In a recent podcast episode, Tax Notes legal reporter Mary Katherine Browne discusses the potential fall of the Chevron doctrine and its implications for the tax world with Frank Agostino, founder and president of Agostino & Associates. The Chevron doctrine, established in 1984, requires courts to give deference to regulatory interpretations of ambiguous statutes as long as these interpretations are considered reasonable. However, recent Supreme Court cases, such as Loper Bright Enterprises v. Raimondo and Relentless v. Department of Commerce, suggest that the Court may be leaning towards overturning Chevron. This shift has been anticipated by many legal minds, as conservative justices have been critical of Chevron in recent years.
Frank Agostino explains that Chevron allows the executive branch to fill in the gaps of ambiguous laws passed by Congress, but critics argue that it gives too much power to agencies and infringes on the separation of powers. He suggests that a return to traditional rules of statutory construction and the Skidmore standard would be more appropriate, allowing courts to determine the best interpretation of the statute based on congressional intent and plain language. He believes that getting rid of Chevron will not lead to more litigation, but rather encourage agencies to create regulations consistent with legislative intent.
The potential impact of overturning Chevron on past tax cases, such as Oakbrook and the Coca-Cola case, is discussed by Frank Agostino. He points out that changes in court composition have already affected outcomes in some cases, regardless of Chevron deference. The removal of Chevron would likely lead to more collaboration between the IRS and taxpayers in crafting regulations, as agencies would no longer have the final say in interpreting ambiguous statutes. Agostino predicts that more cases will settle and the Administrative Procedures Act will be more strictly applied to the IRS.
Mary Katherine Browne and Frank Agostino also discuss how the potential fall of Chevron could impact the way tax laws are written by Congress. Agostino hopes that lawmakers will be more careful in drafting legislation to avoid ambiguity that leads to agency interpretation. He emphasizes the importance of grassroots advocacy in influencing tax legislation and ensuring fairness in tax policy. Ultimately, he believes that getting rid of Chevron will bring the tax system closer to the principles of separation of powers and lead to shorter and less complex tax laws.
In conclusion, the potential fall of the Chevron doctrine has significant implications for the tax world, with experts like Frank Agostino advocating for a return to traditional statutory construction principles. The shift away from agency deference could lead to a more collaborative approach to crafting tax regulations and potentially influence how tax laws are written by Congress. Overall, the anticipated changes could bring greater transparency, fairness, and simplicity to the tax system.
