Substance over Form? Phantom Regulations and the Internal Revenue Code

This paper addresses the appropriate response to tax statutes that call for the issuance of regulations, but that have been ignored by the Secretary. The courts and the IRS have taken the unusual step of treating these statutes as self-executing, notwithstanding the absence of regulations, and have invoked phantom regulations to enforce the statutes. Several commentators have analyzed the Tax Court\u27s and the IRS\u27s approaches, but have focused mostly on cases interpreting delegations found in the Internal Revenue Code. Because those cases themselves are inconsistent, it is not possible to extract a clear rule from analysis of those cases alone. Surprisingly, a close examination of non-tax sources reveals a clear (if imperfect) solution to the problems posed by spurned delegations. This paper examines these overlooked authorities, and concludes that phantom regulations should never be employed by courts, the IRS, or taxpayers. Rather, if the IRS wishes to give effect to a delegation, it must promulgate rules pursuant to the statutorily mandated method (i.e. notice-and-comment rulemaking). Though the IRS has issued informal notices purporting to give effect to statutory delegations, these notices lack the force and effect of law, the government\u27s arguments notwithstanding. If the taxpayer is aggrieved by the Secretary\u27s failure to promulgate regulations, his only recourse is found in section 706(1) of the Administrative Procedure Act, which allows the taxpayer to compel the Secretary to issue regulations

Section 7525’s Last Gasps: The Tax Practitioner Privilege and the Selective Waiver Doctrine

Congress blundered badly by defining the Federally Authorized Tax Practitioner privilege by cross-reference to the attorney-client privilege. The relationship between a client and a FATP is wholly different from that between a client and an attorney, and the application of attorney-client principles to the FATP privilege has given rise to confused (and sometimes contradictory) judicial opinions. This paper attempts to stem the confusion with respect to one aspect of the FATP privilege. The proper application of the selective waiver doctrine to the FATP privilege remains an open question, though courts seem poised to reject it. They have rejected it numerous times in the context of attorney-client privilege claims, and generally find the doctrine incompatible with that privilege\u27s basic purposes. This paper argues that courts should accept the selective-waiver doctrine with respect to the FATP privilege, notwithstanding any contrary jurisprudence on the attorney client privilege. Part II briefly discusses the selective waiver doctrine, and outlines the reasons most commonly cited for its adoption or rejection. Part III describes the FATP privilege and details the IRS\u27s and practitioners\u27 common assumption that the selective waiver doctrine will not apply to it. Part IV argues that section 7525\u27s text demands instead that the doctrine always apply to the privilege. Part V examines statements in section 7525\u27s legislative history that may contradict this conclusion

Discriminatory Intent Claims Under Section 2 of the Voting Rights Act

This Article addresses a new controversy over whether Section 2 of the Voting Rights Act prohibits laws that exhibit “only” discriminatory intent, in the absence of discriminatory results. Lower courts have long embraced an intent approach for Section 2. And the Department of Justice has rested its entire ongoing case against Georgia’s controversial voting bill on an intent approach. However, this Article shows that the Supreme Court’s decision in Brnovich v. DNC effectively rejects the intent approach to Section 2. In April 2023, the Eleventh Circuit reversed its prior cases and now rejects an intent theory. This puts in peril numerous voting rights challenges in the southeastern United States. This Article urges Congress to add an intent test to Section 2, offers draft language for Congress to codify, and explains the anomalies and inequities that may arise if the legislature fails to act

Legislative Entrenchment Rules in the Tax Law

Can one Congress tie the hands of a later Congress? That is the issue posed by legislative entrenchment rules. Generally, a statute creates a legislative entrenchment rule whenever it says that a subsequent statute will be effective only if it is enacted or phrased in a specific way. Some legislative entrenchment rules require a future Congress to make a specific reference to an existing statute if it wishes to amend or create exceptions from that statute. Others impose a general, heightened clarity requirement, stating that amendments or modifications to an existing law must be made “expressly.” Still other rules state that future provisions of law that are not contained in a particular title or in a particular type of act must be disregarded. Legislative entrenchment rules have raised difficult interpretive issues in the tax laws. In a recent case involving over $1 billion of income, Capital One Financial Corp. v. Commissioner, the Tax Court voided a statute because it was not codified in the manner prescribed by a legislative entrenchment rule. But in other circumstances, legislative entrenchment rules have been largely ignored. The Internal Revenue Service (IRS) and the Tax Court have repeatedly concluded that § 7805(e) of the Internal Revenue Code (IRC or Code) creates an exception from the Administrative Procedure Act’s (APA’s) requirements, even though the APA’s legislative entrenchment rule seemingly prohibits this interpretation. The special statutory interpretation issues raised by legislative entrenchment rules have not received close attention from the IRS, the Tax Court, or taxpayers. Instead, these rules have been either applied strictly or cursorily dismissed without regard to the broader issues at stake. This lack of attention has led to inconsistent results and has added confusion to an already complex area of law. This Article analyzes how legislative entrenchment rules affect the interpretation of subsequently enacted tax statutes and argues that legislative entrenchment rules—however formulated—should not automatically nullify subsequent statutes that fail to satisfy those rules’ requirements. Instead, like all other statutes, a legislative entrenchment rule should be subject to the doctrine of implied repeals. That is, if a later enacted statute irreconcilably conflicts with a legislative entrenchment rule or is intended to substitute for it, the later enacted statute should trump the legislative entrenchment rule. This Article also examines several types of legislative entrenchment rules that have caused (or may cause) controversy in the tax laws. Section 446(e) of the Code, the provision at issue in Capital One, receives special attention because of the enormous number of dollars at stake and because the Tax Court construed that statute in a manner directly contrary to this Article’s thesis. Finally, this Article argues that the Tax Court and the IRS have given insufficient weight to the APA’s legislative entrenchment rule in finding that some temporary regulations, issued without notice and comment, never expire

Legislative Entrenchment Rules in the Tax Law

Can one Congress tie the hands of a later Congress? That is the issue posed by legislative entrenchment rules. Generally, a statute creates a legislative entrenchment rule whenever it says that a subsequent statute will be effective only if it is enacted or phrased in a specific way. Some legislative entrenchment rules require a future Congress to make a specific reference to an existing statute if it wishes to amend or create exceptions from that statute. Others impose a general, heightened clarity requirement, stating that amendments or modifications to an existing law must be made “expressly.” Still other rules state that future provisions of law that are not contained in a particular title or in a particular type of act must be disregarded. Legislative entrenchment rules have raised difficult interpretive issues in the tax laws. In a recent case involving over $1 billion of income, Capital One Financial Corp. v. Commissioner, the Tax Court voided a statute because it was not codified in the manner prescribed by a legislative entrenchment rule. But in other circumstances, legislative entrenchment rules have been largely ignored. The Internal Revenue Service (IRS) and the Tax Court have repeatedly concluded that § 7805(e) of the Internal Revenue Code (IRC or Code) creates an exception from the Administrative Procedure Act’s (APA’s) requirements, even though the APA’s legislative entrenchment rule seemingly prohibits this interpretation. The special statutory interpretation issues raised by legislative entrenchment rules have not received close attention from the IRS, the Tax Court, or taxpayers. Instead, these rules have been either applied strictly or cursorily dismissed without regard to the broader issues at stake. This lack of attention has led to inconsistent results and has added confusion to an already complex area of law. This Article analyzes how legislative entrenchment rules affect the interpretation of subsequently enacted tax statutes and argues that legislative entrenchment rules—however formulated—should not automatically nullify subsequent statutes that fail to satisfy those rules’ requirements. Instead, like all other statutes, a legislative entrenchment rule should be subject to the doctrine of implied repeals. That is, if a later enacted statute irreconcilably conflicts with a legislative entrenchment rule or is intended to substitute for it, the later enacted statute should trump the legislative entrenchment rule. This Article also examines several types of legislative entrenchment rules that have caused (or may cause) controversy in the tax laws. Section 446(e) of the Code, the provision at issue in Capital One, receives special attention because of the enormous number of dollars at stake and because the Tax Court construed that statute in a manner directly contrary to this Article’s thesis. Finally, this Article argues that the Tax Court and the IRS have given insufficient weight to the APA’s legislative entrenchment rule in finding that some temporary regulations, issued without notice and comment, never expire

The President’s Criminal Immunity

This Article addresses a monumental question that the Supreme Court will soon decide: does the President enjoy criminal immunity for her official acts? This Article argues that she does. The potential criminal immunity for official acts has drawn exceptionally sharp critiques. Some scholars believe that the immunity is nonsensical, absurd, or downright offensive. Judge Florence Pan of the D.C. Circuit even posited that criminal immunity would allow the President to murder her political enemies with SEAL Team Six. This Article shows that the critics are profoundly mistaken. Criminal immunity for a president’s official acts finds a strong foothold in Supreme Court jurisprudence. As important, criminal immunity for official acts applies more narrowly than the critics believe. Immunity would allow a president to fearlessly exercise her constitutional prerogatives but would not allow her to bribe, steal, or murder

Discriminatory Intent Claims Under Section 2 of the Voting Rights Act

This Article addresses a new controversy over whether Section 2 of the Voting Rights Act prohibits laws that exhibit “only” discriminatory intent, in the absence of discriminatory results. Lower courts have long embraced an intent approach for Section 2. And the Department of Justice has rested its entire ongoing case against Georgia’s controversial voting bill on an intent approach. However, this Article shows that the Supreme Court’s decision in Brnovich v. DNC effectively rejects the intent approach to Section 2. In April 2023, the Eleventh Circuit reversed its prior cases and now rejects an intent theory. This puts in peril numerous voting rights challenges in the southeastern United States. This Article urges Congress to add an intent test to Section 2, offers draft language for Congress to codify, and explains the anomalies and inequities that may arise if the legislature fails to act