November 01, 2018 The Tax Lawyer

Tax Reform in a “World Without Chevron”: Will Tax Regulations Withstand the Review of Justice Gorsuch?

Vol. 71, No. 4 - Summer 2018

Niki Ford

Abstract

    The United States Supreme Court case of Chevron, U.S.A. v. Natural Resources Defense Council, Inc. has governed administrative deference jurisprudence for over thirty years. In general, this case requires that courts defer to an administrative agency’s interpretation of a statute if the statute is ambiguous and the agency’s interpretation is permissible. The Court has made it clear that this unquestionably high standard of deference applies with full force in the tax context. Thus, Chevron has been relied upon by both federal and state courts faced with cases that involve the interpretation of a tax statute by the Service or state taxing authority. However, with the addition of Justice Gorsuch—an outspoken critic of Chevron’s high standard of deference—to the High Court, the future of the Chevron doctrine is now very much in question.

    This Article discusses the history of the Chevron doctrine, and its potential to change under today’s Supreme Court. This Article also analyzes what an end to Chevron would mean for federal and state tax authorities and taxpayers.

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