King v. Burwell, the Affordable Care Act, and Deference to Administrative Interpretations of the Internal Revenue Code

Journal of Taxation of Investments, Fall 2015, at 29

Case Legal Studies Research Paper No. 2016-16

Posted: 1 Jun 2016

See all articles by Erik M. Jensen

Erik M. Jensen

Case Western Reserve University School of Law

Date Written: May 31, 2016

Abstract

In King v. Burwell, the Supreme Court concluded in 2015 that, despite some arguably straightforward language in the Affordable Care Act suggesting otherwise, Congress intended that “applicable taxpayers” be eligible for refundable tax credits whether they acquired their health insurance on an exchange created by a state or one established by the federal government. This article discusses the statutory interpretation issues involved in King, and also addresses another issue with potentially long-lasting effect on the tax law as a whole. Although the result in King was consistent with regulations the Treasury Department and Internal Revenue Service had issued under the Act, the Court, somewhat surprisingly, did not base its decision on so-called Chevron deference to those regulations. The Court instead made an independent determination, or so it said, of the meaning of the relevant statutory provisions. This article considers when, after King, Chevron deference is appropriate in the tax area and when it is not. And it discusses why that distinction mattered in a case where the substantive result would have been the same whether or not the Court had deferred to the regulations.

Keywords: King v. Burwell, Affordable Care Act, Chevron deference, Exchange established by the State, applicable taxpayer

JEL Classification: K34

Suggested Citation

Jensen, Erik M., King v. Burwell, the Affordable Care Act, and Deference to Administrative Interpretations of the Internal Revenue Code (May 31, 2016). Journal of Taxation of Investments, Fall 2015, at 29; Case Legal Studies Research Paper No. 2016-16. Available at SSRN: https://ssrn.com/abstract=2787275

Erik M. Jensen (Contact Author)

Case Western Reserve University School of Law ( email )

11075 East Boulevard
Cleveland, OH 44106-7148
United States
216-368-3613 (Phone)
216-368-2086 (Fax)

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