Charlene D. Luke (Florida; Google Scholar), In (Tax) Hindsight: When Should the Tax System Ease Taxpayer Regrets? (JOTWELL) (reviewing Emily Cauble (Wisconsin; Google Scholar), Taxpayers’ Tax Election Regrets, 77 Tax Law. 77 (2023)).

Emily Cauble explores the extent to which the tax system allows taxpayers “to benefit from hindsight” in her article, Taxpayers’ Tax Election Regrets. Cauble uses concrete tax election examples to categorize the types of hindsight that cause taxpayers regret and to offer recommendations on how the tax system should approach hindsight to “bring more coherence to tax law’s approach and better align its approach with underlying policy goals.”

Cauble’s focus is on explicit, rather than implicit, tax elections; thus, the focus is on elections that require a formal indication of choice to the IRS. Cauble further considers the availability of filing a late election, revoking an election, and filing a protective election. Cauble analyzes formal election processes to highlight when an election-related decision may bring a taxpayer regret and when a taxpayer is able to use hindsight to make an adjustment to the original choice. The article concludes with recommendations for improvements to how the tax system allows hindsight, with the recommendations guided by tax policy goals relating to revenue-raising, fairness, and administrability.

Cauble describes four types of hindsight that arise in the context of tax elections and then groups them into two pairs, one pair that is generally benign or even enhances the fairness of the tax system and one pair that is generally harmful to the tax system. …

Cauble uses multiple concrete examples to illustrate the current operation of these hindsight types and to recommend adjustments. …

This brief review of Cauble’s article only focused on one example—§ 754 elections—but Cauble explores many other interesting examples (such as the § 83(b) election and the § 475(f) mark-to-market election), and those descriptions encourage the reader to develop their own examples. Cauble shows how the tax law responds in the context of elections to taxpayer regret caused by hindsight. As a result, not only does Cauble’s article provide a comprehensive and engaging window into what could otherwise seem a somewhat dry procedural issue, her article could be used as a roadmap for developing future research and insight into how the tax system should react to taxpayers’ regret over tax decision making.

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