Embracing the TBOR

Abstract

When Congress codified the Taxpayer Bill of Rights (the “TBOR”) in 2015 the tax bar largely shrugged, but that is a mistake. Section 7803(a)(3) is not just another iteration of the phrase Congress used to christen legislation designed to reign in perceived IRS abuses in the 80’s and 90’s, when Congress enacted three different pieces of legislation that bore the name “Taxpayer Bill of Rights.” Despite their lofty titles, none of those enactments contained a single amendment to the Internal Revenue Code that used the word “right,” or employed the language of rights. By contrast, section 7803(a)(3) actually refers to “taxpayer rights” and lists ten items. Therefore, despite the claims of its promoters that the 2015 legislation simply restates rights already provided by the Code, the codification of the TBOR has the power to transform the tax practice and the relationship between taxpayers and the IRS. In this Article we explain why.

Specifically, we make three arguments. First, construing the 2015 codification of the TBOR as a meaningless gesture ignores the well-established canon of statutory construction against surplusage, as well as its important corollary: when Congress amends a statute it intends to change something. Second, the TBOR significantly enhances taxpayers’ normative basis for demanding legal remedies for violations of their rights because it invokes procedural justice, using the language of rights where only government duties existed before. Third, the TBOR may have actually created taxpayer rights.

We do not argue that all taxpayer rights should be enforced either all the time or to the same extent, as that could be disruptive or even catastrophic for tax administration and may not be necessary to allow the TBOR to achieve its goals. But we do maintain that the codification of the TBOR can transform the legal environment so that demands for enforcement can be weighed by the courts on a case by case basis, in light of all the facts and circumstances, which include the identity and attributes of the taxpayer.

Recent events confirm the importance of the TBOR and suggest that the tide of taxpayer indifference has begun to turn. On November 8, 2017, Facebook filed a complaint against the IRS, citing the TBOR’s “right to appeal a decision of the Internal Revenue Service in an independent forum,” section 7803(a)(3)(E)), as the basis for its request that the court “[i]ssue an injunction or mandamus-like relief ordering Defendants to provide Facebook access to IRS Appeals.” We believe that Facebook is just the first of many taxpayers who will formally embrace the TBOR as a source of rights and as the basis for crafting remedies to enforce those rights.

Keywords: Tax, Taxpayer Rights, Bill of Rights, Taxpayer Bill of Rights, TBOR, Nina Olson, Performative, Expressive Function, Normative Basis for Enforcement, Rights, Facebook Litigation, Rights

JEL Classification: K34, K23, K41, K10,K20, K30, K40, K00