The Function of Forms
12 Pages Posted: 27 Mar 2009
Date Written: March, 27 2009
It is always fun when two of the greatest minds on the current federal bench disagree. It is even more fun when their disagreement provides a terrific opportunity to explore the relative roles of functionalism and formalism in legal analysis. This article looks at the quarrel between Judges Frank Easterbrook and Richard Posner in the case of IN RE PAYNE over the meaning of the term "return" (as in "tax return") in tax and bankruptcy law. One prefers form to function and the other does not. Their disagreement provides a wonderful window into substance and form in tax administration.
This paper explores the function of the formal requirement found in the Tax Code (section 6011) that taxpayers "make a return or statement according ot the forms and regulations prescribed by the Secretary." Part I maps out the borderlands of tax administration and bankruptcy. Part II reviews the facts and opinions in PAYNE, which presents a common interplay of tax and bankruptcy administration. Part III explains why Judge Posner's opinion about applying the tax administration concept of "return" to bankruptcy cases is right and Judge Easterbrook's is wrong. Finally Part V looks at the likely ill effects of the Bankruptcy Abuse Prevention and Consumer Protection Act (which I and many others call "BARF," standing for Bankruptcy Abuse Reform Fiasco") on the many cases like PAYNE.
Keywords: Posner, Easterbrook, tax administration, bankruptcy, nonfiler, discharge, nondischargeable tax, return, formalism, functionalism, substitute for return, 6020, failure, filing
JEL Classification: K2, K23, K3, K34, K4, K42
Suggested Citation: Suggested Citation