How Agencies Communicate: Introduction and an Example, by Susan Morse and Leigh Osofsky

by Guest Blogger — Monday, Jan. 29, 2018

Would you like to hear from the government? Many people might say no. Or at least, not usually.

But, of course we hear from the government all the time. Many times, this contact comes from administrative agencies. Agencies shape, among many other things, the air we breathe, the taxes we pay, and the question of who may cross our borders. This online symposium, How Agencies Communicate, considers how agencies do and should try to explain what they mean, and how we do and should listen to them.

Agencies can choose from a broad menu of communication strategies. They can make final regulations by following the structured and lengthy notice-and-comment process under the Administrative Procedure Act. In addition, agencies often communicate entirely outside this statutorily prescribed rulemaking process. Agencies communicate with advisories, letters, announcements and press releases. They post on social media. They tweet.

Agencies’ communication involves choices about how and when to convey information. Even the structured promulgation of final regulations is not a cookie-cutter exercise. Agencies choose how to prioritize and draft regs, Preambles, and other guidance. Their toolbox includes not only the written word, but also visual and other communication approaches.

The entries in this symposium consider issues related to agency communication. They tackle the descriptive question of how agencies communicate. They evaluate the weight that communications carry, both as a matter of doctrine and as a matter of practical effect. They consider the question of what weight communications should carry. And they discuss normative principles that can identify better and worse ways for agencies to communicate.

We have recently written about the communication technique of examples, especially in regulations. Even though some courts decline to respect regulatory examples as independent sources of law, many practicing lawyers say that, when they see a new piece of guidance, they read the examples first to understand what the law means.

Just last month, in December 2017, millions of Americans got to experience the power of examples. Here is what happened. On December 20, 2017, Congress passed a big tax bill. One of many changes capped federal deductions for state and local taxes to $10,000, effective January 1, 2018. This raised a pressing issue. Usually, individuals can deduct an expense in the year they write and send a check. But what about a prepayment of taxes? If an individual paid 2018 taxes in the last few days of 2017, could the person deduct the prepayment on his or her 2017 return, thus avoiding the sting of the $10,000 cap? Existing law did not squarely address the issue. Meanwhile, taxpayers had only 12 calendar days to prepay.

Just in case prepayment would support an uncapped 2017 deduction, swarms of taxpayers rushed to prepay their property taxes. Lines of taxpayers snaked around municipal offices. Some officials were overwhelmed. Others encouraged prepayments, for instance through executive orders. Some actions even were explained as an effort to circumvent the new tax law.

The IRS clarified with an advisory on December 27, 2017. It explained that “[a] prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017.” While it is not hard to see that deductibility of a prepayment turns on the meaning of “assessed,” the average reader could be forgiven for not understanding what “assessed” meant.

Two examples in the advisory came to the rescue. In the first, the taxpayer has already received a property tax bill. This taxpayer can deduct a payment of the bill in 2017, even if the bill is not due until 2018. In the second example the taxpayer has not yet received a property tax bill, because the state has not “assessed” property taxes. According to the advisory, this second taxpayer cannot deduct a prepayment made in 2017.

After issuance of the advisory, it was clear that, at least in the IRS’s view, if a property tax bill had been issued, a taxpayer could pay it and deduct. If not, no deduction. This allowed local government and news outlets to focus their attention on when a particular jurisdiction assessed property taxes and to engage new questions, such as how taxpayers could prepay assessed taxes that were normally escrowed as part of monthly mortgage payments.

The IRS advisory also raises broader questions. For instance, was it appropriate for the IRS to issue its guidance in the way that it did? Administrative scholars have long examined agencies’ ability to make de facto law through policy statements and similar guidance, and this issue was certainly present in the IRS’s use of the advisory. The advisory might be better understood not as the de jure law, but rather as the government’s litigating position. Instead of saying that certain prepayments were “not deductible,” should the government have instead said that it intended to challenge the deductibility of such payments?

Another question raised by the advisory involves the use of examples. The IRS created hypothetical fact patterns, kind of like cases, and then went on to decide them. The examples shaped the reader’s understanding of the abstract statements in the advisory. Why did the IRS choose to communicate in the way that it did and what should we make of this choice?

In our recent article, we examine the common phenomenon of regulating by example. Many agencies include examples in their communication of regulatory content. We argue that examples expand agencies’ abilities to effectively convey their view of the law through a concrete communication approach. But we also point out that regulated parties naturally extrapolate guiding principles from examples. We think that, as a default, regulatory examples should be treated as co-equal with other means of communicating law. We explain how meaning can be made from regulatory examples through a process that integrates case-law like reasoning and the rest of the regulatory and statutory scheme.

The use of examples is one of many facets of agency communication. This symposium provides a wonderful opportunity to consider broadly how agencies communicate and why those choices matter. We look forward to the thoughts and different perspectives of our co-contributors.

Susan Morse is the Angus G. Wynne, Sr. Professor in Civil Jurisprudence at Texas Law and Leigh Osofsky  is a professor of law at the University of Miami School of Law.

This post is part of a symposium entitled How Agencies Communicate. You can read all the posts here.

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One thought on “How Agencies Communicate: Introduction and an Example, by Susan Morse and Leigh Osofsky

  1. Annette Nellen

    Thanks for the interesting posts. The IR from the IRS is not binding guidance as it was not published in the Internal Revenue Bulletin although “Internal Revenue Service information or press releases” are included as “authority” under 1.6662-4(d). I think the IR on the need for a liability to be both real and paid was calling attention to existing law. For example, Estate of Hoffman, TC Memo 1999-395, aff’d 87 AFTR2d 2001-2119 (4th Cir, unpublished). Arguably, when a cash method taxpayer pays a liability that does not exist, but is accepted by a payee, it is a deposit and not deductible until applied to an existing liability (see referenced case). Likely the IR was something the IRS could issue quickly to clarify year end confusion. At least the IR is “authority” for Section 6662 and 6694 purposes, although not high level in the weighting process. In contrast, an FAQ on the IRS website is neither IRB authority nor Section 6662 authority (for more, see For more on the relevance of publication in the IRB, see Reg. 601.601(d)(2)(ii)(a) and the bottom of this IRS page –


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