Custom-Tailored Law: When Statutory Interpretation Meets the Internal Revenue Code

Abstract

When it comes to statutory interpretation, the traditional approaches fail to consider how the laws being interpreted by the courts were actually made. Instead, they tend to presume a uniform lawmaking process. In reality, the lawmaking process tends to be highly variable, both among, and even within, different areas of law. Traditional interpretive approaches also fail to consider the actual institutional capabilities of Congress or the courts. Textualist approaches give primacy to the words that Congress chose. By doing so, they implicitly assume that legislators accurately constructed the statutory text but pay no attention to whether the actual lawmaking process was reliable or trustworthy. By contrast, purposivist approaches idealize the role of judges by assuming they have the capacity to uncover the purposes that motivated lawmakers to enact what they did. But whether judges indeed have the capacity to discern Congress’s intent might be influenced by whether the interpreters are subject-matter specialists or generalists. In short, the traditional approaches are unsuccessful to the extent they fail to account for the quality of statutory texts or the quality of courts interpreting those texts.

One-size-fits-all approaches might cause judges to fall short in fulfilling their role to accurately interpret statutory text as faithful agents of Congress. The faithful-agent model assumes that the role of courts, as agents of Congress, is to interpret statutory text to reflect congressional intent. This model gives lawmaking deference to Congress consistent with the Constitution’s separation of powers. Failing to place what Congress said into the context of what it actually did could hinder judges from accurately interpreting laws consistent with Congress’s intent. Likewise, ignoring the expertise of courts considering the meaning of statutory texts might result in imprecise or incomplete interpretations.

Although scholars have recognized that ready-made interpretative approaches, like ready-made clothing, might be a poor fit, this Article is the first to apply these insights to tax law by exploring the suitability of a custom-tailored interpretive doctrine specifically for the Internal Revenue Code, arguably the mother of all statutory regimes. In so doing, this Article finds that tax seems to be especially well-suited to a bespoke statutory interpretive approach, with experts involved in conceptualizing and writing tax laws as well as a specialized Tax Court with national jurisdiction interpreting the laws. This Article contends that when courts interpret federal tax laws, they should explicitly and consistently take account of these unique characteristics.

Keywords: statutory interpretation, tax