasive. Taxpayers are re- complex, intrusive, and pervasive. In short, tax law is lead to reification, to treating the ac- The intensity of this experience can 81. in the The line between the practice of tax law and accounting featured prominently 79 80. Eric A. San Juan, the same sort of work as lawyers regarding the determination or reporting of a client’s tax sort of work as lawyers regarding the determination the same 7525, extending the common law attorney-client liability led to the enactment of I.R.C. § privilege to all “federally authorized tax practitioner[s].” reviled girth and complexity of the Code and the related regulations; and the of the Code and the related reviled girth and complexity every taxpayer’s con- in political discourse. Furthermore, prominence of tax tax system is subject to even absence of contact) with the tact (or sometimes agencies: the IRS. by the most dreaded of all federal review and scrutiny enhancing the salience of con- minded of that with metronomic regularity, large a for that undeniable is of law. It trasts between tax and other fields the income tax system are dramatically segment of the public, encounters with of law. The alien quality of some of unlike their encounters with other fields norms (sharing of wealth and private the tax law’s most important underlying the cognitive biases triggered by encoun- information), the magnifying effect of effect of the pervasiveness of the ters with the tax system, and the reinforcing perception of tax as exceptional.tax system, combine to produce the cumulation of differences as a difference in kind. But that is a mistake. Tax ment of non-legally trained professionals (accountants) and even non-(accountants) and professionals non-legally trained ment of in the tax return preparers) and unregulated (enrolled agents professionals how much of uncertainty over which results in of the tax law, administration or something else) practice of law (rather than accounting tax practice is the of tax is law; and hence how much debate regarding the ethical ramifications of multidisciplinary practice at the end of the twen- of multidisciplinary debate regarding the ethical ramifications 11_VOL%202.pdf. tieth century. the Delivery of Legal Services in the Twenty- Approach to Regulating American Legal Profession: A Market First Century 1, 4–5 (2011), https://taxpayeradvocate.irs.gov/userfiles/file/IRS%20TAS%20ARC%2020 684 precision; mathematical require ALR Multidisciplinary Practice and the Future of the Legal Profession: Considering a Role for Independent Directors Multidisciplinary 32 L Income Tax Administration, 1913-2011 mation in tax administration, which requires operations that can be per- can be operations that which requires tax administration, mation in and uniformly; a machine, automatically formed by ing by third parties, which compels disclosure of private transactions to the which compels disclosure of private ing by third parties, of personal and explicit taxpayer consent; the invasion government without by the annual reporting requirement; fiscal privacy perpetrated 41829-adm_71-4 Sheet No. 17 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 17 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 18 Side A 12/06/2019 13:58:53 85 ? 87 685 685 note 61, at 4–5. supra XCEPTIONAL E ) 11/26/19) 11:33 AM Tax as Everylaw: Interpretation, Enforcement, XCEPTIONAL E ELETE D OT EALLY OT ,N Greenstein, R N To be sure, a review of legal scholarship To be sure, a review O See 84 (D AX . 493, 501 (2016) (explaining our concern that amongst T AW S DOCX IFFERENT L I 2. :D AX AX In this view of the matter, tax exceptionalism is noth- In this view of the
T note 2, at 1910–13. 83 , 69 T ME REVIEW ME II. _ supra at 1901. Zelenak, but specialists tend to hyper-inflate the significance of the difference but specialists tend to hyper-inflate ABREU GREENSTEIN ABREU 86 .See . See id. . See id. 71.4_ 83 The belief in tax exceptionalism may simply be a byproduct of vanity. of vanity. exceptionalism may simply be a byproduct The belief in tax 84 85 86. field of law is constituted by a unique the fact that every The differences derive from 87. Alice G. Abreu & Richard K. Greenstein, However, we think there is more to tax exceptionalism than the desire, tax exceptionalism However, we think there is more to M K configuration of social goals and values. and the Legitimacy of the IRS finds similar claims in other areas of law: patent exceptionalism, copyright in other areas of law: patent exceptionalism, finds similar claims amendment excep- law exceptionalism, first exceptionalism, immigration and prop- exceptionalism, bankruptcy exceptionalism, tionalism, antitrust So, tax exceptionalism might actually erty exceptionalism, among others. areas of law. Or as Professor Zelenak reflect one way that tax is just like other about tax exceptionalism.” has put it: “[T]here is nothing exceptional 2019] that not follow but it does ways, law in many fields of other from is different tax is inquiry, to which a different that requires exceptional. Determining that tax is defend the thesis Part, we proffer and In the next we now turn. exceptional. not really ALR Professor Lawrence Zelenak has suggested that tax exceptionalism is an illu- Zelenak has suggested that tax exceptionalism Professor Lawrence to feel special by claim- of tax professionals and scholars sion borne of a desire ing an exalted status. ing more than one instantiation of the more general phenomenon of instantiation of the more general ing more than one “subject-matter exceptionalism.” the reasons that we think it is important to refute tax exceptionalism is our belief that its pow- tax exceptionalism is our belief that its the reasons that we think it is important to refute erful influence on tax scholarship, administration, and adjudication threatens the legitimacy it). of the tax law and of the agency that administers Stated somewhat differently: All fields of law are different from one an- Stated somewhat differently: All fields other, between their field and other fields and consequently infer thatbetween their field and other fields theirs is dif- ferent in kind from the others. special or especially smart. That more shared by other professionals, to feel exceptionalism requires that tax law be is the implicit claim that tax law’s that apply in other areas of the immune from the jurisprudential techniques That implicit claim must be law—that is, that tax is objectively exceptional. a myth; it has impeded the development dissected, analyzed, and exposed as threatens the very legitimacy of the tax of a robust jurisprudence of tax and law and the agency that administers it. In this Part we describe three serious demand attention. arguments for tax exceptionalism that C Y 41829-adm_71-4 Sheet No. 18 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 18 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 18 Side B 12/06/2019 13:58:53 M K C Y [71:4 [71:4 EVIEW ) 11/26/19) 11:33 AM R Keeping our attention on the goal Keeping our attention on the goal AW ELETE L D OT N O Tax and Social Policy (D
A. DOCX 2. DMINISTRATIVE DMINISTRATIVE A social policies. Rather, it should pursue exclusively should pursue exclusively Rather, it social policies. no ME REVIEW ME _ of raising revenue will not answer that question because we can of raising revenue will not answer To answer the question, raise revenue by taxing different things. social policies. For ex- we must make a choice among competing ample, if we want to design the system around taxpayers’ ability to pay, we might choose to tax income. On the other hand, if we wish to promote the availability of resources for public use, we might choose to tax consumption. And if we decide to do both, we would produce a hybrid system, which is precisely what we have. Our point is not to pass judgment on the merits of hybridity What will the system tax?
1. ABREU GREENSTEIN ABREU 71.4_ Each of these arguments seems to point to the same conclusion: That tax seems to point to the same conclusion: Each of these arguments The first of these is an argument about tax and social policy. More pre- More social policy. tax and about argument is an first of these The One of the strongest arguments for tax exceptionalism is the claim that One of the strongest arguments for accepting the premise that the ideal The thought experiment begins by would have to answer a number of To design the ideal tax system, we the social policy-empty goal of raising revenue. The second argument is that The second argument of raising revenue. policy-empty goal the social toward obe- an unusual attitude taxation supports status of income the moral of the Code complexity is that the daunting The third argument dience. strictly interpreted understood as a compendium of rules, requires that it be law, which consist of plain meaning, unlike other fields of according to their both rules and standards. all other areas of law. must—be treated differently from law should—indeed, of law, should ideally insists that tax, alone among fields The first argument together sup- objectives. The second and third arguments avoid social policy Part we consider and hyper-clarity in the tax law. In this port a demand for for tax exceptionalism. counter these arguments 686 ALR cisely, it is the position noted in Part II.B that tax—uniquely in Part II.B that the position noted cisely, it is fields of among pursue law—should the only proper goal of tax law is raising revenue and that tax law should not the only proper goal of tax law is raising this claim is true, then tax is fundamen- pursue substantive social policies. If law because law generally regulates hu- tally different from all other fields of substantive social policies. But this claim man behavior or otherwise pursues reveals why. is incorrect, and a thought experiment with raising revenue. That is, tax system should be concerned exclusively with pursuing substantive social the ideal tax system should not be concerned or taking care of the poor or facili- policies like promoting home ownership What would such an ideal tax system tating the development of clean energy. look like? specific questions: 41829-adm_71-4 Sheet No. 18 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 18 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 19 Side A 12/06/2019 13:58:53 An- L.J. 1717, 1725 UKE If we cannot do Vertical equity 88 , 63 D 687 687 ) 11/26/19) 11:33 AM XCEPTIONAL E ELETE D OT OT ,N N But keeping our eye fixed on the goal of But keeping our O Decades ago, Boris Bittker demonstrated ago, Boris Bittker Decades 89 (D DOCX IFFERENT 2. Administering the Tax System We Have Administering the Tax System We :D AX T note 54. ME REVIEW ME _ supra all three simultaneously, we must choose among them in order to we must choose among them all three simultaneously, design the tax system. versus purity but rather to point out that keeping our eye fixed on our eye fixed keeping out that to point but rather purity versus whether we choose does not determine raising revenue the goal of the two. Decisions or a mixture of consumption, to tax income, determine that. of social policy be taxed? Who will and all married cou- individuals alike to treat all that it is impossible have a progressive tax system. ples alike and still Will the ideal tax system reflect horizontal equity? Will the ideal tax system reflect means taxing based on the ability to pay, but that does not neces- means taxing based on the ability to increase as ability to pay sarily mean that rate of taxation should direct proportion to ability to increases; instead, we could tax in tax burdens as ability to pay pay or even regressively, increasing the goal of raising revenue decreases. Keeping our eye fixed on considerations not directly does not determine that choice. Policy play, e.g., promoting invest- related to raising revenue come into subsistence. More generally, ment or insuring a minimum level of among different competing the choice of rate structure is a choice visions of what a just society looks like. what a just consideration of swering that question again requires is yes. That will mean that society looks like. Suppose the answer But taxing similarly taxed. similarly situated taxpayers should be requires a determination of similarly situated taxpayers similarly similar. If income is the tax what it means for two taxpayers to be $100 of wages like an base, is a working taxpayer who receives $100 of welfare benefits? If impoverished taxpayer who receives consumption is the tax base, is a taxpayer who consumes $100 of food like one who consumes $100 of manicures? Furthermore, is What will the rate structure look like? What will the rate structure raising revenue does not determine that choice. Instead, we must not determine that choice. Instead, raising revenue does to sacrifice. policy goal or goals we are willing decide which social taxation of favors progressivity over the equal The current system penalties couples, creating the marriage individuals and married as to many so familiar to tax scholars, as well and marriage bonuses and mak- are possible point is that other choices taxpayers. But the deciding among competing social policies. ing them requires Bittker, Kristin E. Hickman,


2. 4. 3. ABREU GREENSTEIN ABREU .See .See 71.4_ 88 89 M K (2014) (“Congress seems doomed to choose between disfavoring single individuals or married tax rate brackets and the standard deduction.”). the income couples in determining 2019] ALR C Y 41829-adm_71-4 Sheet No. 19 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 19 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 19 Side B 12/06/2019 13:58:53 M K C Y ATHWAYS TO ,P A Reconsideration of URREY S. S [71:4 [71:4 While the concept of tax 91 TANLEY EVIEW 90 ) 11/26/19) 11:33 AM R AW ELETE L D OT N O (D DOCX 2. DMINISTRATIVE DMINISTRATIVE A note 61, at 30 (“[L]aw is social values all the way down.”). ME REVIEW ME supra _ , JCX-37-08, at 2–3 (2008) (citing S 6 (1973)). a taxpayer who consumes $100 of vegetables like one who con- one who like of vegetables $100 consumes who a taxpayer eye fixed on the goal Keeping our of sugary drinks? sumes $100 like these. Rather, answer questions revenue does not of raising social policies. among different depend on choices the answers Greenstein, ABREU GREENSTEIN ABREU EFORM .See R 71.4_ As we first suggested in Part II, Professor Surrey’s development of the con- As we first suggested in Part II, Professor 90 91. two functions, lodging taxing in the Perhaps because Congress itself separates those This thought experiment was designed to test a powerful argument for tax was designed to test a powerful This thought experiment And once those decisions are made, we are not done. Even if we decide not done. Even if made, we are those decisions are And once AX Tax Expenditure Analysis cept of tax expenditures had the effect of conceptually dividing the tax law cept of tax expenditures had the effect provisions. into taxing provisions and spending T 688 ALR Ways and Means Committee and spending in the Appropriations and Means Committee, Professor Sur- Ways rey’s insight resonated with many and was enshrined in legislation that requires the annual production of the Tax Expenditure Budget. Joint Committee on Taxation, to treat wages like welfare benefits (or not) or to treat food like manicures (or to treat food like (or not) or like welfare benefits to treat wages food, and mani- to decide what counts as wages, welfare, not), we still need our attention on the decide any of these things? Fixing cures. How do we will not answer these questions. goal of raising revenue raising revenue. with tax should be concerned solely exceptionalism: That goal of raising revenue be apparent: It is not that the The conclusion should there are many, many design of the tax system; it is that is irrelevant to the those who design the If raising revenue is the goal, ways of raising revenue. thought experiment how to achieve it. We began our tax system must decide only with raising rev- system designers were concerned by assuming that tax social policies (promoting home own- enue and not with pursuing substantive the development of clean energy, ership, taking care of the poor, facilitating it is impossible to pursue exclusively and the like). But we have shown that this goal requires choices among com- the goal of raising revenue. Achieving social values, or among competing peting social policies, among competing then raising revenue cannot be disen- visions of a just society. If that is true, visions. gaged from those polices, values, and expenditures has proven analytically useful, if not uncontroversial, we believe expenditures has proven analytically of social values as features of spend- it also created a path to the segregation It is this segregation that we attack, for ing, and by extension, not of taxing. taxation is only about raising revenue, it has contributed to the notion that exceptional. But as we have shown, and because of that, tax law is objectively revenue. Whether tax expenditures are, tax can never be just about raising system, social values underlie provisions or are not, a proper part of the tax that would not be classified as tax expenditures. 41829-adm_71-4 Sheet No. 19 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 19 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 20 Side A 12/06/2019 13:58:53 , 46 689 689 93 was whether the penalty was whether Sebelius ) 11/26/19) 11:33 AM XCEPTIONAL E Deadweight Costs and the Size of Government ELETE D OT of cigarettes, not just to raise more money, money, just to raise more of cigarettes, not National Federation Independent Business v. Business Independent Federation National OT ,N N O (D The Demand for Hyper-Clarity DOCX IFFERENT 2.
:D B. AX T we believe that its significance goes well beyond that. well beyond that. we believe that its significance goes ME REVIEW ME _ 95

foster the growth of domestic industry. . . . (“the taxing power is often, industry. . . . (“the taxing foster the growth of domestic . 293, 299 (2003) (defining the cost of any tax as the sum of tax revenue and the Although this statement could easily be dismissed as a simple re- Although this statement could easily Gary S. Becker & Casey B. Mulligan, Gary S. Becker & Casey B. Mulligan, at 567 (citations omitted). (citing Sonzinsky v. United States, 300 U.S. 506, 513 (1937)). the Court struck a crucial blow for the notion that tax is concerned that tax is concerned blow for the notion struck a crucial the Court 94 92 , CON ABREU GREENSTEIN ABREU .Id. .See .Id. &E 71.4_ As we noted in Part II, the marriage of tax to economics has produced As we noted in Part II, the marriage 94 95 92.(2012). 567 U.S. 519, 530–32 93 The Court concluded this passage with a sweeping claim: “Indeed, The Court concluded this passage The Supreme Court agrees. In agrees. Court Supreme The designed to it is plainly will raise considerable revenue, Although the payment expand influence conduct are to But taxes that seek health insurance coverage. nothing new. of imported manufactured sought to deter the purchase Some of our earliest federal taxes goods in order to Today, federal and other purposes, than revenue”). very often, applied for state taxes retail price than half the more can compose but to encourage people to quit smoking. And we have upheld such obviously regulatory And we have upheld smoking. to quit but to encourage people and sawed-off shotguns. taxes on selling marijuana measures as M K assessed for an individual’s failure to comply with the so-called individual with the so-called failure to comply for an individual’s assessed as a be properly interpreted Care Act could under the Affordable mandate power. In of Congress’ taxing permissible scope fall within the tax and thus with the argument that the Court engaged directly answering that question, instituted principally to raise revenue: the penalty was not with more than raising revenue. The issue in The issue in than raising revenue. with more what Professor Crane has described as an “aspiration toward rational per- “aspiration as an what Professor Crane has described to hyper-clarity. That, in turn, fection”—what we have called an aspiration for rules. It has resulted in the view has produced a normative preference By acknowledging the inevitability of the connection between taxation and By acknowledging the inevitability that an exaction motivated primarily or its effect on conduct and concluding is indeed a tax, the Court confirmed even exclusively by its effect on conduct raising revenue. Moreover, because that taxation is not exclusively about unconstitutionality, it gives the resultant this confirmation repelled a claim of more than the raising of revenueview of taxation as an activity embracing the stamp of constitutional legitimacy. Sebelius phrasing of the observation frequently made by economists that every tax has phrasing of the observation frequently a deadweight cost, 2019] ALR ‘[e]very tax is in some measure regulatory. To some extent it interposes an ‘[e]very tax is in some measure regulatory. taxed as compared with others not economic impediment to the activity taxed.’” deadweight cost of taxes). J.L. C Y 41829-adm_71-4 Sheet No. 20 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 20 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 20 Side B 12/06/2019 13:58:53 M K C Y . 477, 480 (2016). AW L [71:4 [71:4 AX 98 EVIEW , 69 T ) 11/26/19) 11:33 AM R Moreover, the kind of capacious Moreover, the kind 97 AW ELETE L D OT N O (D Sometimes, when Congress does not provide does not provide when Congress Sometimes, DOCX 2. 96 DMINISTRATIVE DMINISTRATIVE A We believe that this view of tax is pervasive and pro- We believe that this view of tax is 99 ME REVIEW ME _ 2016 Erwin Griswold Lecture Before the American College of Tax Counsel, Stroke 2016 Erwin Griswold Lecture Before the American , I.R.C. § 132, Pub. L. 98-369, div. A, title V, § 531(a)(1), July 18, 1984, 98 div. A, title V, § 98-369, 132, Pub. L. , I.R.C. § , 26 U.S.C. § 336(e) (2012) (stating that “certain stock sales and distributionsmay e.g. , ABREU GREENSTEIN ABREU .See . e.g. See, 71.4_ 98. Emily Parker, 97 For example, giving the 2016 Griswold Lecture before the American Col- the 2016 Griswold Lecture before For example, giving Contemporary tax legislation reflects the influence of this quest for hyper- of this quest reflects the influence tax legislation Contemporary We doubt that many tax lawyers would disagree with Parker’s observa- We doubt that many tax lawyers would 96 Our tax system is governed by rules, not by individual, subjective judgments of tax tax system Our policy, equity, or even logic. . . be able to rely on the tax lawyers must . Taxpayers and If tax consequences are statutes, regulations, and other IRS pronouncements. lawyers will then both taxpayers and tax unpredictable and tax challenges are random, can, with confidence, reasonably predict develop disdain for the tax system. If no one goes. the outcome of a tax issue or case, then anything 99. Clay Prods., 324 F.2d 7, 12 (5th Cir. 1963). Our thanks United States v. Henderson of the Scrivener’s Pen: The Role of a Tax Planner and Litigator be treated as asset transfers” based on regulations prescribed by the Secretary of the Treasury). prescribed by the Secretary of the Treasury). be treated as asset transfers” based on regulations Stat. 877 (1984). This was added to the code in 1984 in an effort to systematize the tax treat- Stat. 877 (1984). This was added to the code from rules about the fringe benefit excludable highly articulated of fringe benefits with ment tests is defined in very specific ways and non-discrimination “employee” The term income. are applied for some purposes but not for others. lege of Tax Counsel, Emily Parker, then managing partner of Thompson & Emily Parker, then managing partner lege of Tax Counsel, observed that: Acting Chief Counsel of the IRS, Knight and formerly judicial interpretations acceptable in the early days of the tax law have be- acceptable in the early days of judicial interpretations rare exceptions, tax among tax professionals. With come objects of derision inheres in formulations not accept the indeterminacy that commentators do generosity”— its fullness” or “detached and disinterested such as “life in all that characterizes other fields of law. an indeterminacy the detailed rules, it directs the Department of Treasury to provide them by it directs the Department of Treasury the detailed rules, regulatory authority. explicitly delegating 690 at best undesirable are and circumstances on facts based in tax, analyses that (e.g., deter- be hyper-clear they can never illegitimate because and at worst ordinary and necessary). expenses are mining what that attempt with detailed rules and replete being highly articulated clarity by a crisp blueprint. to create ALR tions. The idea that tax law is especially governed by rules is also captured tions. The idea that tax law is especially law is law unto itself. There are no in Judge Wisdom’s assertion that “Tax equities in tax law.” ceeds from the deep association of tax with raising revenue and, hence, with ceeds from the deep association of tax in Part II.C, taxpayers expect tax law to economics. Moreover, as we noted This expectation of hyper-clarity differs be clear, certain, and predictable. fields of law and has contributed to from what taxpayers expect from other the sense that tax is exceptional. to Emily Parker for quoting Judge Wisdom in her Griswold Lecture. Parker for quoting Judge Wisdom to Emily 41829-adm_71-4 Sheet No. 20 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 20 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 21 Side A 12/06/2019 13:58:53 , Y ’ OL So- .P 101 382 (Tal- UB .P UR E Political Legitimacy , 4 J. RGANIZATION O 691 691 Fabienne Peter, CONOMIC E ) 11/26/19) 11:33 AM XCEPTIONAL the text resonate with Fritz Scharpf's dis- the text resonate with E . 819, 832 (2002) (“[L]egitimacy ultimately ELETE See generally D OT EV OT ,N N OCIAL AND S O .L.R (D Legitimacy and the Right of Revolution: The Role of Tax Protests Legitimacy and the Right of Revolution: The Role of UFF A particular law, as well as an entire code of A particular law, as well as an entire DOCX IFFERENT 2. 102 HEORY OF :D , 50 B . (Edward N. Zalta, Spring ed. 2014), http://plato.stanford.edu . (Edward N. Zalta, Spring ed. T AX HIL T HE P ME REVIEW ME _ ,T Economic Integration, Democracy and the Welfare State Economic Integration, Democracy and the Welfare EBER W Marjorie E. Kornhauser, Marjorie This is sociological legitimacy, i.e., legitimacy in the sense of the This is sociological legitimacy, i.e., AX The Normative Argument for Hyper-Clarity: Legitimacy The Normative Argument 100 NCYCLOPEDIA OF ABREU GREENSTEIN ABREU
.See .E 1. 71.4_ 102. discussed in categories of legitimacy The 101 100. M Taxpayers expect the tax law to be clear, certain, and predictable for both for and predictable certain, be clear, law to the tax expect Taxpayers Successful administration of the tax law requires a substantial degree of of the tax law requires a substantial Successful administration Fritz W. Scharpf, W. Fritz M K TAN law’s being perceived as legitimate by the members of the community. law’s being perceived as legitimate by ciological legitimacy could result if the community perceives the law as legit- ciological legitimacy could result if the promulgated (“proper promulga- imate either because it has been properly widely accepted in the community tion”) or because it reflects moral norms (“accepted moral norms”). 18, 19 (1997). However, they contrast with a different, commonly employed classification, employed commonly a different, they contrast with 18, 19 (1997). However, viz., a distinction between “descriptive” and “normative” concepts of legitimacy, wherein the latter in objective standards and the grounded in the perceptions of the community is former for legitimacy independent of those perceptions. 2019] ALR tinction between the contribution of “inputs” and “outputs” to “democratic legitimacy.” legitimacy.” and “outputs” to “democratic tinction between the contribution of “inputs” See rests on the populace’s beliefs and attitudes . . . .”). rests on the populace’s beliefs and attitudes normative and structural reasons. The normative reason is that clarity, cer- reason is that The normative and structural reasons. normative tax system. legitimacy of the necessary for the predictability are tainty, and Because the of the Code. the complexity reason involves The structural taxpayers system, ours is a self-assessment complex, and because Code is so comply with in order to and predictability need clarity, certainty, believe they clarity, whether it instance. And tax administrators need the law in the first that they can admin- or is generated by the agency, so comes from the Code taxpayers of their tax and efficiently, properly informing ister the law fairly normative and struc- next subsections we address these obligations. In the hyper-clarity. and then we present the case against tural considerations, /archives/spr2014/entries/legitimacy/ (last visited Nov. 5, 2019). In our account, normative /archives/spr2014/entries/legitimacy/ (last visited is itself anchored in community standards and is, therefore, a legitimacy (including moral) subset of descriptive legitimacy. and Anti-Tax Rhetoric in America cott Parsons ed., A.M. Henderson & Talcott Parsons trans., Free Press 1964). cott Parsons ed., A.M. laws or an entire legal system, could be perceived as legitimate on either the laws or an entire legal system, could accepted moral norms ground, or both.proper promulgation ground or the S voluntary compliance. That compliance, in turn, depends on the system be- That compliance, in turn, depends voluntary compliance. Weber coined the term “Legit- ing perceived as legitimate. Max of legitimacy that produces com- imitätsglaube” to describe the perception pliance. C Y 41829-adm_71-4 Sheet No. 21 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 21 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 21 Side B 12/06/2019 13:58:53 M K C Y These 3, 7 (2014). 107 (Nov. 6, 2014), URVEY S GOV . OU 106 , Y TTITUDE A [71:4 [71:4 EVIEW AXPAYER ) 11/26/19) 11:33 AM R AW para. 2, 19 (U.S. 1776). ELETE L D , 2014 T OT N O OARD (D B DOCX NDEPENDENCE I 2. note 101, at 824–25. DMINISTRATIVE DMINISTRATIVE A VERSIGHT O supra ME REVIEW ME Unlike Americans, Brits Think Taxation Is Moral _ IRS See According to our “origin story,” the American Revolutionary According to our “origin story,” the ECLARATION OF (arguing that the British tax was illegitimate on both of the grounds discussed (arguing that the British tax was illegitimate D 104 Kornhauser, HE By contrast, criminal law and tort law are perceived as legitimate law and tort law are perceived By contrast, criminal As our Declaration of Independence explains: As our Declaration of Independence ABREU GREENSTEIN ABREU 103 . See id. .See 105 71.4_ 106. T 105 107. Moore, Peter The failure to view tax as reflecting accepted moral norms resonates, of tax as reflecting accepted moral The failure to view This antipathy continues to be reflected in contemporary attitudes toward This antipathy continues to be reflected than rather so, do to duty a feel they because 103. law tax the with comply taxpayers That The history of the present King of Great Britain is a history of repeated injuries and is a history of repeated injuries and The history of the present King of Great Britain of an absolute Tyranny over establishment usurpations, all having in direct object the has He . . . to a candid world. submitted these States. To prove this, let Facts be foreign to our constitution, and with others to subject us to a jurisdiction combined Acts of pretended Assent to their unacknowledged by our laws; giving his . . . . Taxes on us without our Consent Legislation: . . . imposing With the exception of some tax protesters, taxpayers do not generally generally not do taxpayers protesters, some tax of the exception With 104 earlier. It did not reflect accepted moral norms because it was discriminatory, and it was not because it was discriminatory, norms earlier. It did not reflect accepted moral properly promulgated: “no taxation without representation”). both because they were properly promulgated and because their commands, were properly promulgated and because both because they norms. Individuals permissions reflect widely held moral proscriptions, and just because properly stealing or behaving negligently do not refrain from because widely proscribe it, but also, and significantly, promulgated laws proscribe it. held moral norms the United States, our events in American history. In course, with important is anchored in our of fairness with respect to taxation awareness of the issue Revolution. 692 ALR taxation. For example, a recent poll found that as between two moral argu- taxation. For example, a recent poll selected the argument, “People have a ments about tax, 53% of Americans the stronger, while 37% chose the argu- right to keep money they earn” as money to public services.” ment, “People have a duty to contribute question that the tax law has been properly promulgated. Therefore, the tax Therefore, been properly promulgated. that the tax law has question On the promulgation ground. on the proper as legitimate law is regarded not internal- taxpayers have in Part II.C, most as we discussed other hand, the tax Therefore, although underlie the tax law. norms that ized the moral for many proper promulgation, because of sociological legitimacy law enjoys of the tax law’s legiti- promulgation is the only source taxpayers that proper macy. because it is the right thing to do is supported by a finding in a 2014 survey of U.S. adults that “94% because it is the right thing to do is supported by who their fair share of taxes, which includes 71% agree it is every American’s civic duty to pay ‘completely’ agree.” War was fought in significant part because of objection and resistance to War was fought in significant part tax impositions on the American colo- King George III’s discriminatory nies. 41829-adm_71-4 Sheet No. 21 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 21 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 22 Side A 12/06/2019 13:58:53 109 693 693 Tax Consumption, Not Income, Ways and and Tax Consumption, Not Income, Ways Hence, the sociological legiti- Hence, ) 11/26/19) 11:33 AM XCEPTIONAL 108 E ELETE D OT OT ,N N O (D (May 15, 1995), https://www.deseret.com/1995/5 DOCX IFFERENT 2. EWS N :D AX T ME REVIEW ME _ ESERET ,D , Jack Anderson & Michael Binstein, , Jack Anderson & Michael e.g. , The Structural Argument for Hyper-Clarity: Complexity The Structural Argument for Hyper-Clarity: ABREU GREENSTEIN ABREU
.See 2. 71.4_ 108 The limited legitimacy of the tax law has significant implications for how implications tax law has significant legitimacy of the The limited 109. to the legal pro- approach a toeing-the-line For example, most people do not adopt Not only does the demand for hyper-clarity follow from the absence of Not only does the demand for hyper-clarity M K Means Chief Urges /15/19175499/tax-consumption-not-income-ways-and-means-chief-urges. https://yougov.co.uk/news/2014/11/06/unlike-brits-americans-dont-think-tax-morally-ri of people who do significant numbers is not that there are not gh/. Accordingly, our claim only that deep and widespread controversy on accept the moral legitimacy of tax laws, but of moral legitimacy of, say, laws against homicide. that point prevents tax from having the kind 2019] areas unlike many above: we made the point with consistent results are poll been widely tax have not support the income moral norms that of law, the public. among the taxpaying internalized ALR macy of the tax law depends primarily on the legitimacy of the process by legitimacy of the primarily on the the tax law depends macy of been promulgated. which it has of the tax law depends obeyed. Because the legitimacy the tax law will be taxpayers will pay, but of its promulgation, most primarily on the lawfulness moral value justifies to avoid violating the law. No only what is necessary taxes, but not a penny attitude—that we should pay our anything more. This that the Code be clear, certain, and legally due—demands more than what is by a scientific, rational are precisely the goals facilitated predictable. Those It is therefore not sur- tax law along economic lines. construction of income a clamor for rules that there is a desire for hyper-clarity, prising that in tax law carry and an insistence that the tax appear unambiguous, of a “burden of a moral imper- on other fields of law. The absence perfection” not placed a heightened desire for precision in ative for compliance therefore produces with it material costs (loss of property, the law itself. When obedience carries no moral stigma, there is little in- autonomy, etc.) but disobedience carries to avoid punishment. centive to obey beyond what is necessary hibition of homicide. Their ordinary large behavior stays well clear of homicidal conduct—in part because of the moral opprobrium that attaches to killing other human beings. Accord- that we see the definition of homicide for the kind of precision in ingly, there is no demand for with respect to definitions in the income tax system (even though the potential punishment is extraordinarily greater than for violating the tax law).homicide significant moral legitimacy in the tax law, but it is abetted by the structure significant moral legitimacy in the tax between the need for a clear, precise of the Code, which creates a tension the Code. As currently configured, the system and the actual complexity of on the taxpayers as well as on tax tax system places important responsibilities detailed and accurate reports to the administrators. Taxpayers must make C Y 41829-adm_71-4 Sheet No. 22 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 22 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 22 Side B 12/06/2019 13:58:53 M K see 110 C Y supra ASON .M EO Zelenak, see , 2 G and allow the system to [71:4 [71:4 113 EVIEW ) 11/26/19) 11:33 AM R es significant burdens on business and other AW ELETE L D OT N O (D DOCX 2. DMINISTRATIVE DMINISTRATIVE A Complexity poses the danger of miscalculation—ei- ME REVIEW ME 112 _ Tax Complexity, Reform, and the Illusions of Tax Simplification Tax Complexity, Reform, and the Illusions of Tax The self-assessment feature of our tax system requires that the feature of our tax system requires The self-assessment . 319, 322–24 (1994). 111 EV ABREU GREENSTEIN ABREU .L.R 71.4_ 113. § 63(c) (2019). I.R.C. 110. also impos recognize that the tax law We But taxpayers’ and tax administrators’ need for clarity, certainty, and pre- But taxpayers’ and tax administrators’ The complexity of the tax law also places a burden on tax administrators, on tax administrators, law also places a burden of the tax The complexity 111. § 7803(a)(3)(A) (2019). I.R.C. 112. cita- that a comprehensive complexity has been written about the Code’s So much NDEP Sheldon D. Pollack, ther because a crucial component of a tax formula is overlooked or because ther because a crucial component of For although some provisions of the the Code’s meaning is misunderstood. (the provisions prescribing the standard Code are simple, precise, and clear to mind) deduction and the rate structure come I 694 subject to and sometimes of perjury penalty under often government, federal or nonfeasance.liability for malfeasance criminal therefore imposes The law the law is, and determine what first instance, to the need, in the on taxpayers financial situation. of a particular individual’s law to the facts to apply that ALR entities as well, but we are restricting our discussion here to individuals because the burden entities as well, but we are restricting our discussion whether employees, independent contractors, or on them is the most onerous. Individuals, the position to retain the services of profes- be in owners of small businesses, are least likely to of the law to their specific situation absent sionals to advise them on the correct application individuals who are not entrepreneurs, such with the tax law. Moreover, the need to comply federal statute in order to be able to simply as employees, would not have to master a complex the most outsized burden on them. Fed- imposes earn a living; hence the federal income tax may affect small businesses, but only when they eral labor and environmental protection laws By contrast, the federal income tax has reach a certain size or engage in specific activities. activity.size or kind of commercial widespread application, regardless of note 2, at For a historical account of the increasing complexity of the Code, 1906–08. content of the law be conveyed to and understood by average individuals be conveyed to and understood content of the law and their fam- their lives and providing for themselves who are simply living the tax administrator’silies. Thus, it becomes explain the tax law to job to that understanding, that they can understand. Absent taxpayers in a way hence inconsistent with the tax law as arbitrary and taxpayers will experience that ground That, in turn, would further undermine accepted moral norms. legitimacy. for the tax law’s sociological the notorious complexity of the Inter- dictability in tax law is in tension with nal Revenue Code. whose audience is taxpayers who depend on the administrators to inform taxpayers who depend on the administrators whose audience is a statutory right to be Indeed, taxpayers have them of their tax obligations. informed. No field of law places that type of burden on individuals. individuals. type of burden on law places that No field of tion would eclipse the rest of this essay. Nevertheless, for an accurate and amusing synopsis tion would eclipse the rest of this essay. Nevertheless, for an accurate and amusing synopsis arguing that it is mostly “non-tax people” who see tax as unusually complex, 41829-adm_71-4 Sheet No. 22 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 22 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 23 Side A 12/06/2019 13:58:53 see In 114 465 (1935); . 118 . 860 (1999). note 5, at 59–60. EV 293 U.S . L. Rev. 1175, 1183– supra HI .L.R , HI aff’d, 695 695 C , 56 U. C , 66 U. Indeed, the complexity of the Indeed, the complexity ) 11/26/19) 11:33 AM XCEPTIONAL 116 E ELETE and second, interpreting those rules and second, interpreting D OT 115 OT ,N N O (D DOCX Formalism in the Tax Law IFFERENT 2. The Rule of Law as the Law of Standards :D The Rule of Law as a Law of Rules AX T ME REVIEW ME _ note 98, at 480. supra , I.R.C. § 199A. Emily Parker’s observation that “[o]ur tax system is governed Emily Parker’s observation that “[o]ur 117 Antonin Scalia, David A. Weisbach, David A. Weisbach, ABREU GREENSTEIN ABREU .See . e.g. See, .See The “Miss Elizabeth” D. Leckie Scholarship Fund v. Comm’r, 87 T.C. 251, 260 (1986) Elizabeth” D. Leckie Scholarship Fund v. Comm’r, 87 T.C. 251, 260 (1986) The “Miss 71.4_ In addition, the need to reduce tax liability to dollar amounts thatIn addition, the need to reduce tax can be 116 Taxpayers and third-party payors often address the tension between the payors often address the Taxpayers and third-party 114 115 118. Parker, 117. 69 F.2d 809, 810 (2d Cir. 1934), v. Gregory, Helvering M K reported on a specific line in a specific form lures taxpayers into falsely believ- reported on a specific line in a specific is an exercise in binary, rule-based ing that the determination of tax liability precise and uniquely correct number. decisionmaking that can produce a legitimacy discussed above, these struc- Like the considerations concerning that the income tax law be clear, tural considerations exacerbate the demand those goals would seemingly be facilitated certain, and predictable. Achieving of income tax law along economic lines. by a scientific, rational construction addition to the complexity of specific sections, the way in which the provi- the way in which of specific sections, to the complexity addition as a whole. of the system increases the complexity exponentially sions interact imprecise, and the Code makes the entire system unclear, The complexity of indeterminate. one hand, and the certainty, and predictability, on the need for clarity, by employing tax pro- complexity, on the other hand, Code’s confounding recently, tax preparation software.fessionals or, more An even more seduc- first conceiving tension involves a two-pronged strategy: tive response to this of rules, the Code as a compendium 2019] of many predictability, and transparency with function provisions Code’s the special rules qualifications and have layers of complex. They are exceedingly sub- and paragraphs, have not only subsections, sections that that produce sub-sub-sub paragraphs. paragraphs and but also sub-sub paragraphs, ALR strictly in terms of their “plain meaning.” strictly in terms of by rules, not by individual, subjective judgments of tax policy, equity, or even by rules, not by individual, subjective interpretationlogic,” captures this attitude toward of the Code. 84 (1989); Abreu & Greenstein, see also a statute is clear on its face, especially when that statute is part of a complex set of (“Where we require unequivocal evidence of specificity, statutory provisions marked by a high degree so as to override the plain meaning of the of legislative purpose before construing the statute a majority of the Supreme Court arguably words used therein.”). For a recent example where found just such evidence, much to the consternation of Justices Scalia, Alito, and Thomas, King v. Burwell, 135 S. Ct. 2480 (2015). Code alone makes interpreting the statutory text in terms of its plain meaning interpreting the statutory text in terms Code alone makes Learned Hand explained: “[A]s the seem particularly attractive. As Judge the room for interpretation must con- articulation of a statute increases, tract . . . .” C Y 41829-adm_71-4 Sheet No. 23 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 23 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 23 Side B 12/06/2019 13:58:53 M K C Y def- 126 We will 120 Helvering v. Morgan’s Helvering v. Morgan’s . 295 (2011). EV the Court has preferred the Court has preferred R [71:4 [71:4 legislative purpose, 124 , AX 125 .T EVIEW LA ) 11/26/19) 11:33 AM Income tax doctrine appropri- Income tax doctrine R Mayo Foundation for Medical Educa- Mayo Foundation for 119 AW the Court rejected the University’s the Court rejected the University’s ELETE 122 , 11 F L , D OT 128 King v. Burwell N and values rooted in public policy, the and values rooted in public policy, O 127 (D Bob Jones and Defining Income DOCX 123 , 2. DMINISTRATIVE DMINISTRATIVE A ME REVIEW ME , 461 U.S. at 602–03. , 461 U.S. at 600. _ , 293 U.S. at 126–27. , 562 U.S. at 56–57. Abreu & Greenstein, The Case against Hyper-Clarity Hyper-Clarity against The Case Bob Jones University v. United States Bob Jones University ABREU GREENSTEIN ABREU
.See .Bob Jones Univ. Jones .Mayo .Bob . See id. . Inc. Morgan’s . Jones Univ. Bob 3. 121 , 71.4_ 119 127 128 120 121. 121 (1934). 293 U.S. 122. 574 (1983). 461 U.S. 123. 44 (2011). 562 U.S. 124. 135 S. Ct. 2480 (2015). 125 126 Why has the Court implicitly rejected the normative and structural argu- Why has the Court implicitly rejected Our point is that the Court in these cases has treated the Internal Revenue Our point is that the Court in these Nevertheless, we must note that the Supreme Court agrees with us. In- agrees with must note that the Supreme Court Nevertheless, we As we explained above, the demand that the tax law be hyper-clear sup- tax law be hyper-clear demand that the above, the As we explained tion & Research v. United States tion & Research v. United 696 ALR common law, and the Constitution. ately makes wide use of standards. Indeed, its most central concept—in- use of standards. Indeed, its most ately makes wide a standard. not by an unambiguous rule, but by come—is defined Code just like any other statute. Rather than reflexively regarding the Code Code just like any other statute. Rather of Code provisions to hyper- as exceptional and limiting its interpretation to the Code the ordinary principles clear rules, the Court has instead applied reaching outside the statutory text for of statutory interpretation, sometimes interpretive aids. as hyper-clear rules? Our an- ments for treating Code provisions exclusively costs to treating the Code as consisting swer is that there are serious potential only of rules. For example, in 501(c)(3) should be derived from its plain argument that the meaning of § readings of the Code that find its provisions ambiguous and then has resolved readings of the Code that find its provisions history, those ambiguities by invoking legislative not rehearse those arguments here. not rehearse those read Code provisions repeatedly resisted opportunities to deed, the Court has On the contrary, in cases like as unambiguous rules. Inc. erence to agency interpretation, ports a particular manifestation of tax exceptionalism; namely, the view that namely, of tax exceptionalism; manifestation ports a particular interpreted which are to be unambiguous rules, consist only of tax should at length in as we have argued meaning. But terms of their plain strictly in consists or should con- the idea that the income tax our previous scholarship, rules is incorrect. sist of strictly construed 41829-adm_71-4 Sheet No. 23 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 23 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 24 Side A 12/06/2019 13:58:53 130 NCYCLOPEDIA OF . E TAN S 697 697 HE , T XCEPTIONAL ) 11/26/19) 11:33 AM E XCEPTIONAL
E ELETE Sorites Paradox D OT 131 . OT ,N N Tax is Different O The Sorites Paradox
(D
IFFERENT C. D A. DOCX 132 IFFERENT 2. :D
AX T III. ME REVIEW ME _ Section II.B.1. We do not claim that Code provisions should never be read do not claim that Code provisions Section II.B.1. We Doing so, the Court pointed out, would require sacrificing the sacrificing require would pointed out, Court so, the Doing Dominic Hyde & Diana Raffman, at 594–95. 3 C.F.R. § 652 (1959-1963 Comp.)). (quoting Exec. Order No. 11063, 129 ABREU GREENSTEIN ABREU .See .Id. .Id. . See supra 71.4_ In the Introduction, we invoked the Sorites Paradox: the paradox of the In the Introduction, we invoked the 132 In the next Part, we directly address the question whether accumulated In the next Part, we directly address Tax scholars, including us, have pointed out many ways in which tax dif- us, have pointed out many ways Tax scholars, including 129 130 131 M K as rules. Sometimes they should. But a pragmatist test should be employed: In any given test should be employed: they should. But a pragmatist as rules. Sometimes instance the question should be whether there is a net benefit to adopting a plain-meaning, pragmatist approach can be applied to the rule-like interpretation of the provision? This itself: Is there a net benefit to treating the tax law as larger question of tax exceptionalism exceptional? In other words, is the idea of tax exceptionalism useful? We propose a frame- work for analyzing these questions in Part IV heap. Through the process of adding together grains of sand, the grains turn heap. Through the process of adding point at which the addition of indi- into a heap. But there is no determinate vidual grains creates a heap. 2019] language. ALR fers from other fields of law. The accumulation of those differences has of law. The accumulation of fers from other fields to conclude scholars, and other tax professionals tempted judges, lawyers, earlier, including The various factors we discussed that tax is exceptional. of encounters with the tax norms, the pervasiveness the failure to internalize of revenue raising, of the Code, the importance tax system, the complexity have reinforced this temptation to think and the ascendancy of economists of tax as exceptional. of law can, by virtue of their accu- differences between tax and other fields kind from other fields of law. We will mulation only, make tax different in derived from Jamesian pragmatism— propose a framework—a framework for analyzing this question. deeply important values against racial discrimination rooted in rooted racial discrimination values against deeply important “the public and laws.” its Constitution as manifested in the United States policy of Thus, the Court’s analysis suggests that adopting the University’s hyper-clear the University’s that adopting Court’s analysis suggests Thus, the norma- that the the very legitimacy would undermine 501(c)(3) § reading of sacrifice because it would seeks to promote for hyper-clarity tive argument non-discrimination. the moral value of C Y 41829-adm_71-4 Sheet No. 24 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 24 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 24 Side B 12/06/2019 13:58:53 M K C Y The puzzle See id. [71:4 [71:4 EVIEW ) 11/26/19) 11:33 AM R 134 AW ELETE L D OT But when even more modifications are But when even more N O A 2001 Revenue Ruling examining the Revenue Ruling A 2001 135 (D 133 DOCX 2. (heap)). The Paradox is usually traced back to a puzzle at- (heap)). The Paradox is usually traced back DMINISTRATIVE DMINISTRATIVE A soros ME REVIEW ME _ Paradox, the Sorites begins with an apparently true proposition: “1 grain Paradox, the Sorites begins with an logical I.R.C. § 263(a)(1) (2019); Treas. Reg. § 1.162-4(a) (2019) (indicating, as in the 1.162-4(a) (2019) (indicating, as in the 263(a)(1) (2019); Treas. Reg. § I.R.C. § ABREU GREENSTEIN ABREU .See .Id. . § 1 (Edward N. Zalta ed., Winter ed. 2014) (ebook), http://plato.stanford.edu/ar- ed. N. Zalta ed., Winter 1 (Edward . § 71.4_ Would you describe a single grain of wheat as a heap? No. Would you describe two grain of wheat as a heap? No. Would you describe a single Would draw the line? so where do you later, 1 grain of wheat does not make a heap. 2 grains of wheat do not.If 1 grain of wheat does not make a heap then 3 grains do not.If 2 grains of wheat do not make a heap then . . . thenIf 9,999 grains of wheat do not make a heap 10,000 do not. grains of wheat as a heap? No. . . . You must admit the presence of a heap sooner or grains of wheat as a heap? No. . . . You must 133 134. 2001-4, 2001-1 C.B. 295. Rul. Rev. 135 10,000 grains of wheat do not make a heap. Law is full of examples of indeterminate boundaries between categories. categories. between boundaries of indeterminate examples is full of Law The Ruling begins by describing a number of modifications which together together which by describing a number of modifications The Ruling begins Each proposition in the chain appears to be true, but the conclusion—“10,000 grains of be true, but the conclusion—“10,000 Each proposition in the chain appears to HIL tributed to the logician Eubulides of Miletus, a contemporary of Aristotle. tributed to the logician Eubulides of Miletus, chives/win2014/entries/Sorites-Paradox/ (explaining that the name, Sorites Paradox, de- (explaining that the chives/win2014/entries/Sorites-Paradox/ rives from the Greek word version has been summarized as follows: Presented as a becomes the antecedent of a conditional, of wheat does not make a heap.” That proposition not make a heap then 2 grains of wheat do not.” if-then, proposition, “If 1 grain of wheat does each of which takes as its antecedent This is followed by a chain of conditional propositions, of the preceding proposition: statement) (the “if” statement) the consequent (the “then” P 698 ALR In tax, a familiar example is the distinction between repairs, which are cur- between repairs, which is the distinction familiar example In tax, a and are capital expenditures which and improvements, rently deductible, be capitalized. must therefore Id. to be false: a Paradox that exploits the indeterminacy wheat do not make a heap”—appears make a heap.” of the predicate of each proposition, “do not is sub- Sorites paradox, the lack of clarity regarding at what point a repair or series of repairs as stantial enough to constitute a “betterments made to increase the value of any property,” the all repairs necessarily increase the value of a property over what it was immediately before mainte- deduct “amounts paid for repairs and repair, and the regulations allow a taxpayer to of any given grain of sand, it is unclear nance to tangible property”). As with the addition a repair into a betterment. when doing one additional thing turns constitute “heavy maintenance” and concludes that the modifications will be maintenance” and concludes that the constitute “heavy repairs. categorized as deductible made, the accumulated modifications, including the “heavy maintenance” modifications, including the made, the accumulated are deductible, and out of the category of repairs, which modifications, pass treatment of “heavy maintenance” performed to a commercial airliner illus- to a commercial performed of “heavy maintenance” treatment the boundary. indeterminacy of trates the 41829-adm_71-4 Sheet No. 24 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 24 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 25 Side A 12/06/2019 13:58:53 140 137 Deborah A. Geier, cf. These modifica- These 136 17, 42–43 (1998) (explain- 699 699 Y ’ OL It distinguishes mere re- It distinguishes mere P 138 AX ) 11/26/19) 11:33 AM XCEPTIONAL .J.T E M ELETE D OT OT , 15 A ,N N O (D note 134. It becomes useful to describe “heavy mainte- . DOCX IFFERENT 2. supra :D AX T ME REVIEW ME _ , 503 U.S. at 84 Usefulness in this context implicates the important tax value of horizontal eq- Usefulness in this context implicates Rev. Rul. 2001-4, INDOPCO Inc. v. Comm’r, 503 U.S. 79, 84 (1992) (“Through provisions [al- INDOPCO Inc. v. Comm’r, 503 U.S. 79, Put another way, the concept of capitalization is useful. the concept of capitalization is useful. Put another way, Id. 139 ABREU GREENSTEIN ABREU .See . INDOPCO .Id. .Id. .See 71.4_ 140 This observation, that the concept of capitalization is useful because it al- that the concept of capitalization is This observation, accumulated modifications of an air- Similarly, when is it useful to treat the 139 136 137 138 The availability of these two categories—repairs and capital expendi- and capital two categories—repairs of these The availability M K uity, pursuant to which taxpayers who are similarly situated ought to be treated similarly. If situated ought to be treated similarly. uity, pursuant to which taxpayers who are similarly that is conducted in the context such extensive modifications heavy maintenance making of nance” modifications as capital expenditures when they are part of an activity that is tanta- as capital expenditures when they nance” modifications to the acquisition of a new airplane because the useful life of the airplane has been mount extended. lows the tax system to avoid the mismatch problem and to measure income to avoid the mismatch problem and lows the tax system Sorites problems;to a framework for thinking about accurately, points that the indeterminacy Pragmatism allows us to address framework is pragmatism. question—when does a heap of boundaries. Instead of asking a metaphysical question: When is it useful to treat come into being?—we can ask a pragmatist a heap? the accumulated individual grains as is it useful to treat the accumulative plane as capital expenditures? Or, when fields of law as making tax exceptional? differences between tax and other sand becomes a heap when it is useful to Thus, the accumulation of grains of The modifications to the airplane be- describe the accumulation as a heap. useful to describe them as capital expend- come capital expenditures when it is matching that the income tax requires. itures because doing so will allow the ing the dramatic economic effect of allowing a deduction for a capital expenditure). effect of allowing a deduction for a capital economic ing the dramatic 2019] not. which are expenditures, of capital the category into ALR lowing deductions for depreciation and amortization], the Code endeavors to match expenses lowing deductions for depreciation and amortization], which they are properly attributable, thereby re- with the revenues of the taxable period to income for tax purposes.”); sulting in a more accurate calculation of net The Myth of the Matching Principle as a Tax Value Principle as a Tax of the Matching The Myth pairs, which are properly matched with the income generated in the period matched with the income generated pairs, which are properly that period and expenditures, which will last beyond incurred, from capital over the remaining matched with the income generated should therefore be period. tures—is important because these categories respond to a crucial problem in respond to a crucial these categories important because tures—is of capitaliza- The concept of income. the correct measurement the tax law: matching the costs of law to measure income correctly by tion allows the tax with the income generated. generating income tions are like the accumulated grains of sand that have become a heap. The a heap. that have become grains of sand like the accumulated tions are expenditures is indeterminate. and the capital between the repairs boundary C Y 41829-adm_71-4 Sheet No. 25 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 25 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 25 Side B 12/06/2019 13:58:53 M K 144 145 C Y AYS OF Id. W LD true idea] O 143 OME S 62–64 Univ. Press (Oxford [71:4 [71:4 AME FOR N Nineteenth-Century Clouds Over the Dy- EVIEW ) 11/26/19) 11:33 AM R HILOSOPHY EW P . at 1–40 (1901) the concept of (broaching AW ELETE CI L D :AN OT N .&J.S O (D AG ROBLEMS OF P .M note 132 (noting that classic responses regarding usefulness note 132 (noting that classic responses regarding DOCX RAGMATISM HE 2. HIL The Jamesian Pragmatist Reframing Pragmatist Reframing The Jamesian DMINISTRATIVE DMINISTRATIVE supra P ,T ,P
A B. note 144, at 62–64. AMES J ME REVIEW ME USSELL _ R supra gravity would make the world dangerous (if, say, we were in- the world dangerous (if, say, we gravity would make ILLIAM Russell, Russell, W Hyde & Raffman, & Raffman, Hyde . . . . The possession of truth, so far from being here an end in itself, is only being here an end in . . . . The possession of truth, so far from a and the truth of a proposition lies in its usefulness. and the truth of a ERTRAND James argued that the meaning of a word lies in its “practical cash- the meaning of a word lies in its “practical James argued that 26, 41 (1907). 142 141 ABREU GREENSTEIN ABREU .See .See .See (1912). physics accurately was the belief that Newtonian kind of example A different disbelieving at 138-40. The Right. Hon. Lord Kelvin (William Thompson), (William Lord Kelvin The Right. Hon. 71.4_ In other words, a true idea is one that proves useful in making sense of our idea is one that proves useful in In other words, a true 145 141 142 This focus on usefulness is derived from the pragmatism of William the pragmatism is derived from on usefulness This focus then that “it is useful because it is true” or that “it is true because it is useful.”then that “it is useful because it is true” or Both that here is an idea that gets fulfilled these phrases mean exactly the same thing, namely and can be verified. 143. explained: James As that those are corroborate and verify. False ideas True ideas are those that we can assimilate, validate, we cannot . . . You can say of [a towards other vital satisfactions. means preliminary 144. B This idea that truth is ultimately measured against the ongoing flow of is ultimately measured against This idea that truth HINKING Id. experience and in enabling us to cope successfully with the world. For ex- enabling us to cope successfully with experience and in in gravity true is pragmatist, what makes our belief ample, for a Jamesian that described the nature of the physical universe—a belief widely held until upended by Einstein. described the nature of the physical universe—a Cf. namical Theory of Heat and Light, 1959) relativity as an alternative to Newtonian physics). relativity as an alternative to Newtonian derive from logic because the Sorites Paradox is traditionally understood as a logical problem). traditionally understood is derive from logic because the Sorites Paradox the taxpayer has essentially acquired a new airplane, the taxpayer should be treated the same airplane, the taxpayer should be treated the same the taxpayer has essentially acquired a new In that case, treating the “heavy maintenance” as one that has acquired a new airplane. horizontal equity and is thus useful. as capital expenditures produces modifications T 700 tax exceptional of law make areas and other tax between the differences And tax as exceptional. useful to describe when it is ALR James. value,” Every day at dawn a farmer comes into the barn and feeds the chicken. Every day at dawn a farmer comes dawn necessarily means that she will be So the chicken comes to believe that enters the barn at dawn and cuts off the fed—until the day that the farmer experience means that every claim about what is true is provisional: Its truth that every claim about what is true experience means time. Consider Russell’s chicken. depends on its ability to hold up over clined to jump out of windows). Belief in gravity makes sense of our experi- of windows). Belief in gravity makes clined to jump out navigate safely in the world.ences and helps us 41829-adm_71-4 Sheet No. 25 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 25 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 26 Side A 12/06/2019 13:58:53 This 149 701 701 ) 11/26/19) 11:33 AM XCEPTIONAL E ELETE D OT OT ,N N O 147 (D DOCX IFFERENT 2. :D AX T ME REVIEW ME _ note 142, at 138 (emphasis in original omitted). The chicken’s belief in a causal connection between dawn dawn between connection a causal belief in chicken’s The 148 146 supra , AMES INDOPCO Inc. v. Comm’r, 503 U.S. 79, 84 (1992). ABREU GREENSTEIN ABREU . See id. . See id. . 71.4_ 146 147 148. J Following the sand and capitalization examples, we would approach this Following the sand and capitalization is an empty vessel even in the area The concept of tax exceptionalism As we have noted, the concept of a heap of sand is useful because it can the concept of a heap of sand is useful As we have noted, 149 Following James, we argue that the truth of a predicate in a proposition a predicate in a that the truth of James, we argue Following M K and food ultimately proved false. ultimately proved and food 2019] head. chicken’s ALR focus on usefulness replaces the brain-teasing question raised by the Sorites focus on usefulness replaces the brain-teasing sand become a heap?) with a Paradox (at what point does the accumulated to think about the accumulated sand as different question: When is it useful framework the question with a heap? Accordingly, within this pragmatist exceptional?) should be replaced with a which we began this Article (is tax to think about tax as exceptional? different question: When is it useful for some problem in the tax law that can question of usefulness by searching the concept of tax exceptionalism. be successfully addressed by employing problem. While there are many ways We are convinced that there is no such fields of law (just as there are many ways in which tax is different from other torts), and a particular difference may in which contracts is different from in tax than in other areas of the law, it call for different treatment of an issue difference that is useful. The con- is the analysis of the import of the specific It is an empty vessel.cept of exceptionalism adds nothing. application of administrative law princi- where it has most flourished—the the ability of the Office of Manage- ples to tax. A recent example involves Treasury (tax) regulations. From 1983 ment and Budget (OMB) to review until April 11, 2018, Treasury and OMB had agreed that only rarely would be used to address a problem—for example, acquiring sand needed to build a problem—for example, acquiring be used to address quantity of sand re- conveying information about the a sand castle—by because it addresses a concept of capitalization is useful quired. And the income—by better tax law—accurately measuring problem in the income generated. of generating income with the income matching the costs (“makes a heap” in the context of the Sorites Paradox; “is a capital expendi- Paradox; “is a capital of the Sorites heap” in the context (“makes a context of tax in the “is exceptional” context of capitalization; ture” in the which of the extent to is a function exceptionalism) out to be useful it turns “The truth of put it: as true. In this sense, as James to treat the predicate happens to an idea. property inherent in it. Truth an idea is not a stagnant the process Its validity is . . . is made true by events. It becomes true, and of its validation.” C Y 41829-adm_71-4 Sheet No. 26 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 26 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 26 Side B 12/06/2019 13:58:53 , M K C Y . 455, EV 154 .L.R and that was that was and LA William Hoffman, William 150 1409 (2018) (high- , 70 A OTES see also N note 150, at 479–82. But under the Trump But under AX [71:4 [71:4 151 supra Thinking Through OIRA Review of Tax EVIEW , 149 T ) 11/26/19) 11:33 AM R AW ELETE L D OT N O (Aug. 13, 2018), https://www.theregreview.org/ (Aug. 13, 2018), https://www.theregreview.org/ (D Centralized Review of Tax Regulations note 20. DOCX EVIEW 2. R DMINISTRATIVE DMINISTRATIVE Treasury and OIRA Still at Odds Over When Tax Regs Merit Review Tax Regs Merit Treasury and OIRA Still at Odds Over When supra A Under the new MOA, Treasury regulations are sub- regulations new MOA, Treasury Under the note 153, at 114 (noting differences in the breadth of application of ME REVIEW ME 152 _ The reason is that Treasury persuaded OMB that there Treasury persuaded OMB that The reason is that supra EGULATORY 153 R 114, 114–16 (2019); Clinton G. Wallace, 114, 114–16 (2019); Clinton G. Wallace, , McMahon, HE Jonathan Curry, Clinton G. Wallace, Clinton G. Wallace, Curry, OTES , T N ABREU GREENSTEIN ABREU . e.g. See, .See .See .See AX 71.4_ 151 152. & Budget Re- of Mgmt. The Treasury and the Office of Agreement, Memorandum 153 This example illustrates the need to determine whether Treasury regula- whether the need to determine This example illustrates exceptionalism is not useful involves But proving that the concept of tax 150 154 TCJA Reg Writers Earn Tax Notes’ 2018 Person of the Year TCJA Reg Writers ject to more OIRA review than was the case under the 1983 agreement but review than was the case under the ject to more OIRA as regulations from to the same quantum of OIRA review are still not subject other agencies. Regulations 116 T 458–59, n.11, 472–73 (2018); Memorandum of Agreement, Treasury & Office of Mgmt. & of Mgmt. Treasury & Office of Agreement, 458–59, n.11, 472–73 (2018); Memorandum (Apr. 12291 29, 1983), https://www.treasury. Budget Implementation of Exec. Order gov/FOIA/Documents/OMB%20MOA%2083-93.pdf. 12866 (Apr. 11, 2018), https://home.treasury. view of Tax Regulations Under Exec. Order gov/sites/default/files/2018-04/04-11%20Signed%20Treasury%20OIRA%20MOA.pdf. Administration that agreement came into question and on April 11, 2018, and on April came into question that agreement Administration of into a new Memorandum and OMB entered Department the Treasury (MOA). Agreement by other agencies. treated like regulations promulgated tions ought to be allowed Treas- ways in which tax regulations are different Identifying specific be treated differently. and how Treasury regulations should ury to show when the position that tax of the problem. By contrast, taking It guided resolution to an understanding of the problem is exceptional would have added nothing But focusing on the differences or provided any guidance for its resolution. level of review appropriate? If it is, who helps us answer questions like: Is any period? To what end? The claim of should perform the review? Over what those questions. It is not useful. tax exceptionalism does not help answer that we are aware of no instances—fromproving a negative. While it is true were specific ways in which many Treasury regulations differed from other in which many Treasury regulations were specific ways treatment. and therefore warranted different agency’s regulations 702 OIRA, by OMB’s to review subject be regulations Treasury ALR 2018/08/13/wallace-oira-review-tax-regulations/; Wallace, 2018/08/13/wallace-oira-review-tax-regulations/; Wallace, many Treasury regulations, the importance of providing guidance that carries the force of law guidance that carries the force of law many Treasury regulations, the importance of providing the and can therefore be relied on both by the IRS and taxpayers in interpreting the law, and of tax legislation);need for speedy guidance following the enactment lighting the acute need for expedited guidance created by the enactment of new tax legislation lighting the acute need for expedited guidance on December 22, 2017 and applicable January 1, 2018). often cited as an example of tax exceptionalism because regulatory action by because regulatory tax exceptionalism as an example of often cited to OIRA review. agencies was subject most other 41829-adm_71-4 Sheet No. 26 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 26 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 27 Side A 12/06/2019 13:58:53 157 But 159 Hence, 160 ? and introduced its SEFUL 158 703 703 U Tax exceptionalism, alt- 161 ) 11/26/19) 11:33 AM XCEPTIONAL Judge Minor Wisdom observed: Judge Minor Wisdom E 155 ELETE , D OT OT ,N N XCEPTIONALISM Judicial Examples O E (D
AX The issue in that case involved a provision of The issue in that A. T DOCX IFFERENT 156 2. S I :D AX T
ME REVIEW ME _ , Helvering v. Morgan’s Inc., 293 U.S. 112, 125–28 (1934). , Helvering v. Morgan’s IV. , 324 F.2d at 12. Section II.B.3 (explaining the Court has resolved ambiguities through or- Section II.B.3 (explaining the Court has resolved ambiguities Bob Jones Univ. v. United States, 461 U.S. 574, 586 (1983) (affirming tax Bob Jones Univ. v. United States, 461 U.S. 574, 586 (1983) (affirming See, e.g. at 12. ABREU GREENSTEIN ABREU .Id. .Henderson .Id. . See supra .Accord United States v. Henderson Clay Products United States v. Henderson 71.4_ 155. 324 F.2d 7 (5th Cir. 1963). 156 157. § 114(b)(4)(A)(iii) (repealed 2004). I.R.C. 158 159 160 161 The court regarded the taxpayer’s position on this issue of interpretation as The court regarded the taxpayer’s position The first of the two judicial opinions provided the epigraph for this article. judicial opinions provided the epigraph The first of the two M K dinary statutory interpretation and by invoking legislative history, legislative purpose, defer- dinary statutory interpretation and by invoking legislative history, legislative the ence to agency interpretation, and values rooted in public policy, the common law, and Constitution). analysis with this passage: “Tax law is law unto itself. There are no equities in analysis with this passage: “Tax law permissible illogic in the tax law.” the tax law. And there is an area of the Internal Revenue Code of 1939 allowing a deduction for the depletion of Code of 1939 allowing a deduction the Internal Revenue the property.” dependent on the “gross income from mineral resources, the opinion considered the statute’s plain meaning, sought to determine legis- the opinion considered the statute’s precedent, and synthesized other judicial lative intent, applied Supreme Court various decisions of various courts. authority, analogizing and distinguishing the Code as a “law unto itself” but as In short, the court did not actually treat must be discerned through the use of the an ordinary statute, whose meaning ordinary techniques of statutory interpretation. “Tax law is law unto itself.” “Tax law is law unto 2019] tax profession- or from taxpayers, from from courts, the IRS, from Congress, deployed has been successfully tax exceptionalism the concept of als—where no such in- that there are that does not prove an actual problem, to resolve we offer seven Nevertheless, no such instances. that there can be stances or is a useless tax exceptionalism of our claim that evidence in support pieces of two judicial opinionsconcept: five works of tax scholarship. in tax cases and ALR hough invoked, did not actually assist the court in the resolution of the case. the court in the resolution of the case. hough invoked, did not actually assist provisions should be interpreted in accordance with generally applicable principles of statu- provisions should be interpreted in accordance with generally applicable principles of tory interpretation and the Court “should go beyond the literal language of a statute if reliance notwithstanding this straightforward invocation of tax exceptionalism, the notwithstanding this straightforward statutory interpretation. court treated the issue as one of ordinary counterintuitive (describing it as “highly indigestible”), counterintuitive (describing it as “highly In C Y 41829-adm_71-4 Sheet No. 27 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 27 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 27 Side B 12/06/2019 13:58:53 M K C Y 165 King v. Burwell, 135 and [71:4 [71:4 EVIEW ) 11/26/19) 11:33 AM R AW ELETE L D OT N O (D DOCX 2. DMINISTRATIVE DMINISTRATIVE was whether medical residents were students and were students medical residents was whether A 167 3121(b)(10)–2(d)(3)(iii) (2006). The issue ultimately decided by the Su- ultimately 3121(b)(10)–2(d)(3)(iii) (2006). The issue Mayo Foundation for Medical Education & Resources v. United Education & Resources for Medical Mayo Foundation ME REVIEW ME Mayo _ has a long history, summarized by the Eighth Circuit. 568 F.3d at 678–79. 168 A Treasury regulation provided an answer by reference to provided an answer by reference A Treasury regulation 163 The district court had held the regulation invalid because the had held the regulation invalid because The district court Mayo Rather, the court held: Rather, the court , 568 F.3d at 680. 164 166 which shows how tax exceptionalism substitutes conclusion for anal- conclusion for substitutes how tax exceptionalism which shows is a “student who is enrolled and regularly attending classes” for purposes attending classes” for is a “student who is enrolled and regularly of ABREU GREENSTEIN ABREU .Mayo .Id. .Id. .Id. 162 , 71.4_ 166 167 168 165. States, 503 F. Supp. 2d 1164, 1169– Educ. & Res. v. United Found. for Med. Mayo 162. 568 F.3d 675 (8th Cir. 2009). 163 164. 31. § Reg. Treas. Reversing the district court’s decision, the Eighth Circuit did not deny that court’s decision, the Eighth Circuit Reversing the district 26 U.S.C. § 3121(b)(10). [The language of the Code] must be construed in context, and when the context Code] must be construed in context, and [The language of the or hold that the statute is silent We nearly always appropriate. interpreting Internal Revenue Code, a Treasury Regulation is a provision of the is words the resident working for the school full- on the question whether a medical ambiguous time the statute in question was the In effect, the court held that because By contrast, in the second judicial opinion the court both invoked tax ex- invoked both the court opinion judicial the second in By contrast, 77 (D. Minn. 2007). 77 (D. Minn. preme Court in the relevant statutory language had “a plain or common meaning in other language had “a plain or common the relevant statutory contexts.” U.S. 2480, 2488–89 (2015) (citing FDA v. Brown & Williamson Tobacco Corp., 529 U.S. Brown & Williamson U.S. 2480, 2488–89 (2015) (citing FDA v. and “overall statutory scheme” in deter- 120, 133 (2000)) (noting the importance of “context” of Code provisions). the meaning mining
of the statute”), on that language would defeat the plain purpose 704 ALR ceptionalism and used it when deciding the case. We refer to the Eighth case. We refer deciding the and used it when ceptionalism opinion in Circuit’s States of statutory interpretation, such as Internal Revenue Code, ordinary tools to it when faced with judging the the plain meaning rule, were unavailable The Eighth Circuit seemed to say that validity of a Treasury regulation. because it is in the Code—it is Code language is intrinsically ambiguous could not assume that the meaning of tax. And because of that, the court the plain meaning of such language “in the Code’s language would match other contexts.” statutory term “student” was not ambiguous and the regulation was therefore was not ambiguous and the regulation statutory term “student” plain meaning of the statutory language. inconsistent with the ysis. The issue in ysis. The Act Insurance Contributions payment of Federal exempt from the therefore (FICA) taxes. the number of hours worked, and the taxpayer challenged the validity of that worked, and the taxpayer challenged the number of hours regulation. 41829-adm_71-4 Sheet No. 27 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 27 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 28 Side A 12/06/2019 13:58:53 ), , 90 step three National United Chevron and em- with Chevron Newark Morn- Newark 171 National Muffler , rather than the case that specifically , the Court has cited Compare framework to tax cases. framework National Muffler . For a graphic representa- 705 705 Chevron Chevron Chevron Mayo National Muffler was a pre- ) 11/26/19) 11:33 AM XCEPTIONAL E ELETE D OT Appendix A. OT ,N see test for deference to administrative regu- to administrative test for deference N , O Instead, it engaged in the careful analysis Instead, it engaged (D National Muffler National Muffler 172 DOCX Chevron IFFERENT 2. :D 173 AX National Muffler , the court actually applied the analytical framework from National , the court actually applied the analytical framework T each twice in majority opinions, and it has cited each twice in majority The Need for Mead: Rejecting Tax Exceptionalism in Judicial Deference The Need for Mead: ME REVIEW ME on test. _ and text accompanying note 13. Chevron Comm’r v. Estate of Hubert, 520 U.S. 93, 120, 127 (1997) (O’Connor, J., Comm’r v. Estate of Hubert, 520 U.S. 93, Mayo Chevron and ’s two in separate concurring or dissenting opinions.”). ’s two in separate concurring or dissenting opinions.”). see supra , 568 F.3d at 681. ), and . 1537, 1579 (2006) (noting that “[s]ince deciding . 1537, 1579 (2006) (noting that “[s]ince deciding even here the Eighth Circuit seemed to be under the sway of tax exceptionalism. even here the Eighth Circuit seemed to be , step one, which the Eight Circuit had omitted. For Eight Circuit had omitted. For step one, which the Faced now with the application of step two, which the court de- which the court of step two, with the application Faced now EV the Eighth Circuit engaged in a careful, granular analysis of whether analysis of whether in a careful, granular Circuit engaged the Eighth 169 Mayo Chevron ABREU GREENSTEIN ABREU .Mayo in tax cases persisted until the Supreme Court decided , both courts and scholars continued to apply the , both courts and scholars continued to apply .L.R 170 National Muffler 71.4_ Chevron 172. 44, 55 (2010). States, 562 U.S. Educ. & Res. v. United Found. for Med. Mayo 173. of rejection detailed description of the Court’s For a more Although it affirmed the Eighth Circuit’s judgment, the Supreme Court the Eighth Circuit’s judgment, Although it affirmed 169. Inc., 467 U.S. 837 Council, Chevron U.S.A., Inc. v. Nat. Res. Def. (1984). 170 171. But By regarding the Code as intrinsically ambiguous, the Eighth Circuit pole- Circuit the Eighth ambiguous, as intrinsically the Code By regarding We believe that the Supreme Court’s analytical approach is the correct We believe that the Supreme Court’s 242 (1992) v. Burke, 504 U.S. 229, United States (Scalia, J., concurring) (same), Kristin E. Hickman, INN M K and U.S. 822, 840 (2001)Dominion Indus., Inc. v. United States, 532 (Stevens, J., dissenting) (citing National Muffler they continued to think Apparently because Why? concurring and Scalia, J., dissenting) (same). good that tax is different and that it is exceptional. If tax were exceptional there would be no crafted for judicial deference in a tax case had reason to think that the test the Supreme Court would be replaced by a test designed to apply to regulations generally. Allegiance to Muffler tion of the effect of ing Ledger Co. v. United States, 507 U.S. 546, 576 (1993) ing Ledger Co. v. United States, 507 U.S. (Souter, J., dissenting) (citing times to times brace of adopted a very different analytical approach. Rather than assuming that analytical approach. Rather adopted a very different the rejection of an- unique about tax law that required there was something in other fields of law, to determine deference to regulations alytical tools used absence of a special with the opposite presumption. In the the Court started to administrative refused “to carve out an approach justification, the Court law only.” review good for tax National Muffler the Regulation was a permissible interpretation of the Code. interpretation was a permissible the Regulation 2019] ALR vaulted over step one of the step one of the vaulted over lations. M Although it invoked the Treasury Dealers Ass'n v. United States, 440 U.S. 472 (1979), to determine whether Muffler Regulation was entitled to deference. See of two the Court applied the test derived directly from two the Court applied old involved the question of deference to tax regulations. Even after the Supreme Court decidedinvolved the question of deference to tax regulations. Chevron scribed as entitling the Regulation to deference “so long as it is reasona- “so long as deference to entitling the Regulation scribed as ble,” one and that it should be followed by scholars as well. In the next section we scholars as well. In the one and that it should be followed by C Y 41829-adm_71-4 Sheet No. 28 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 28 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 28 Side B 12/06/2019 13:58:53 M K 180 C Y On On , and 181 Mayo 182 Maybe Just a Little [71:4 [71:4 and “fundamentally differ- EVIEW 177 ) 11/26/19) 11:33 AM R Court’s approach. Court’s approach. AW ELETE L D It is the view that the tax law is “spe- Mayo note 171. OT 174 N O Scholarly Examples Scholarly Examples supra (D
. B. DOCX 2. note 3, at 806. DMINISTRATIVE DMINISTRATIVE A Professor Zelenak seeks to make sense of what he calls Professor Zelenak seeks to make sense supra “differen[t] in kind,” note 1, at 20 note 2, at 1901. note 2. ME REVIEW ME note 2, at 1900. 179 _ note 2; Hickman, 176 , note 2, at 531. supra supra supra supra supra supra at 1900. “unique,” from other law. The question we have tried to answer in this Article from other law. The question we have ABREU GREENSTEIN ABREU .Id. .Id. 175 178 71.4_ The five scholars whose work we discuss in this section all identify ways in work we discuss in this section The five scholars whose is “the notion that the Introduction, tax exceptionalism As we explained in 174. Zelenak, 175 176. Johnson, We begin with the work of Professor Larry Zelenak. In We begin with the work of Professor However, as Professor Zelenak observes, those alleged exceptionalists are However, as Professor Zelenak observes, 177. Ferguson et al., 178. Caron, 179. Zelenak, 180 181. Caron, 182. Zelenak, ent,” “the rhetorical war between the tax exceptionalists and their opponents.” “the rhetorical war between the tax 706 ap- the analytical in which way out the point works, five scholarly discuss in Court’s approach not, follow the does, or does proach adopted of the collateral benefits discuss some two, Professors Larry from other fields of law. The first which tax differs exceptionalism in ad- Puckett, invoke the concept of tax Zelenak and James of law. The remaining between tax and other fields dressing the differences Hickman also ex- Hemel, Andy Grewal, and Kristin three, Professors Daniel but they do so without tax and other fields of law, plore differences between in tax exceptionalism. grounding their analysis the result that many deeply different from other law, with tax law is somehow of the legal landscape trans-substantively across the rest of the rules that apply do not, or should not, apply to tax.” ALR the other side are the many scholars who have written “law review articles the other side are the many scholars characteristics of the tax laws justify the arguing, for example, that particular the validity of regulations, or existence of tax-specific rules for determining interpretation . . . .” require a tax-specific approach to statutory Bit Special, After All? is whether the concept of tax exceptionalism is useful. is whether the concept of tax exceptionalism cial,” On one side of this rhetorical war are the scholars, like Professors Paul Caron On one side of this rhetorical war are concept of tax exceptionalism. and Kristin Hickman, who reject the not really exceptionalists. They are not treating tax law as “deeply different” not really exceptionalists. They are outfrom other law. Rather they are pointing “particular characteristics of of tax-specific rules.” In other words, the tax laws [that] justify the existence 41829-adm_71-4 Sheet No. 28 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 28 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 29 Side A 12/06/2019 13:58:53 Court’s Mayo 707 707 ) 11/26/19) 11:33 AM XCEPTIONAL E ELETE D OT OT Of course, he is right. Sometimes it is Of course, he is right. ,N N 183 O (D 184 DOCX 185 IFFERENT note 20, at 603, 611 (arguing in favor of a “mental shortcut,” 2. :D supra AX T note 2, at 1915. ME REVIEW ME _ supra McMahon, at 1913–14. That court used tax exceptionalism as a substitute for a detailed ABREU GREENSTEIN ABREU .But see .But .Id. 71.4_ Mayo. But as we have now said many times, pointing out the ways in which tax out the ways in times, pointing have now said many But as we the recognizes this point. Indeed, he cites Professor Zelenak 184. Zelenak, 185 183 But labels matter. We have argued that tax exceptionalism is not a useful But labels matter. We have argued [E]xceptionalism would be accidental or contingent, in the sense that if the same in the sense that if the same would be accidental or contingent, [E]xceptionalism nontax context, then the [different] some . . . could be shown to exist in circumstances this as in the tax context. Whether standard would apply just as much in that context is a question of exceptionalism) would still be exceptionalism (tax-and-something-else or as the that as exceptionalism one describes Whether . . . labels, not of substance. application of general principles to a set that happens to have only one member, the would still be justified. treatment M K 2019] of law. other fields tax and between differences particular are analyzing they exceptional. not show tax to be fields of law does from other law is different of standard is the heart and soul those differences and examining Identifying between in kind, comparison were truly different Indeed, if tax legal analysis. comparing It would be like would be impossible. fields of law tax and other are able to make The fact that alleged exceptionalists apples and lampposts. between tax and observations about differences interesting and important that tax is not exceptional. other fields demonstrates because of “the ab- special rule of deference in tax cases refusal to apply a it is appropriate for tax as evidence that sometimes sence of [a] justification” rules.” to operate under “different ALR concept because it addresses no problem in the tax law and, therefore, does concept because it addresses no problem were the only consequence of tax no useful work. Of course, if uselessness the concept as superfluous but benign. exceptionalism, we might think of can cause harm. If we think However, the concept of tax exceptionalism from other fields of law as indica- about the ways that tax might be different may well affect a judge’s tions that tax is exceptional, that characterization the better. That, in fact, seems to have or scholar’s analysis, and not likely for down the wrong track in its analysis been just what sent the Eighth Circuit in analysis of the specific issue. namely a “heuristic that tax is different”).namely appropriate to treat tax differently—just as sometimes it is appropriate to tax differently—just as sometimes appropriate to treat a uniquely high bur- differently by, for example, imposing treat criminal law of law are necessarily As noted above, all fields den of proof on prosecutors. fields of law, and those differences will different in certain respects from other In such instances, Professor Zelenak in some instances justify different rules. suggests that: C Y 41829-adm_71-4 Sheet No. 29 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 29 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 29 Side B 12/06/2019 13:58:53 M K R. 187 — C Y He He ODE 188 .C ISS see also Facts About In addition, Pro- 32-24 M 189 See (June 27, 2002), https:// Henderson Clay Products Henderson [71:4 [71:4 EVIEW OMMISSION ) 11/26/19) 11:33 AM R C “when submission to or rejection of this submission “when AW ELETE L D OT N O (D PPORTUNITY O Professor James Puckett identifies differences Professor James Puckett identifies 186 DOCX 2. DMINISTRATIVE DMINISTRATIVE QUAL note 98 (arguing that “tax law consists of highly technical, often note 98 (arguing that “tax law consists of highly A supra ME REVIEW ME note 21. U.S. E _ HE supra Parker, , T at 1070–71. Id. ABREU GREENSTEIN ABREU . See also Structural Tax Exceptionalism, 71.4_ 187. also includes conduct Sexual harassment 188. Puckett, 189. Contrasting the exceptionalist label with a label from a different field of label with a label from Contrasting the exceptionalist 186 And the danger of using the exceptionalism label as a substitute for anal- for as a substitute label the exceptionalism of using the danger And By contrast, the invocation of tax exceptionalism when describing differ- By contrast, the invocation of tax exceptionalism want to discuss illustrates these points. The second piece of scholarship we conduct explicitly or implicitly affects an individual’s employment.” employment.” affects an individual’s conduct explicitly or implicitly formalistic, and sometimes inequitable and illogical rules”). and sometimes formalistic, points out, for example, that the IRS and Treasury depart from the usual points out, for example, that the IRS by the APA. notice-and-comment rulemaking prescribed law that is not only useful but helpful reveals the uselessness of tax exception- useful but helpful reveals the uselessness law that is not only Labeling a partic- and helpful label is sexual harassment. alism. That useful useful of behaviors sexual harassment has proven ular constellation in at least instances of workplace First, by grouping together various two related ways. work perfor- interfere[] with an individual’s conduct that “unreasonably work environment,” an intimidating, hostile or offensive mance or create[] www.eeoc.gov/facts/fs-sex.html (same). 708 ALR § 11.04 (LexisNexis 2015) (providing language for this general principle); § ysis is even broader. If Judge Wisdom was correct in Wisdom was correct broader. If Judge ysis is even “equities” the tax law as lacking to understanding leads if tax exceptionalism to the sacri- will lead tax exceptionalism “illogic”—then and countenancing to justice field of law indifferent law just. A needed to make fice of qualities exceptional indeed. would be fessor Puckett notes that section 7805(b) of the Code permits the retroactive fessor Puckett notes that section 7805(b) between the administration of tax and other bodies of federal of law. between the administration of tax and the label revealed how many types of behavior that were previously thought how many types of behavior that were the label revealed That is, the label ena- be benign were, in fact, harmful. by many people to certain types of for the first time—that bled us to see clearly—sometimes with our social values. Second, by workplace conduct were inconsistent with our values into focus, the label bringing this harm and its inconsistency norms and designing legal doctrines to paved the way for changing social prevent and remedy sexual harassment. of law reveals nothing new. Each of the ences between tax and other fields of law can be fully evaluated by con- differences between tax and other fields values associated with law generally. sidering them in light of tax values and us no new understanding about how The label “tax exceptionalism” gives with relevant values. It is not useful. these differences promote or conflict In Sexual Harassment 41829-adm_71-4 Sheet No. 29 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 29 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 30 Side A 12/06/2019 13:58:53 .L. A , 104 V 709 709 Restoring the Lost Anti-Injunction ) 11/26/19) 11:33 AM The Living Anti-Injunction Act XCEPTIONAL E ELETE those differences tax exceptionalism those differences tax exceptionalism D OT OT ,N N O labeling (D He claims that these differences constitute that these differences He claims 192 DOCX IFFERENT 2. Finally, he observes that by contrast to the gen- by contrast to the he observes that Finally, :D 191 Daniel Jacob Hemel, AX T 193 . ME REVIEW ME note 21, at 1111. But see _ . 1683 (2017). supra EV and that because of the Anti-Injunction Act and the Declaratory and the Declaratory Act because of the Anti-Injunction and that 74Kristin E. Hickman and Gerald Kerska, (2018); at 1073–74, 1095–1100. at 1074. .L.R 190 A ABREU GREENSTEIN ABREU NLINE .Id. .Id. .Id. .O 71.4_ 193 Contrasting Professor Puckett’s use of the label “tax exceptionalism” and Contrasting Professor Puckett’s use Puckett’s identification of the To be clear, we are not saying that Professor We believe that Professor Puckett’s article makes important points and we Puckett’s article makes important We believe that Professor 191 190 192. Puckett, , 103 V M K EV Act Judgment Act taxpayers ordinarily can “challenge Treasury Regulations Treasury can “challenge Act taxpayers ordinarily Judgment only post-enforcement.” eral practice under the APA, the IRS’ assertions of tax liability receive no of tax liability the IRS’ assertions under the APA, eral practice in litigation. special deference agree with him that a one-size-fits-all approach to the administration of fed- a one-size-fits-all approach to the agree with him that use of the phrase “tax be unwise. However, despite his eral tax law would Puckett is not the title and in the article itself, Professor exceptionalism” in He is not treating tax “deeply different” from other law. treating tax law as of articles that Pro- his article is within the category as exceptional. Rather, of the tax to as identifying “particular characteristics fessor Zelenak refers raises the question existence of tax-specific rules.” This laws [that] justify the adds anything to his analysis. of whether the use of the term “exceptionalism” We believe that it does not. why the exceptionalism label is not use- the label “sexual harassment” shows label was useful in that it revealed ful. As noted above, the sexual harassment workplace behaviors in question and a new way of understanding the norms applicable to those behaviors. changed both the normative and legal of the label “tax exceptionalism” adds By contrast, Professor Puckett’s use specific differences he identifies regard- nothing to his analysis of each of the us additional understanding of these ing tax administration. It neither gives to changing the normative or legal en- particular differences nor contributes operate. In short, the label vironment in which these differences “tax excep- Puckett’s analysis would be the tionalism” does no useful work: Professor same if he had never mentioned it. of law and his arguments in support differences between tax and other fields justify different treatment of tax are of the proposition that those differences not useful. Our argument is that 2019] under approach the usual to in contrast again tax regulations, of application the APA, ALR R “structural tax exceptionalism,” arguing that the structure of the tax law arguing that the structure “structural tax exceptionalism,” makes it exceptional is not useful because it does not contribute to his analysis. It can also hamper is not useful because it does not contribute C Y 41829-adm_71-4 Sheet No. 30 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 30 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 30 Side B 12/06/2019 13:58:53 M K AX C Y 933 , 43 J. The The OTES 195 , 144 T But un- But N ). 198 AX . 633 (2017). et seq. EV , 150 T L. R The President’s Power To The President’s [71:4 [71:4 ORNELL EVIEW ) 11/26/19) 11:33 AM R , 102 C AW ELETE L D OT N 197 O (D Proposed Regulations on Debt-Equity: Beyond Inversions DOCX 2. DMINISTRATIVE DMINISTRATIVE A Mr. Secretary, Take the Juice Out of Corporate Expatriations Mr. The President’s Power to Tax ME REVIEW ME note 194, at 654 n.92. _ Treasury’s Unfinished Work on Corporate Expatriations Treasury’s Unfinished Work Robert Rizzi, see supra 26 (2016) (providing the history of § 385); Stephen E. Shay, J. Clifton Fleming, And the infrequency with which the Executive exercises this rev- And the infrequency with which the at 706–07. at 683–84 (discussing I.R.C. § 385 and Treas. Reg. § 1,385-1 at 683–84 (discussing I.R.C. § 385 and Treas. N ’ 196 AX Professor Daniel Hemel points out an important anomaly of federal anomaly of out an important Daniel Hemel points Professor ABREU GREENSTEIN ABREU .Id. .Id. .Id. , 473 (2014); .T 194 , 71.4_ 196 197. Shay, E. Stephen If, as Professor Hemel maintains, it is the case that executive power that is If, as Professor Hemel maintains, it Our last three examples of scholarship illustrate our thesis that differences our thesis that scholarship illustrate examples of Our last three 194. J. Hemel, Daniel 198. Hemel, 195 OTES ORP routinely exercised in non-tax contexts is rarely exercised in the tax context, routinely exercised in non-tax contexts other fields of law. Therefore, like then tax is, in this sense, different from identifies a difference between tax and Professor Puckett, Professor Hemel Puckett, Professor Hemel seems other fields of law. Moreover, like Professor of ‘tax exceptionalism.’” to see the difference as “another example C N 710 nuanced in the engaging for a substitute becomes if the label analysis future engages in. Puckett himself that Professor of each difference examination using the explored without of law can be fully tax and other fields between titled In his provocatively exceptionalism. idea of tax Tax ALR tax law. In most fields of law new regulations reveal their costs and benefits their costs of law new regulations reveal tax law. In most fields that the political ben- can be reasonably confident directly, so the President that is not the political costs of the regulations. However, efits will offset the thereby raising rev- tax regulations curb perceived abuses, case in tax. Some they increase taxes. like these have a political cost because enue. Regulations one example. under section 385 are The regulations promulgated President, whose administration is responsible for the tax increase will bear administration is responsible for the President, whose benefit of political but he will not reap all of the possible that political cost, Because only made possible by the new revenue. the increased spending used the new reve- spending measures, even if Congress Congress can enact at least some of the credit for that nue to send a check to every taxpayer, the political costs of such regulations, benefit would go to Congress. Hence, cannot be fully offset by the benefits pro- which fall entirely on the President, Professor Hemel argues, means that the vided by increased revenue. This, revenue raising through tax reg- incentives generally weigh against unilateral ulations. like Professor Puckett, Professor Hemel makes no overt use of tax exceptional- like Professor Puckett, Professor Hemel to game theory and develops a modelism in his analysis. Instead, he turns to enue raising power testifies to that. Jr. & Robert J. Peroni, (2016) (arguing that Treasury should use section 385 to restrict foreign parent tax advantages (2016) (arguing that Treasury should use section 385 to restrict foreign parent tax advantages and counter tax avoidance). 41829-adm_71-4 Sheet No. 30 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 30 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 31 Side A 12/06/2019 13:58:53 200 Why Lenity . 1045 (2016). Mayo Founda- Mayo EV But despite his deference to tax Id. That difference That difference .L.R O 199 Chevron 711 711 , 81 M deference for agency statutory We agree with Professor Hemel agree with Professor Hemel We Id. Chevron ) 11/26/19) 11:33 AM XCEPTIONAL , said that the Court was ‘not inclined to E ELETE D OT OT ,N Professor Grewal examines whether len- Professor Grewal note 20. In the post, as in the article discussed note 20. In the post, as in the article discussed N O Court to decline to extend 201 , (D supra Mayo DOCX IFFERENT 2. :D AX T ME REVIEW ME Why Lenity Has No Place in the Income Tax Laws Lenity Has Why _ note 20. Professor Hemel engages in a similar analysis in a more recent note 20. Professor Hemel engages in a similar He additionally notes that “[t]he effort to end tax exceptionalism scored additionally notes that “[t]he effort to end tax exceptionalism He Id. supra at 698–710. His conclusion is that it should not, and the reason is that the provi- that it should not, and the reason is His conclusion is ABREU GREENSTEIN ABREU .Id. .Id. 202 71.4_ 201. Grewal, Andy 200. Hemel, 199 202 Like Professors Puckett and Hemel, Professor Andy Grewal identifies a dif- and Hemel, Professor Andy Grewal Like Professors Puckett M K be salutary. The difference that he identifies is that in tax, unlike in other areas of law, the the law, once again makes no overt use of the concept use of the term, in the blog post, Professor Hemel of areas other in unlike tax, particular difference between he focuses on one in his analysis. Instead, of tax exceptionalism in that is identifies he that law could tax differently in administrative tax and other fields of law to suggest why treating difference The salutary. be if tax is not treated differently, fears that He of interest groups is asymmetrical. alignment a one-way ratchet: any IRS action that increases “the administrative law of tax will become while any action that reduces liabilities costs will trigger litigation, tax liabilities or compliance or relieves compliance burdens will go unchallenged.” well justify treating tax differently in certain cases— he identifies might that the asymmetry indeed it might have persuaded the carve out an approach to administrative review good for tax law only.’” carve out an approach to administrative review interpretations and the notice-and-comment requirement for agency rules—do not apply in requirement for agency rules—do interpretations and the notice-and-comment the tax domain.” Justice John Roberts, in the case of a major victory in January 2011 when Chief Education and Research v. United States tion for Medical if it had been pointed out. But our point is not that tax should always be treated the same as if it had been pointed out. But our point is not of other fields of law but that the analysis should involve the precise evaluation of the import wish that he would also avoid resort to we might the particular difference identified. While treat tax as exceptional. does not actually point for us is that he the important the term, above, Professor Hemel uses the term tax exceptionalism. He defines it as “the long-held view above, Professor Hemel uses the term tax exceptionalism. as that general principles of administrative law—such blog post in which he considers ways in which Bullock v. IRS, 2019 U.S. Dist. LEXIS 126921 blog post in which he considers ways in which July 30, 2019) was “the latest in a series of cases that the might be seen as auguring (D. Mont. Hemel, end of ‘tax exceptionalism.’” matters, but the concept of tax exceptionalism plays no role in his analysis. plays no role in tax exceptionalism the concept of matters, but ity—a canon of statutory construction pursuant to which ambiguities should construction pursuant to which ity—a canon of statutory in construing pro- of criminal defendants—should apply be resolved in favor liability may be at A of the Code, in cases where criminal visions of Subtitle stake. 2019] in of his authority exercise the President’s between difference the understand of law. in other fields authority exercise of that tax and his ALR sions of Subtitle A differ from those of criminal statutes in an important way. in an important way. differ from those of criminal statutes sions of Subtitle A ference between tax and a specific field of law—criminal law. In and a specific field of law—criminal ference between tax Tax Laws Has No Place in the Income While we wish he had resisted the temptation to invoke the concept of tax ex- to invoke the concept the temptation wish he had resisted While we work with that we catalogue his his observations, as a gateway to ceptionalism the concept he does not employ like them, because, of the non-exceptionalists rigor. as a substitute for analytical C Y 41829-adm_71-4 Sheet No. 31 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 31 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 31 Side B 12/06/2019 13:58:53 M K C Y and 205 203 When such a justifica- [71:4 [71:4 206 could lead to the reflexive it did so because the taxpayer EVIEW For example, he considers the Mayo ) 11/26/19) 11:33 AM R 204 AW ELETE L refused to “carve out an approach to refused to “carve out an approach to D OT N O Mayo (D DOCX 2. DMINISTRATIVE DMINISTRATIVE will be read only as a manifesto against tax excep- will be read only as a manifesto against A . An example illustrates the difficulty: difficulty: illustrates the . An example ME REVIEW ME Mayo _ ex ante at 1051. at 1055. ABREU GREENSTEIN ABREU .Id. .Id. .Id. 71.4_ 204 205 206. 44, 55 (2011). States, 562 U.S. v. United Educ. & Res. Found. for Med. Mayo 203 Because it is impossible to determine what the lenient interpretation of interpretation to determine what the lenient Because it is impossible of Subtitle A. He is does not stop with his analysis But Professor Grewal As Professor Grewal points out, criminal statutes proscribe specific behav- specific proscribe statutes criminal out, points Grewal As Professor from gross income under § might prefer to exclude an item taxpayers Most 61, but other prefer to immediately taxpayers might favor inclusion. Also, most taxpayers might those might prefer to capitalize taxpayers 162, but other § deduct expenses under a single lenient words, the income tax laws do not yield expenses. In other be bad for another. might be good for one taxpayer might interpretation—what What is striking about Professor Grewal’s analysis is its nuance. He not What is striking about Professor Grewal’s tion is provided, tax should be treated differently. tion is provided, tax should be treated differently.
712 ALR ior. Therefore, where there is an ambiguity, the lenient interpretation can the lenient interpretation is an ambiguity, where there ior. Therefore, of the Code of Subtitle A the provisions determined. By contrast, be easily on impose tax consequences rather they specific behavior; do not prohibit cannot be interpretation the lenient As a consequence, specific behavior. easily determined concludes that lenity should be, Professor Grewal Subtitle A provisions those provisions. should not apply to difference between that his identification of a profound careful to point out statutes “does not mean that the the provisions of Subtitle A and criminal laws.” rule of lenity has no place in the tax provisions of Subtitle F, which “create requirements for taxpayers (including provisions of Subtitle F, which “create and withhold on amounts transferred obligations to file returns, pay taxes, civil and criminal sanctions),” often are enforced by both . . . and had “not advanced any justification” for doing so. had “not advanced any justification” reaches a different conclusion with respect to the application of the rule of reaches a different conclusion with rule of lenity should apply. lenity. Here, he concludes that the the identification of a difference be- only resists the temptation to jump from of tax as exceptional, but tween tax and criminal law to the pronouncement apparent rejec- the Supreme Court’s he goes even further. He cautions that in tion of the concept of tax exceptionalism assumption that tax should never be treated differently from other fields of assumption that tax should never be law. He fears that tionalism, heralding the victory of the anti-exceptionalists and ending any tionalism, heralding the victory of treatment. This worry is a reminder inquiry into whether tax deserves special that when the Supreme Court in law only,” administrative review good for tax 41829-adm_71-4 Sheet No. 31 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 31 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 32 Side A 12/06/2019 13:58:53 : , Of Lenity, ETWORK N . Kristin E. . Kristin Administering LOG Altera IRB Guidance: The B 713 713 continues to be assailed, as continues to be assailed, ROFESSOR . (2009). Professor Hickman P EV , consistent with the position she , consistent with the position Mayo Brief of Amicus Curiae Professor Brief of Amicus AW note 21, at 1795. More recently, note 21, at 1795. More See , L Mayo .L.R . T ) 11/26/19) 11:33 AM supra In Search of the ‘Modern’ Skidmore Standard In Search of the ‘Modern’ Brief of Amicus Curiae Professor Kristin Brief of Amicus XCEPTIONAL .S the question of difference must re- must of difference question the E See ELETE d precisely the question the Supreme Court Court the Supreme d precisely the question ICH D OT OT case, she also urged the Supreme Court to hear case, she also urged the Supreme Court to ,N N O Home Concrete (D , 2009 M . 905 (2007). She also examined the particular question . 905 (2007). She also examined the particular EV DOCX IFFERENT R Brief of Professor Kristin E. Hickman As Amicus Curiae in As Amicus Brief of Professor Kristin E. Hickman 2. :D Florida Bankers AX note 32, at 19. , advocating the position the Court eventually embraced. Hick- , advocating the position AX deference that was at issue in deference that was at .T T A United States v. Quality Stores, Inc., 572 U.S. 141 (2014), No. 12– , ME REVIEW ME supra Mayo _ 207 Chevron . 1235 (2007), at one point even questioning whether the Government’s . 1235 (2007), at one point even questioning , 26 V EV Quality Stores, see (July 28, 2015), https://taxprof.typepad.com/taxprof_blog/2015/07/hick , Jones, provides our final example of scholarship that examines the im- example of scholarship that examines provides our final .L.R LOG 208 note 171. She submitted an amicus brief in note 171. She submitted The Tax Court Delivers An APA–Based Smackdown B See, e.g. , and KPMG ABREU GREENSTEIN ABREU OLUM supra 71.4_ 208. tackle work early Hickman’s Professor 207. if the And Forgetting this caveat is just as much a mistake as its opposite—believing its opposite—believing as much a mistake is just as caveat this Forgetting Professor Kristin Hickman, the pre-eminent champion of anti-tax excep- champion of anti-tax the pre-eminent Kristin Hickman, Professor M K AXPROF man-altera-corp-subs-v-commissioner-the-tax-court-delivers-an-apa-based-smackdown.html. man-altera-corp-subs-v-commissioner-the-tax-court-delivers-an-apa-based-smackdown.html. brief in the In a recent amicus of the deference to be accorded other IRS guidance. Kristin E. Hickman, of the deference to be accorded other IRS Land of Tax Code Interpretation No Man’s T plication of differences between tax and other fields of law. In between tax and other fields plication of differences 2019] ALR man, 107 C in tax exceptionalism. The beauty of Professor Grewal’s beauty of Professor The in tax exceptionalism. that he analysis is other words, mistake. In makes neither main an important part of the analysis, unencumbered by baggage involving by baggage the analysis, unencumbered important part of main an tax exceptionalism. some scholars have predicted, adopting the analysis we are advocating will be even more im- adopting the analysis we are advocating some scholars have predicted, portant. eventually answered in also conducted important empirical work on Treasury’s claimsalso conducted important empirical work on and practices in promulgating to legal challenge[s]” for failure to ad- regulations and found many regulations “susceptible Hickman, requirements. here to APA rulemaking Professor Hickman has lauded the Tax Court’s application of the APA in Professor Hickman has lauded the Tax Court’s criminal prosecutions of tax shelter promoters might bring the rule of lenity to bear on defer- bring the rule of lenity to bear might criminal prosecutions of tax shelter promoters for deference. Kristin E. Hickman, ence decisions, thereby weakening the argument Chevron tionalism, the taxpayer’s appeal from the DC Circuit’s decision that the Anti-Injunction Act precluded Circuit’s decision that the Anti-Injunction Act precluded the DC the taxpayer’s appeal from pre-enforcement review of a Treasury regulation. had taken in her scholarship. Her approach was to engage in a detailed examination of the had taken in her scholarship. Her approach issue, Kristin E. Hickman & Matthew D. Krueger, Hickman, Kristin E. Hickman In Support of Respondents, United States v. Home Concrete & Supply, Kristin E. Hickman In Support of Respondents, United States v. Home Concrete & Supply, LLC, 566 U.S. 478 (2012), No. 11-139, https://papers.ssrn.com/sol3/papers.cfm?abstract_ id=1989098, and E. Hickman In Support of Petitioners, Florida Bankers Ass’n v. US Dep’t of the Treasury, E. Hickman In Support of Petitioners, Florida 136 S. Ct. 2429 (2016), No. 15–969, https://papers.ssrn.com/sol3/papers.cfm?abstract served as an amicus to the Supreme Court in the _id=2739989. Professor Hickman has also cases, such as appeals of other important Support of Neither Party 1408, https://www.americanbar.org/content/dam/aba/publications/supreme_court_pre view/briefs-v3/12-1408_np_amcu_keh.pdf, and to the Court of Appeals for the Ninth Circuit C Y 41829-adm_71-4 Sheet No. 32 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 32 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 32 Side B 12/06/2019 13:58:53 M K See 212 C Y , 89 Professor 210 L.J. 1717 (2014). UKE , 63 D [71:4 [71:4 She urges abandonment 214 EVIEW ) 11/26/19) 11:33 AM R note 21, at 1760–61. AW ELETE L D supra OT N O (D 211 DOCX 2. DMINISTRATIVE DMINISTRATIVE Administering the Tax System We Have Administering the Tax System We Professor Hickman explains that the differing treat- the differing that explains Hickman Professor A Professor Hickman argues that since the policy ob- the policy Professor Hickman argues that since 209 213 note 209, at 1753–58. ME REVIEW ME _ Response Precedents: Rational Ignorance or Deliberate Strategy Agency-Specific supra note 15 & notes 190–191 and accompanying text. at 1723. . 89, 93 (2010). at 1722. EV ABREU GREENSTEIN ABREU .Id. .Id. .Id. .Supra .L.R 71.4_ 209. Hickman, E. Kristin [i]f courts perceive that an increasing number of new Treasury regulations are more [i]f courts perceive that an increasing number oriented toward non-revenue-raising programs and . . . [courts] goals, may be more Professor Hickman considers some specific statutory provisions, including considers some specific statutory provisions, Professor Hickman 210 211 212 213. Hickman, 214. for the or- have implications argues that her findings may also Professor Hickman Regarding the Anti-Injunction and Declaratory Judgment Acts, Professor Regarding the Anti-Injunction and EX jective of these provisions is protection of the revenue-raising function of tax, jective of these provisions is protection accordingly. their application ought to be limited T in Cohen v. United States, 650 F.3d 717 (D.C. Cir. 2011). Brief of Professor Kristin E. Hick- in Cohen v. United States, 650 F.3d 717 (D.C. on Rehearing En Banc, 650 F.3d man As Amicus Curiae in Support of Plaintiffs-Appellants Nev- 717 (D.C. Cir. 2011), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1646543. perspective of her work, Professor Hick- ertheless, despite the decidedly anti-exceptionalist cases there are rational and deliberate in some man’s analysis is nuanced; she recognizes that administrative law doctrinal norms. general reasons for agency-specific deviations from Kristin E. Hickman, 714 We Have, System the Tax ALR Hickman sees in this data an argument against general exceptionalism in the data an argument against general Hickman sees in this “premised on the reve- the tax law, which, she observes, is administration of of tax. nue-raising functions” ment of tax is grounded in a concern for protecting the revenue-raising func- the revenue-raising a concern for protecting is grounded in ment of tax contains current tax system points out that the Code. But she tion of the raising policy objective have as their principal that do not many provisions as tax long ago identified which Stanley Surrey provisions revenue—those five-yearshows that over a Indeed, she expenditures. the number of period constituted be- regulations involving tax expenditures proposed and final matters involving both percent; adding regulations on tween thirty and forty that do not number of final and proposed regulations objectives brings the percent. sixty-five as their sole objective to have raising revenue the Anti-Injunction Act and Declaratory Judgment Act, discussed above, Act and Declaratory Judgment Act, the Anti-Injunction and provisions of the Code permitting retroactive application of Treasury the Code permitting retroactive application and provisions of which treat tax differently from regulations. In her analysis, these provisions, belief that tax is exceptional— other fields of law, derive from the underlying that tax is fundamentally concernedagain, a belief based on the assumption with revenue-raising. of the one-size-fits-all approach to these provisions. of the one-size-fits-all approach to these Hickman advises that: ganizational structure of the IRS. Hickman, ganizational structure of the IRS. Hickman, 41829-adm_71-4 Sheet No. 32 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 32 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 33 Side A 12/06/2019 13:58:53 and 217 715 715 Administering the Tax System Administering the Tax 215 AW L ) 11/26/19) 11:33 AM XCEPTIONAL E AX IS ELETE D OT :T OT ,N N O (D 216 DOCX IFFERENT 2. ONCLUSION :D C AX note 60. have argued, tax embraces social policy goals in addi- have argued, tax embraces social policy T notes 208–216 and accompanying text. note 209, at 1757. ME REVIEW ME 218 _ supra supra supra at 1760. are incisive and nuanced. They represent precisely the kind of issue- They represent precisely the are incisive and nuanced. ABREU GREENSTEIN ABREU .Id. 71.4_ 217. Hickman, The belief that tax is exceptional is ancient; its roots go back at least as far The belief that tax is exceptional is ancient; 215. Hickman, 216 218. Avi-Yonah, Tax is different from other fields of law, just as any field of law is different Tax is different from other fields of Like the analyses offered by Professors Hemel and Grewal in the articles offered by Professors Hemel and Grewal Like the analyses inclined to construe pre-enforcement challenges to those regulations as unrelated to the unrelated to as those regulations to challenges pre-enforcement to construe inclined scope of [the Anti-Injunction and thus beyond the and collection of taxes, assessment of [the should revisit the scope courts do, Congress Regardless of what the . . . Act]. Act]. Judgment Act and the Declaratory Anti-Injunction proposes that: Professor Hickman retroactivity, And regarding to make and the IRS] broad authority of [Treasury curtailing the] [Congress consider to authorizing retroactivity only example, For . . . retroactive. all of their regulations while bringing could protect the revenue-raising function counter abusive transactions alignment with general system into closer aspects of the tax other, less revenue-oriented awareness of the In the meantime, however, greater judicial administrative-law norms. areas IRS administrative efforts in other, non-revenue-raising scope of Treasury and to adopt retroactive to examine Treasury and IRS decisions may prompt the courts critical eye. regulations with a more M K tion to the goal of revenue-raising. And as we have argued in previous schol- their arship, the idea of tax as a compendium of rules interpreted according to 2019] ALR from others. But the proposition that tax is exceptional claims more than from others. But the proposition that in kind, that it is unique. difference—it claims that tax is different In the context of modern United as the jurisprudence of the Roman Empire. that the foundation of tax exceptionalism States tax theory, we have suggested revenue-raising, which alienates tax is the dogma that tax is essentially about to other fields of law. Moreover, pro- from the pursuit of social justice central of the tax law from contamination by the tecting the revenue-raising function has led to a demand for hyper- competing policy goals of tax expenditures of tax that would reduce tax clarity, which in turn has led to a jurisprudence like Professors Kristin Hickman to crystalline rules. But as scholars discussed above, Professor Hickman’s discussion in discussed above, Professor We Have be applied to the questions when tax by-issue analysis that we believe should law and when tax should be treated dif- should be treated like other fields of replace the knee-jerk invocation of ferently. This contextual analysis should tax exceptionalism. Reuven Avi-Yonah C Y 41829-adm_71-4 Sheet No. 33 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 33 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 33 Side B 12/06/2019 13:58:53 M K 224 227 222 C Y . In 219 228 Mayo , we are not inclined to and the Eighth Circuit and the Eighth Circuit [71:4 [71:4 220 EVIEW ) 11/26/19) 11:33 AM R AW ELETE L D OT N O provides the correct template. It neither provides the correct template. It (D Henderson Clay Products DOCX Mayo ), who have engaged in nuanced scrutiny of a va- ), who have engaged in nuanced scrutiny 2. DMINISTRATIVE DMINISTRATIVE 226 In the absence of such justification A notes 208–216 and accompanying text. notes 179–184 and accompanying text. notes 188–193 and accompanying text. notes 201–207 and accompanying text. notes 194–200 and accompanying text. ME REVIEW ME _ supra ) and two works of scholarship (by Professors Zelenak ) and two works of supra supra supra supra 221 notes 5, 7–8 and accompanying text. ) that have invoked tax exceptionalism, and we have sought to tax exceptionalism, and we have sought ) that have invoked notes 162–171 and accompanying text. notes 155–161 and accompanying text. 223 Mayo and Hickman Zelenak, Puckett, Hemel, Grewal, Hickman, (emphasis added) (citations omitted). Mayo States, 562 U.S. 44, 55. (2011). Educ. & Res. v. United for Med. Found. 225 ABREU GREENSTEIN ABREU .Supra .Supra .See .Supra . See supra .Supra .See .See .Id. .See .See . the Court began by observing that the taxpayer had “not advanced any the Court began by observing that the 71.4_ The Court’s analysis in In this Article we have attempted a more comprehensive examination of examination a more comprehensive we have attempted In this Article 221 222 219 220 223 224 228 225 226 That is precisely the analysis the Supreme Court employed in That is precisely the analysis the Supreme 227 carve out an approach to administrative review good for tax law only. To carve out an approach to administrative the importance of maintain- the contrary, we have expressly ‘[r]ecogniz[ed] of administrative action.’” ing a uniform approach to judicial review opinion in denies that tax differs from other fields of law nor endorses the application of denies that tax differs from other fields tax exceptionalism by taking on what we think is at the heart of the tenacity is at the heart on what we think by taking tax exceptionalism of law in many from other areas that tax is different The feeling of the concept: is affirmatively who do not agree that tax exceptionalism ways. Even those should be useless and able to agree that the concept is harmful should be if the proposition that ground alone. We have posited that abandoned on that should be useful; is true, then invoking tax exceptionalism tax is exceptional ways that tax is differ- to the analysis of the various it should add significantly in fact adds nothing to proposition that tax is exceptional ent. However, the two judicial opinions As evidence we have proffered the analysis of difference. in (Judge Wisdom’s opinion show that the concept ends up playing no constructive analytical role. By show that the concept ends up playing of three scholars (Professors Hemel, contrast, we have examined the work 716 the de- constrains false, normatively and descriptively is both meaning, plain of the threatens the legitimacy of tax, of a robust jurisprudence velopment tax bar. of diversity in the to the relative lack likely contributes IRS, and ALR riety of ways in which tax is different from other fields of law without making riety of ways in which tax is different that tax is exceptional. any significant analytical use of the proposition Mayo standard of review to Treasury justification for applying a less deferential to the rules of any other agency.” Department regulations than we apply It then concluded that: “ and Puckett Grewal, 41829-adm_71-4 Sheet No. 33 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 33 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 34 Side A 12/06/2019 13:58:53 note 1, at 20. supra 717 717 ) 11/26/19) 11:33 AM XCEPTIONAL Caron has lamented that exceptionalists has lamented Caron E ELETE D OT OT ,N N O (D DOCX 229 IFFERENT 2. :D note 2, at 538. But if tax scholars put aside the idea that tax is AX T supra ME REVIEW ME _ ABREU GREENSTEIN ABREU 71.4_ In sum, we do not deny that tax is different from other fields of law. What deny that tax is different from other In sum, we do not The liberation of courts and scholars from the unhelpful meta-question of unhelpful meta-question scholars from the of courts and The liberation 229. Paul Dean) Professor (now For example, M K exceptional, they will be able to apply to tax the interpretive and process theories germane to the interpretive and process theories exceptional, they will be able to apply to tax Johnson, law generally, ending the “bankruptcy of tax parochialism.” we claim is that each difference should be evaluated in a specific context to difference should be evaluated we claim is that each as a result of the be treated differently in that context determine if tax should difference.
2019] the Goldilocks Court finds the tax. Instead, to of deference level a different of tax is different treatment of whether Case-by-case determination solution: likewise. should do other courts and scholars We think that warranted. First, salutary consequences. have at least two is exceptional will whether tax questions important, specific their attention on them to focus it will allow law in order to deter- or different from, other fields of about how tax is like, apply to tax. Second, how a particular doctrine should mine whether and of the useless concept of taxfreed from the distraction courts exceptionalism and techniques to bear on tax the analytical methods and scholars can bring generally. developed for law ALR often ignore trends in statutory construction and legislative process theory developed mainly often ignore trends in statutory construction and legislative process theory developed mainly in nontax areas. Caron, C Y 41829-adm_71-4 Sheet No. 34 Side A 12/06/2019 13:58:53 A 12/06/2019 No. 34 Side Sheet 41829-adm_71-4 41829-adm_71-4 Sheet No. 34 Side B 12/06/2019 13:58:53 M K C Y litigation on behalf of Mayo [71:4 [71:4 EVIEW ) 11/26/19) 11:33 AM R A AW ELETE L D OT N O PPENDIX (D A DOCX 2. DMINISTRATIVE DMINISTRATIVE A ME REVIEW ME _ ABREU GREENSTEIN ABREU The cartoon reproduced above was the brainchild of now-Judge Ronald L. Buch of The cartoon reproduced above was the 71.4_ *** Goodbye National Muffler*** National Muffler*** Goodbye 718 ALR the Government. The cartoon is reproduced with the permission of Judge Buch and Mr. Mr. the Government. The cartoon is reproduced with the permission of Judge Buch and Rothenberg. the U.S. Tax Court. It was shown as the last slide on a panel discussion held at the meeting the U.S. Tax Court. It was shown as the last of the Tax Section Meeting at the Midyear held Practice on Administrative of the Committee S. of the American Bar Association on January 21, 2011. The panel consisted of Gilbert Kathryn A. Zuba, Special Counsel, Rothenberg, Acting Deputy Assistant Attorney General; LLP, and McCutchen IRS Office of Chief Counsel; and Ronald L. Buch, then at Bingham Buch was moderated by Christopher Rizek, partner at Caplin and Drysdale. Kudos to Judge initials on the jubilant dancer’s shirt be the for the cartoon, and for having the wit to make of the S. Rothenberg, who participated in much GSR—Gilbert 41829-adm_71-4 Sheet No. 34 Side B 12/06/2019 13:58:53 B 12/06/2019 No. 34 Side Sheet 41829-adm_71-4