Pre-Enforcement Litigation Needed for Taxing Procedures

89 Pages Posted: 5 Oct 2017

Date Written: October 4, 2017


Courts have opened tax guidance to procedural attack. Consequently, taxpayers who are found to owe tax may challenge the validity of the guidance implementing the tax if the procedure used by the Treasury Department in adopting the guidance failed to comply with the Administrative Procedure Act, in particular, with notice-and-comment. This increased willingness to consider tax guidance’s procedural defects offers little to most taxpayers unless they are also given a better means to raise procedural challenges. Under current law and in most circumstances, generally, taxpayers can bring a challenge only after they have been found to owe taxes in an audit and completed an internal IRS appeal process. This delay in the ability to challenge guidance reduces the likelihood taxpayers will challenge the procedure used to create a particular rule. Moreover, delayed litigation requires taxpayers to plan their affairs under the umbrella of guidance that might not survive a procedural challenge. To the extent procedural challenges are accepted in the tax context, this Article argues Congress should narrowly repeal its prior limitations on pre-enforcement litigation of those procedures. Everyone affected by the guidance should be permitted to litigate procedural questions for a period of time post-promulgation without the necessity of being found to owe taxes. This narrow exception would increase the certainty of tax guidance and encourage greater public participation in the guidance-formation process in a way that is sensitive to the fact that litigation imposes costs on the Treasury Department.

Keywords: APA, notice and comment, tax procedures, regulations, Tax Anti-Injunction Act

Suggested Citation

McMahon, Stephanie Hunter, Pre-Enforcement Litigation Needed for Taxing Procedures (October 4, 2017). Washington Law Review, Vol. 92, No. 1317, 2017, 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)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics