This week, David Elkins (Netanya) reviews a new work by Tracey M. Roberts (Samford), W(h)ither Regulation? Hither to the Tax System, 43 Pace Env’r L. Rev. __ (forthcoming 2025):

Administrative law has undergone something of a sea change over the past few years. In a number of key cases, the Supreme Court established new doctrines concerning the authority to issue regulations and the procedure for promulgating them, the degree of deference owed to executive agencies’ interpretation of statutory provisions, the time permitted for challenging regulations, and the availability of trial by jury for those subject to certain statutory civil penalties. Combined, they present serious challenges to the administrative state. In this week’s timely article, Professor Tracey Roberts reviews the emerging administrative law jurisprudence and, in each instance, suggests how tax law might permit certain types of regulatory action to pass scrutiny.  

In Massachusetts v. EPA, the Court held that, under the major questions doctrine, regulations require clear Congressional authority (and, furthermore, that any failed attempt to pass legislation is viewed as legislative disapproval, which would forestall administrative efforts to address the issue). Seemingly the appropriate response to such a ruling would be to regulate via legislation, that is, to request that Congress enact by statute what that the executive would have promulgated by regulations. However, as the author notes, Congressional action is difficult because of the Senate filibuster: under current rules, a supermajority of 60 senators is needed to end a filibuster and force a vote. One means of overcoming the filibuster without obtaining the support of three-fifths of the Senate is via the Byrd rule, which applies to budget reconciliation, that is, bills that are limited to budgetary outlays and revenues and that conform to the budget resolution. Regulatory taxes fall within the purview of the Byrd rule and could therefore be passed with a simple majority of the Senate. Subsidies could also be enacted through budgetary reconciliation, but only if the bill also contained tax increases or spending cuts.

In Ohio v. EPA, the Court rigidly scrutinized the implementation of the notice and comment requirement and, discovering that one comment had not been addressed by the EPA, invalidated the regulations. Relying on Justice Barrett’s dissent, the author argues that the Court assembled claims, manufactured facts, granted unprecedented procedural shortcuts to states challenging the regulation, and set an unrealistic threshold of vigilance for the promulgating agency. The author then notes that some scholars have argued for tax exceptionalism, the view that generally applicable administrative law does not and should not apply to tax. While this view is not universally held, adopting it could circumvent Ohio v. EPA scrutiny.

In Loper Bright v. Raimondo, the Court overturned Chevron deference, the rule that courts should defer to an executive agency’s interpretation of legislation as long as the administration’s interpretation is a permissible construction of the statute. In Loper Bright, the Court held that the APA requires courts to decide all relevant questions of law and that they cannot therefore defer to administrative agencies. The author suggests that tax law may be shielded from some of what she describes as “chaos,” because Congress has explicitly delegated authority to the Department of the Treasury to develop regulations either through a general grant under I.R.C § 7805(a), or through specific grants in various legislative matters. Furthermore, under the older Skidmore doctrine (which may now be revived following the demise of Chevron), courts may consider an agency interpretation persuasive if it has been consistently applied. The author avers that while interpretations of environmental statutes often change each time the party in control of the executive branch changes, tax regulations have remained relatively stable.

Corner Post v. Board of Governors of the Federal Reserve System concerned the time bar for bringing an ultra vires claim that regulations exceed the scope of authority granted by Congress. The Court held that the time does not begin to run until the plaintiff is injured by a final agency action. In practice, this means that there is no effective time bar for challenging administrative action. Although Congress could address the issue by substituting a statute of repose (which runs from the date of the defendant’s last culpable act) for the current statute of limitations (which runs from the date of the plaintiff’s injury) in the APA, the author claims that deep divisions within Congress are likely to prevent such a change. However, she posits that this rule might not apply to tax regulation because tax administration and collection are matters of public right, as discussed in the final case in the list: SEC v. Jarkesy.

In Jarkesy, the Court decided that the Seventh Amendment entitles those subject to statutory claims bearing civil penalties that are legal (as opposed to equitable) in nature to trial by jury in an Article III court. The author claims that this is a cumbersome process that is challenging and time-consuming for inadequately staffed and poorly funded agencies. In her words, “If rational individuals decide whether or not to engage in illegal activity by weighing the possible gains from that activity against the likelihood, speed, and severity of punishment (as per classical deterrence theory), then the decision in Jarkesy undercuts administrative enforcement. By reducing the likelihood and the speed of punishment in venues where the severity of punishment is higher, Jarkesy encourages scofflaws.” However, the Court provided a public rights exception: claims that historically could have been tried exclusively by the executive and legislative branches may be resolved without a jury. Without providing an exhaustive list of such claims, the Court did mention collection of revenue and aspects of customs law. Thus, regulatory taxes may offer an attractive pathway to address harmful externalities.

Professor Roberts’ description of recent Supreme Court pronouncements in the field of administrative law and their practical implications for the administrative state is comprehensive and accessible. Her suggestion that regulatory taxation could be used to overcome some of the obstacles administrators now encounter is interesting. It is particularly noteworthy that relying on tax instead of proscription to regulate behavior, aside from the alleged lower constitutional barriers facing the former, aligns with the view of many economists and tax theoreticians who prefer regulatory taxes (known in the literature as “Pigouvian taxes”) and subsidies to regulatory proscription. Because they force market actors to internalize externalities, Pigouvian taxes and subsidies promote economic efficiency in a manner that regulatory proscription cannot. If the author’s analysis is current, then perhaps the Court is unwittingly (wittingly?) pushing us toward that worthwhile end.

Here is the rest of this week’s SSRN Tax Roundup:

Solomon Ater (Abuja), Tax Treatment of Non-Governmental Organisations Under the Tax Reforms Act, 2025 (2025)

Frederico Bertocchi (Genoa), Tax Directive on Global Minimum Taxation in Light of the Fundamental Freedoms (2025)

Tuhin Chaturvedi (RSM Kuwait), Are Kuwait’s Deemed-Profit Taxes “Income Taxes” for IFRS? And Why It Matters (2025)

Mary Cowx (ASU) & Jobn N.Kerr (BYU), Anti-Tax Avoidance Rules and the Real Effects on Foreign Investors (2025)

Stephen Day (King’s College London), Taxing Better: Using AI to Advance Democracy (2025)

Luís Calderon Gómez (Cardozo), Is Tax “Law”?, 94 Fordham L. Rev. __ (forthcoming 2026)

Zhong Chen (King’s College London), Jonathan Sangwook Nam (Hong Kong Polytechnic) & Yawen Shi (King’s College London), Beneath the Fold: The Effect of Local Newspaper Closure on Firm Tax Avoidance (2025)

Mark J. Cowan (Boise State), Joshua Filzen (Boise State) & Troy Hyatt (Boise State), Graduate Accounting Education After CPA Licensure Reform, 189 Tax Notes Fed. 1519 (2025)

Sara Drango (Berkeley), Sarah Moshary (Berkeley) & Bradley Shapiro (Chicago), California’s Firearm Excise Tax Is Almost Fully Passed on to Consumers (2025)

Rory Gillis (Western), A Qualified Rationale for Concurrent Carbon Pricing, in Cherie Metcalf & Stephanie Stern, Institutions for Effective Climate Action (forthcoming 2026)

Klaus Gottlieb (Monterey), From Myth to Math: A Tutorial on the Actuarial Valuation of Charitable Remainder Trusts Under I.R.C. § 7520 (2025)

Svea Holtmann (Mannheim), Anna-Sophie Braun (Catholic U. Eichstaett-Ingolstadt), Jae Cho (Swiss Fin. Inst.), Reinald Koch (Catholic U. Eichstaett-Ingolstadt) & Dominika Langenmayr (Catholic U. Eichstaett-Ingolstadt), Investment Effects of Quasi-Robot Tax: Evidence from South Korea (2025)

Jim Y. Huang (Toronto), A Fiscal Epistemology of Information: Mapping Evidence Through the X-Y Coordinate of Cross-Border Capital and Intergenerational Capacity (2025)

Jim Y. Huang (Toronto), Measuring Educational Friction: A Dual-Tension Framework for Ontario’s Funding & Governance Landscape (2025)

Abhishek Joshi, An Analysis of Interim Resolution Professional; Issues and Challenges (2025)

Abebe Tilahun Kassaye (Ethiopian Civil Service Univ.), The Role of Cash Register Machines on Tax Collection Efficiency in Addis Ketema Sub-City, Addis Ababa-Ethiopia (2025)

Ruben Lopez, The LAAM Framework: Operationalizing Fairness in Asymmetric Enforcement Systems (2025)

João Félix Pinto Nogueira (Int’l Bur. Fisc. Documentation), Georg Kofler (Vienna), Francisco Alfredo Garcia Prats (València), Werner C. Haslehner (Luxembourg), Eric Kemmeren (Tilburg), Michael Lang (Vienna), Stella Raventos-Calvo (AEDAF), Isabelle Richelle (Liège) & Alexander Rust (Vienna), Exemption of Inbound Dividends from Non-Corporate Taxes Under the Parent-Subsidiary Directive – Opinion Statement ECJ-TF 4/2025 on the Decision the CJEU of 1 August 2025 in Cases C-92/24 to C-94/24, Banca Mediolanum (2025)

Marisa Ouro (Extremadura), Times Change, Desires Change: Home Office and the 2025 Amendments to the Commentary of Article 5(1) of the OECD Model Convention (2025)

James R. Repetti (Boston College), Private Equity, Health Calamity: How Our Tax Laws Aid Private Equity Investment in Hospitals and Nursing Homes (2025)

Gayline Vuluku (Vienna), Erich Kirchler (Vienna) & Christian Bauer (Vienna), Treatment Remind Request! A Natural Field Experiment in a Tax Amnesty Context (2025)