The Federal Tax Implications of Bush V. Gore

57 Pages Posted: 22 Mar 2001

See all articles by Paul L. Caron

Paul L. Caron

Pepperdine University - Rick J. Caruso School of Law

Date Written: March 15, 2001


About the only thing that all of the Justices of the Supreme Court agreed upon in the recent Bush v. Gore decision was the general principle that federal courts should defer to state courts on matters of state law. As Justice Breyer put it in his dissent, the Justices only differed as to whether "this case [was] one of the few in which we may lay that fundamental principle aside." But federal courts regularly lay aside that fundamental principle in tax cases. Where the Internal Revenue Code expressly incorporates state law, federal courts in a tax proceeding frequently must decide how much weight to give to a state court ruling on state law. In 1967, the Court relied on the Erie doctrine in Commissioner v. Estate of Bosch in requiring federal courts to give "proper regard" to state court decisions. Although in theory the "proper regard" standard appears consistent with the Bush v. Gore deference principle, this Article shows that in practice the federal courts instead have given "no regard" to state court decisions in concluding in over one-half of the cases applying Bosch over the past thirty-four years that the state court judge had misapplied state law. The enormous interest generated by the Bush v. Gore decision makes this a particularly propitious time to re-visit this nettlesome question of federal tax law. The Article argues that the federal courts should return to the Erie roots of the "proper regard" test in order to give effect to the Bush v. Gore deference principle. If this approach is followed, the Bush v. Gore decision will leave a more lasting imprint in the federal tax law than in constitutional or election law.

Keywords: Tax, Bush v. Gore, Erie

JEL Classification: H20, H24, H29

Suggested Citation

Caron, Paul L., The Federal Tax Implications of Bush V. Gore (March 15, 2001). Available at SSRN: or

Paul L. Caron (Contact Author)

Pepperdine University - Rick J. Caruso School of Law ( email )

24255 Pacific Coast Highway
Malibu, CA 90263
United States
310.506.4266 (Phone)

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