Taxpayers or Governments? Default as Determinant in Canadian and US Supreme Court Tax Decisions
Canadian Journal of Political Science / Revue canadienne de science politique Vol. 38, No. 3 (Sep., 2005), pp. 605-625
Posted: 15 Sep 2015 Last revised: 15 Oct 2015
Date Written: August 1, 2005
This paper demonstrates that an important and overlooked guide to understanding Canadian and US Supreme Court decision making in tax cases is the “default,” or the party to whom the court will decide in favour of if tax language is ambiguous. While statutory interpretation methods influence the overall manner in which courts approach tax-law decision making, the default is a more concrete guide to evaluating Canadian and US Supreme Court decisions. The paper first explores the statutory interpretation approaches referenced in Canadian and American Supreme Court tax law cases. The paper then examines the histories of defaults, including the cases in which they emerged and the rationales given for their adoption. Third, based on original research, the paper concludes that defaults have a profound effect on income tax decisions by, in Canada, the Supreme Court favouring the taxpayer and, in the United States, the Court deferring to the Internal Revenue Service.
Keywords: judicial discretion, tax law, comparative law
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