Judith Freedman (Oxford University, Faculty of Law) presents Interpreting Tax Statutes: Tax Avoidance and the Intention of Parliament, 123 Law Q. Rev. 53 (2007), at Pennsylvania today as part of its Center for Tax Law and Policy Seminar Series hosted by Chris William Sanchirico and Reed Shuldiner. Here is the part of the Conclusion:

Under the guise of purposive statutory interpretation the courts are making distinctions based not on the wording of the statute in context, but on external, policy considerations. The judicial approach requires a proper framework, which could be provided by layered legislation, including a principles-based GAAR.

Parliamentary intention can be expressed only through the text of the statute, albeit read in context. Obviously the best way to give effect to parliamentary intention in tax law will be to express policy clearly in the specific legislation and to have a coherent underlying framework for the tax system. Policy-based drafting could assist here. It is, however, unrealistic to suppose that full coherence will be introduced into the tax system in the near future or that legislation can be produced that will offer no opportunities to those skilled at devising tax schemes. A properly drafted GAAR, referring to principles that included, but were not limited to, economic substance, could give the judiciary the powers it needed to give full effect to parliamentary intention and prevent the frustration of specific legislation. It would not create any greater uncertainty than exists at present, but would increase clarity, transparency and legitimacy. Such a provision would take the courts beyond the normal rules of statutory construction, towards the bolder approaches currently being developed by the UK courts in other contexts, applying layered legislation by reading specific provisions in the context of general principles. This would not override parliamentary intention but would give it full effect.