Christopher R. Pietruszkiewicz (LSU) has published Does the Internal Revenue Service Have a Duty to Treat Similarly Situated Taxpayers Similarly?, 74 U. Cin. L. Rev. 531 (2005).  Here is part of the Introduction:

Nearly two decades ago, Professor Lawrence Zelenak considered whether the courts should require the Internal Revenue Service (IRS) to be consistent in the treatment of similarly situated taxpayers. A number of high profile cases and an intervening statutory change have occurred since his article was written, insisting that attention to this issue be revived.

Professor Zelenak concluded that “it is appropriate for courts to require the Service to afford one taxpayer the same favorable treatment it has given all other similarly-situated taxpayers, even if the treatment is inconsistent with that mandated by Congress.” I do not believe that a duty of consistency exists; however, it does not follow that the IRS has the discretion to treat similarly situated taxpayers differently….

[C]ourts should adopt a uniform abuse of discretion standard of review under § 7805(b), promoting more uniformity than the duty of consistency imposed on the IRS by a few courts. A duty of consistency, premised on a mistaken view of a 1965 case, International Business Machines Corp. v. United States, invites courts to create law that is not grounded in substance but in the laudable goal of consistency. Instead, application of the abuse of discretion standard under § 7805(b) permits review of a decision of the agency charged by Congress with the administration of tax law and the court’s determination is not predicated on the substantive issue before it.

Adoption of an abuse of discretion standard, however, is simply the first step. Congress should amend § 7805(b) to permit courts to review decisions of the IRS under an abuse of discretion standard not only for applying a ruling “without retroactive effect,” but also to permit review of decisions of the Secretary of the Treasury to apply a ruling prospectively.18 Such an amendment would eliminate a long-abandoned vestige of the law and would remove the retroactive-prospective distinction with respect to private letter rulings in much the same way Congress removed the distinction with respect to regulations. This symmetry of review would recognize the current state of the law and permit an abuse of discretion review by an appropriate judicial forum for either retroactive or prospective application.