The conflict between the rule of lenity and administrative deference doctrines has drawn significant judicial attention recently (see prior coverage here ). I’ve posted on SSRN an essay that discusses some potential implications for the tax laws, and here’s the abstract: A controversy has emerged over how to interpret statutes under which the government can […]
Under the Congressional Review Act, the effective date of so-called “major” regulations must be delayed to give Congress a chance to veto them via a joint resolution. Major regulations are generally those that would have a $100+ million effect on the economy. See 5 USC 804(2)(A). See also 5 USC 804(2)(B) & (C) (providing other […]
In a post last week , my co-blogger Daniel Hemel explained how Section 707(a)(2)(A) may allow the IRS to deny the tax benefits associated with so-called carried interests, even in the absence of legislative action. That statute essentially grants the IRS the regulatory authority to alter the tax treatment of transactions between partners and partnerships, […]
Earlier this week, the Seventh Circuit issued its opinion in Roberts v. Commissioner , holding that a taxpayer’s efforts regarding his race horses amounted to a business under the tax code, and not a mere hobby, such that the taxpayer could enjoy various deductions. The court reversed the Tax Court’s contrary determination, finding that the […]
Tax season is right around the corner, and many Americans will soon discover that they paid more taxes in 2015 than they lawfully owed. On filing their returns, they will happily claim a tax refund. Suppose, however, that the President, with the support of Congress, decides that the rules should retroactively change. Rather than return […]
It has generally been quite difficult for taxpayers to challenge alleged abuses of the IRS’s regulatory authority. Under section 7421(a) of the tax code, courts lack jurisdiction over suits “for the purpose of restraining the assessment or collection of any tax.” Commentators generally believe that this statute, commonly referred to as the Anti-Injunction Act, prohibits […]
In a characteristically thoughtful post, my co-blogger Daniel Hemel considers a puzzle raised by the ongoing battle over the Obama administration’s decision to offer relief to some unlawful aliens. The Supreme Court, in United States v. Texas, will soon consider the legality of the administration’s actions under the “Deferred Action for Parents of Americans and […]
In my prior post, I considered proposed regulations issued by the Treasury and the IRS regarding management fee waiver transactions. See Treasury Department & IRS, Disguised Payments for Services, 80 Fed. Reg. 43652 (July 23, 2015). To cater to the majority readership of the Yale Journal on Regulation, that post viewed the issue through the lens […]
In a prior post, I described some issues related to regulatory severability, that is, a court’s decision to strike or not strike an entire regulation project when it finds that only a portion of it violates the law. In this post, I want to explain how principles of regulatory severability could doom some regulations recently proposed […]
In a prior post, I described some issues related to regulatory severability, that is, a court’s decision to strike or not strike an entire regulation project when it finds that only a portion of it violates the law. In this post, I want to explain how principles of regulatory severability could doom some regulations recently proposed […]
When Congress passes an Act, and a court finds a portion of it unconstitutional, questions of “severability” arise. That is, the court will consider whether it should strike the entire law, under the theory that without the constitutionally offensive portion, Congress would not never have passed the Act. I’ve been wondering whether this type of […]
In my prior post, I mused on the potential severability analysis for tax regulations that a court declared invalid. I noted that courts do not perform severability analysis when (for example) invalidating subsection (d) of a particular tax regulation and instead set aside only the particular regulatory language relevant to the taxpayer’s tax liability. My […]
In a prior post, “The IRS’s Mercenaries,” I explained how the IRS has taken extraordinary steps to battle Microsoft over the tax consequences of some of the company’s international transactions. In short, the IRS hired a private law firm to perform some audit and litigation related functions, and a federal district court is currently examining […]
I have previously written about various IRS regulations that contradict the clear language of tax code Section 36B. I recently re-examined the regulations and was only mildly surprised to find another provision that plainly exceeds the IRS’s rulemaking powers. Here, the IRS has simply discarded the statute’s joint return requirement for a segment of taxpayers […]
This week, Congressman Paul Ryan sent a letter to President Obama expressing concern that the nuclear deal with Iran would include special tax breaks for that country. The letter asks for a commitment to not extend such tax breaks during the remainder of the President’s term. Generally, under Section 901 of the tax code, U.S. […]