Will the Supreme court allow Treasury to keep getting away with murder?
For tax geeks with an interest in administrative law, the oral argument before the Supreme Court in the case CIC Services is as good as it gets. Finally, the Supreme Court will address whether, or the extent to which, Treasury will continue to enjoy preferential treatment among federal agencies in having its tax rules and regulations largely shielded from basic norms of administrative law and judicial review.
Judicial deference to Treasury, arising from the government’s need for revenue, has for years allowed Treasury and the IRS to blatantly disregard those norms and other statutorily mandated processes. Despite that, this article argues that the Supreme Court should rule in favor of Treasury and against CIC and other taxpayers who seek to invalidate Treasury action on a pre-enforcement basis.
The rationale is simple: CIC and plaintiffs in the other cases that seek to invalidate Treasury actions (1) are very powerful companies or associations, or companies involved in questionable conduct; (2) are on the wrong side of an important public policy; and (3) seek to invalidate actions they dislike, in many cases after having intensely lobbied against the actions before Treasury’s adoption of them. Allowing such preemptive actions will result in powerful taxpayers and associations (1) filing endless lawsuits that seek to invalidate (and seek injunctions that stay) Treasury actions they do not like, and (2) seriously impeding Treasury’s ability to do its valid job.
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