The Perfect Process is the Enemy of the Good Tax: Tax's Exceptional Regulatory Process

49 Pages Posted: 7 Mar 2016 Last revised: 18 Mar 2016

Date Written: March 6, 2016


Many courts and academics critique existing tax exceptionalism or the ability of the federal income tax to be created, applied, or interpreted differently from other laws. Critics have successfully complained that the Treasury Department, and the IRS as a bureau of the Department, issues guidance implementing the Internal Revenue Code using different processes from those required by the Administrative Procedure Act. At the same time, courts are increasing the level of deference given to this guidance to conform to that given other agencies. This article responds to these critics by urging they re-focus their attention on the objectives of administrative law and comparisons to other agencies’ procedures as opposed to limiting their assessment to the APA. Moreover, this article examines some risks of forcing procedural uniformity on the tax system. First, the agency would risk being inundated with information to comply with the APA. The agency could be captured by those submitting information, be forced to reduce the amount of guidance it issues, and be thwarted in its ability to accomplish other agency directives. Second, pushing the agency to develop ex ante regulations responsive to the most vocal commentators, most likely those seeking tax reduction, threatens established heuristics implementing the complicated Internal Revenue Code. To satisfy the APA’s procedures risks minimizing the agency’s use of its expertise to carry out its congressional-established mission.

Keywords: taxation, tax policy, tax exceptionalism, Administrative Procedure Act

Suggested Citation

McMahon, Stephanie Hunter, The Perfect Process is the Enemy of the Good Tax: Tax's Exceptional Regulatory Process (March 6, 2016). Virginia Tax Review, Forthcoming, U of Cincinnati Public Law Research Paper No. 16.07, Available at SSRN:

Stephanie Hunter McMahon (Contact Author)

University of Cincinnati - College of Law ( email )

P.O. Box 210040
Cincinnati, OH 45221-0040
United States
513-556-4206 (Phone)
513-556-1236 (Fax)

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