Jonathan Choi (Minnesota; Google Scholar), The Case For a Tilt Toward Revenue in Tax Administration (reviewing Brian Galle (Georgetown; Google Scholar) & Stephen Shay (Boston College; Google Scholar), Admin Law and the Crisis of Tax Administration, 101 N.C. L. Rev. __ (2023) (reviewed by Blaine Saito (Northeastern; Google Scholar) here):

Tax regulations and subregulatory guidance abound with apparent giveaways to taxpayers, favorable interpretations with little or no statutory justification. Examples include the check-the-box rules, the waiver of 382(l)(5) net operate loss carryforward limitations during the financial crisis, and many more. On the other hand, it’s hard to think of cases where Treasury or the IRS has deviated from the statute at taxpayers’ expense. The typical explanation for this asymmetry is standing doctrine: if my tax bill is too high because of an agency rule, I can sue the government, but if it’s too low, nobody can sue to raise it. Now, a terrific new article by Brian Galle and Stephen Shay considers the implications of this “tilt against revenue” for administrative law. 

Galle and Shay bring a fresh perspective to the classic debate on administrative tax exceptionalism. They suggest that the tilt against revenue cuts against the formalist, anti-exceptionalist position (most famously promoted by Kristin Hickman) that tax regulations should follow the same procedural rules that apply to all other regulations. Instead, they suggest that courts should counter-act the tilt against revenue by applying administrative law requirements more leniently to Treasury and the IRS. …

One of the article’s best features is that it deftly navigates the difficult line between normative and positive arguments. Many tax scholars may find Galle and Shay’s arguments persuasive as a normative matter but have lingering doubts as a matter of positive law. Consider the basic case against exceptionalist tax administration: the Administrative Procedure Act purports to apply to all agencies equally, and nothing in the statute justifies special treatment for the IRS. But as Galle and Shay argue, courts must make normative policy judgments all the time in tough cases, and their normative judgments are the basis of much of the common law surrounding the APA. Thus normative judgments are unavoidable, and perhaps even desirable, even when one takes a positivist view of statutory administrative law.

Whether you agree or disagree, Galle and Shay’s new article makes a valuable contribution to the literature on tax administration and is well worth a read.