A problem of remedy: Responding to treasury's (lack of) compliance with administrative procedure act rulemaking requirements

George Washington Law Review

Volumn 76, Issue 5, 2008, Pages 1153-1215

  Hickman, Kristin E ^a  

^a UNIVERSITY OF MINNESOTA LAW SCHOOL   (United States)

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EID: 54949090440     PISSN: 00168076     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (321)

1. Marbury v. Madison, 5 U.S. (1 Cranch) 137, 147 (1803).
2. Preston v. Sturgis Milling Co., 183 F. 1, 19 (6th Cir. 1910).
3. The I.R.C. typically delegates authority to promulgate regulations to the Secretary of the Treasury, and Treasury formally issues regulations interpreting the I.R.C. See, e.g., I.R.C. § 7805(a) (2000) (granting general authority to develop "all needful rules and regulations for the enforcement of" the I.R.C.); id. § 1502 (giving the Secretary of the Treasury broad specific authority to adopt regulations for determining the tax liabilities of affiliated groups of corporations). Nevertheless, IRS attorneys play a prominent role in the process of developing Treasury regulations. See INTERNAL REVENUE MANUAL § 32.1.1.4.4 (2004);
4. see also LEANDRA LEDERMAN & STEPHEN W. MAZZA, TAX CONTROVERSIES § 1.04 (2d ed. 2002) (comparing Treasury and IRS involvement in regulation drafting);
5. Paul F. Schmid, The Tax Regulations Making Process - Then and Now, 24 TAX LAW. 541, 542-46 (1971) (describing historic process for promulgating Treasury regulations). Accordingly, readers should understand references in this Article to Treasury and its practices in promulgating Treasury regulations as including both Treasury and the IRS.
6. See Kristin E. Hickman, Coloring Outside the Lines: Examining Treasury's (Lack of) Compliance with Administrative Procedure Act Rulemaking Requirements, 82 NOTRE DAME L. REV. 1727, 1740-59 (2007) (documenting methodology and findings of study of 232 regulatory projects for which Treasury published notices of proposed rulemaking, temporary regulations, or final regulations in the Federal Register between January 1, 2003, and December 31, 2005); see also Administrative Procedure Act, 5 U.S.C. §§ 551-59, 701-06 (2000 & Supp. IV 2004).
7. See Hickman, supra note 4, at 1747-48.
8. See, e.g., Boeing Co. v. United States, 537 U.S. 437, 446 (2003) (outlining dispute over validity of Treas. Reg. § 1.861-8(e)(3)); Swallows Holding, Ltd. v. Comm'r, 515 F.3d 162, 165-66 (3d Cir. 2008) (summarizing taxpayer's substantive challenge to Treas. Reg. § 1.882-4(a)(3)(i) as an invalid exercise of rulemaking authority); Square D Co. v. Comm'r, 438 F.3d 739, 742-43 (7th Cir. 2006) (recognizing taxpayer's bases for challenging the validity of Treas. Reg. § 1.267(a)-3, all substantive).
9. Searching for such cases methodically has proven difficult; my efforts thus far have turned up only a small number of APA-based procedural challenges to Treasury regulations in the last thirty years. See Schwalbach v. Comm'r, 111 T.C. 215, 219 (1998) ("Petitioners' sole argument is that section 1.469-2(f)(6) . . . is invalid as applied to them because, petitioners allege, the Commissioner prescribed section 1.469-4(a) . . . without complying with the notice-and-comment requirements of the Administrative Procedure Act . . . ."); Griffin Indus., Inc. v. United States, 27 Fed. Cl. 183, 188 (1992) ("Griffin further argues that the animal waste exception of final Treas. Reg. § 1.48-9(g)(1) (1981) is invalid . . . because the notice requirements of the Administrative Procedure Act (APA) were not met . . . ."); Stephenson v. Brady, 927 F.2d 596, 1991 WL 22835, at *2-3 (4th Cir. 1991) (per curiam) (unpublished table decision) (concerning taxpayer's allegation that implementing Treasury regulation and related tax forms violated the APA notice-and-comment requirements); Dow Corning Corp. v. United States, 22 Cl. Ct. 184, 192 (1990) ("Plaintiff argues that Treasury Regulations § 1.994-2(b)(3) and (c)(2) were issued in violation of the Administrative Procedure Act because there was a failure to comply with the 'notice and comments' requirement."); Wing v. Comm'r, 81 T.C. 17, 26 (1983) ("Petitioner's first contention is that since the regulation was not promulgated in accordance with the Administrative Procedure Act . . . it is invalid."); Am. Med. Ass'n v. United States, 887 F.2d 760, 765 (7th Cir. 1989) ("The AMA argues, most generally, that the allocation regulations are invalid because the IRS did not comply with the notice and comment requirements of the Administrative Procedure Act (the 'APA') in promulgating the rules."); cf. Hosp. Corp. of Am. v. Comm'r, 348 F.3d 136, 145 n.3 (6th Cir. 2003) (noting taxpayer's failure to raise potential APA procedural claims in challenging validity of temporary Treasury regulations and thus declining to consider the issue). Other cases raising such claims likely exist, but the mere difficulty in locating them, given the volume of tax cases generally, is indicative of their relative infrequency.
10. See Hickman, supra note 4, at 1796-97 (describing early attitudes toward APA compliance among Treasury and IRS officials).
11. See id. at 1797-99 (documenting changes in IRS organizational structure, priorities, and practices).
12. See, e.g., Paul L. Caron, Tax Myopia, or Mamas Don't Let Your Babies Grow Up to Be Tax Lawyers, 13 VA. TAX REV. 517, 518 (1994) ("[T]ax law too often is mistakenly viewed by lawyers, judges, and law professors as a self-contained body of law . . . . [T]his misperception has impaired the development of tax law by shielding it from other areas of law that should inform the tax debate.");
13. Leandra Lederman, "Civil"izing Tax Procedure: Applying General Federal Learning to Statutory Notices of Deficiency, 30 U.C. DAVIS L. REV. 183, 183 (1996) ("Tax law tends to be uninformed by other areas of law. This insularity has the unfortunate consequence of depriving tax and other fields of cross-fertilization.");
14. Bryan T. Camp, Tax Administration as Inquisitorial Process and the Partial Paradigm Shift in the IRS Restructuring and Reform Act of 1998, 56 FLA. L. REV. 1, 2-3 (2004) (echoing calls for cross-fertilization between tax and nontax legal analysis).
15. See INTERNAL REVENUE MANUAL § 32.1.5.4.75.1(5) (2004) ("Interpretative rules are not subject to the provisions of 5 U.S.C. [§] 553(b), (c), and (d). Although most IRS/Treasury regulations are interpretative, and therefore not subject to these provisions of the APA, the IRS usually solicits public comment on all NPRMs."); see also id. § 32.1.2.3(3) ("Interpretative regulations are generally not subject to the APA provisions on rulemaking, including its notice and comment requirements.").
16. See infra note 46 and accompanying text (explaining utilization of "enforcement-based" terminology).
17. See, e.g., Treas. Reg. § 601.601(a)(2) (2007) ("Where required by 5 U.S.C. [§] 553 and in such other instances as may be desirable, the Commissioner publishes in the Federal Register general notice of proposed rules."); INTERNAL REVENUE MANUAL § 32.1.2.3(1)-(3) (2004) ("Several Federal administrative laws and procedures apply to the regulatory process . . . . The Administrative Procedure Act (APA) requires agencies to publish Notices of Proposed Rulemaking (NPRMs) in the Federal Register and permit the public to submit comments."); Wing v. Comm'r, 81 T.C. 17, 26-27 (1983) ("[T]he [IRS] Commissioner must conform generally to the requirements of the APA in promulgating regulations . . . .").
18. See supra note 11.
19. See 5 U.S.C. § 553 (2000); see also Hickman, supra note 4, at 1759-95 (explaining why Treasury regulations generally are not interpretative rules or procedural rules and do not qualify for the good cause exception).
20. Treasury explicitly claimed that APA notice-and-comment rulemaking requirements did not apply in 213, or 91.8%, of the 232 regulatory projects studied, but asserted the interpretative rule, procedural rule, or good cause exceptions by name roughly 10% of the time, i.e., only 23 times in 232 projects. See Hickman, supra note 4, at 1749-51. Treasury usually offers only a brief, conclusory statement in support of such claims, e.g., "[i]t has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to this regulation," or something to that effect. See INTERNAL REVENUE MANUAL § 32.1.5.4.7.5.4.3 (2004) (telling drafters of regulations deemed interpretative to include the quoted language in the Special Analysis section of the preamble);
21. see also, e.g., Corporate Reorganizations; Guidance on the Measurement of Continuity of Interest, T.D. 9225, 70 Fed. Reg. 54,631, 54,634 (Sept. 16, 2005) (using virtually identical language);
22. Guidance Regarding the Simplified Service Cost Method and the Simplified Production Method, T.D. 9217, 70 Fed. Reg. 44,467, 44,468 (Aug. 3, 2005) (same);
23. Section 179 Elections, T.D. 9209, 70 Fed. Reg. 40,189, 40,190 (July 13, 2005) (same). Even Treasury's more extensive explanations in asserting the good cause exception usually consist of only two or three generic sentences about the need for immediate guidance. See Hickman, supra note 4, at 1781 & n.247 (offering examples);
24. see also INTERNAL REVENUE MANUAL § 32.1.5.4.7.5.1(4) (2004) (providing boilerplate language for good cause claims).
25. See supra note 11.
26. See Hickman, supra note 4, at 1760-73 (criticizing application of interpretative rule exception to Treasury regulations).
27. See I.R.C. § 6662 (2000).
28. See, e.g., Swallows Holding, Ltd. v. Comm'r, 515 F.3d 162, 168-69 (3d Cir. 2008) (holding that reasonable final Treasury regulations promulgated under I.R.C. § 7805 carry the force of law); Estate of Gerson v. Comm'r, 507 F.3d 435, 438 (6th Cir. 2007) (noting that both temporary and final general authority Treasury regulations are legally binding); Bankers Life & Cas. Co. v. United States, 142 F.3d 973, 979 (7th Cir. 1998) (recognizing that all Treasury regulations have the force of law); E. Norman Peterson Marital Trust v. Comm'r, 78 F.3d 795, 798 (2d Cir. 1996) ("[T]emporary regulations are entitled to the same weight we accord to final regulations."); Sheldon I. Banoff, Dealing with the "Authorities": Determining Valid Legal Authority in Advising Clients, Rendering Opinions, Preparing Tax Returns and Avoiding Penalties, 66 TAX NOTES 1072, 1086, 1092 (1988) (noting legal effect of final and temporary Treasury regulations). But see Estate of Gerson v. Comm'r, 127 T.C. 139, 176 (2006) (Vasquez, J., dissenting) (opining that Treasury regulations issued under I.R.C. § 7805 do not carry the force of law).
29. See, e.g., Ellen P. Aprill, The Interpretive Voice, 38 LOY. L.A. L. REV. 2081, 2097 (2005) (recognizing specific authority Treasury regulations as legislative in character);
30. Irving Salem et al., ABA Section of Taxation Report of the Task Force on Judicial Deference, 57 TAX LAW. 717, 728 (2004) (same);
31. Juan F. Vasquez, Jr. & Peter A. Lowy, Challenging Temporary Treasury Regulations: An Analysis of the Administrative Procedure Act, Legislative Reenactment Doctrine, Deference, and Invalidity, 3 HOUS. BUS. & TAX L.J. 248, 250 (2003) (same).
32. According to my study of 232 projects, Treasury claimed that APA § 553 notice-and-comment rulemaking requirements did not apply and provided no basis for its claim in 190 projects overall; of those 190 projects, 74 cited a specific grant as authority for the regulations promulgated. See Hickman, supra note 4, at 1749-57 (providing further detail regarding study results).
33. See id. at 1778-91 (criticizing Treasury's utilization of the good cause exception).
34. Treasury issued final regulations without notice and comment in 11, or 4.7%, of the 232 regulatory projects studied. See id. at 1749. While many such regulations reflect minor housekeeping efforts, Treasury occasionally skips notice and comment entirely in making arguably more significant changes. See id. at 1787-89 (noting how, where Treasury skipped notice and comment in promulgating final regulations, Treasury's reliance on exceptions was generally misplaced and inappropriate).
35. Of the 232 Treasury regulation projects studied, 95, or 40.9%, did not follow the traditional APA notice-and-comment process. See id. at 1748. Of those 95 projects, 84, or 36.2%, involved legally binding temporary regulations. See id.
36. See 5 U.S.C. § 553(b)-(c) (2000).
37. See, e.g., Guidance Under Section 1502; Application of Section 108 to Members of a Consolidated Group, T.D. 9192, 70 Fed. Reg. 14,395, 14,395-96 (Mar. 22, 2005) (finalizing regulations and removing temporary regulations issued in T.D. 9089, T.D. 9098, and T.D. 9117);
38. Information Reporting and Backup Withholding for Payment Card Transactions, T.D. 9136, 69 Fed. Reg. 41,938 (Jul. 13, 2004) (finalizing and removing temporary regulations issued in T.D. 9041);
39. Excise Tax Relating to Structured Settlement Factoring Transactions, T.D. 9134, 69 Fed. Reg. 41,192 (Jul. 8, 2004) (finalizing and removing temporary regulations issued in T.D. 9042).
40. See Hickman, supra note 4, at 1759-86.
41. See, e.g., Allocation and Apportionment of Deductions for Charitable Contributions, T.D. 9211, 70 Fed. Reg. 40,661, 40,662 (July 14, 2005) (finalizing temporary regulations without change after rejecting sole comment as "not appropriate");
42. Transfers of Compensatory Options, T.D. 9148, 69 Fed. Reg. 48,392, 48,392 (Aug. 10, 2004) (finalizing temporary regulations without change after no comments to temporary and proposed regulations were received). In the late 1980s, Congress noted Treasury's habit of issuing but not finalizing temporary regulations and adopted I.R.C. § 7805(e) invalidating temporary Treasury regulations that are not finalized within three years. See I.R.C. § 7805(e) (2000);
43. Michael Asimow, Public Participation in the Adoption of Temporary Tax Regulations, 44 TAX LAW. 343, 363-64 (1991) (discussing history of I.R.C. § 7805(e)); Vasquez & Lowy, supra note 21, at 249-54 (explaining I.R.C. § 7805(e) background); see also Hickman, supra note 4, at 1738-40 (discussing relationship between I.R.C. § 7805(e) and the APA). Congress left in place then-existing temporary regulations, some of which still remain in the Code of Federal Regulations in temporary form. See, e.g., Treas. Reg. §§ 1.103(n)-1T, 1.103(n)-2T, 1.103(n)-3T, 1.103(n)-4T, 1.103(n)-5T, 1.103(n)-6T, 1.103(n)-7T (limiting ability of taxpayers to exclude certain state and local bond interest from taxable income since 1984); Treas. Reg. §§ 1.892-1T, 1.892-2T, 1.892-3T, 1.892-4T, 1.892-5T, 1.892-6T, 1.892-7T (elaborating I.R.C. provision exempting certain foreign government and international organization income from U.S. taxation since 1988); see also Vasquez & Lowy, supra note 21, at 254 ("[T]his 3-year expiration date applies only to temporary regulations issued after November 20, 1988.").
44. See, e.g., Guidance Under Section 355(e);
45. Recognition of Gain on Certain Distributions of Stock or Securities in Connection with an Acquisition, T.D. 9198, 70 Fed. Reg. 20,279, 20,279 (Apr. 19, 2005) (finalizing temporary regulations with modifications in response to comments received);
46. Certain Transfers of Property to Regulated Investment Companies [RICs] and Real Estate Investment Trusts [REITs], T.D. 9047, 68 Fed. Reg. 12,817, 12,817 (Mar. 18, 2003) (same).
47. See, e.g., Guidance Under Section 1502;
48. Application of Section 108 to Members of a Consolidated Group, T.D. 9192, 70 Fed. Reg. 14,395, 14,395-96 (Mar. 22, 2005) (finalizing and summarizing history of first, second, and third temporary regulations issued in response to comments); see also Hickman, supra note 4, at 1801-02 (summarizing history of T.D. 9192 and related temporary regulations as response to United Dominion Indus., Inc. v. United States, 532 U.S. 822 (2001)).
49. See Jeremiah Coder, Study Finds Treasury Isn't Complying with Procedure Act, 116 TAX NOTES 636, 637 (Aug. 20, 2007) (quoting a Treasury spokesman stating, "We disagree with Ms. Hichman's [sic] assessment that we are not following APA guidelines."). For further discussion of my methodology and findings, see Hickman, supra note 4, at 1740-59.
50. Asimow, supra note 29, at 369-70.
51. See Vasquez & Lowy, supra note 21, at 253-54.
52. See John F. Coverdale, Chevron's Reduced Domain: Judicial Review of Treasury Regulations and Revenue Rulings After Mead, 55 ADMIN. L. REV. 39, 69-70 (2003) ("It is not entirely clear, however, what justification the Treasury believes it has for not using notice and comment for temporary regulations that are legislative in the APA sense.").
53. See Juan J. Lavilla, The Good Cause Exemption to Notice and Comment Rulemaking Requirements Under the Administrative Procedure Act, 3 ADMIN. L.J. 317, 341 (1989).
54. See Hickman, supra note 4, at 1747-48 (discussing limitations of empirical study); see also, e.g., 1 RICHARD J. PIERCE, JR., ADMINISTRATIVE LAW TREATISE §§ 7.3-7.4 (4th ed. 2002) (elaborating jurisprudence addressing APA notice-and-comment requirements and range of related challenges).
55. JAMES T. O'REILLY, ADMINISTRATIVE RULEMAKING § 13:1 (2d ed. 2007) ("Pre-enforcement injunction actions sometimes are begun the very day that an agency rule is promulgated, with a request that the implementation of the rule be enjoined and that the court stay the effective date of the rule pending outcome of the litigation.");
56. RICHARD J. PIERCE, JR. ET AL., ADMINISTRATIVE LAW AND PROCESS § 5.7.4. (4th ed. 2004) ("In many circumstances, however, a party displeased with a regulation would prefer to wait and to challenge all aspects of that regulation in a proceeding in which that regulation is applied.").
57. 5 U.S.C. § 704 (2000). The Supreme Court has articulated a two-part test for finality that emphasizes the definitiveness and legal force of the ruling in question. See Bennett v. Spear, 520 U.S. 154, 177-78 (1997) (describing an agency action as final if it "mark[s] the 'consummation' of the agency's decisionmaking process" and is an action from which "legal consequences will flow"); see also, e.g., Ctr. for Native Ecosystems v. Cables, 509 F.3d 1310, 1328-31 (10th Cir. 2007) (applying Bennett test to evaluate finality under APA § 704); Rattlesnake Coal. v. EPA, 509 F.3d 1095, 1103-04 (9th Cir. 2007) (same). Final Treasury regulations obviously satisfy these requirements. Whether temporary Treasury regulations satisfy the Court's finality standard is a closer call, as Treasury's general habit of simultaneously issuing an NPRM requesting postpromulgation comments signals its intent for further consideration of the regulation's provisions. Nevertheless, whether or not they explicitly applied the test articulated in Bennett, courts have repeatedly considered "interim final" regulations carrying legally binding force to be final agency action for judicial review purposes. See, e.g., Pub. Citizen v. Dep't of Transp., 316 F.3d 1002, 1019 (9th Cir. 2003) (recognizing "interim final" regulation as sufficiently final to support judicial review), rev'd on other grounds, 541 U.S. 752 (2004); Career Coll. Ass'n v. Riley, 74 F.3d 1265, 1268 (D.C. Cir. 1996) ("'Interim' refers only to the Rule's intended duration - not its tentative nature."); Thrift Depositors of Am., Inc. v. Office of Thrift Supervision, 862 F. Supp. 586, 590 (D.D.C. 1994) (finding procedural challenge to interim final rule adopted without notice and comment to be justiciable) (citing Tenn. Gas Pipeline Co. v. FERC, 969 F.2d 1141 (D.C. Cir. 1992)).
58. 5 U.S.C. § 702 (2000); see also, e.g., Trudeau v. FTC, 456 F.3d 178, 185-87 (D.C. Cir. 2006) (discussing scope of APA § 702 sovereign immunity waiver); High Country Citizens Alliance v. Clarke, 454 F.3d 1177, 1181 (10th Cir. 2006) (limiting scope of waiver where another statute "precludes judicial review").
59. See, e.g., Abbott Labs. v. Gardner, 387 U.S. 136, 154 (1967) (observing that plaintiffs have standing prior to enforcement where they are the subject of regulation and risk penalties if they fail to comply); Columbia Broad. Sys., Inc. v. United States, 316 U.S. 407, 417-19 (1942) (recognizing pre-enforcement standing of plaintiffs whose contractual rights and business relations were adversely impacted by regulations).
60. Abbot Labs. v. Gardner, 387 U.S. 136 (1967).
61. See id. at 153; see also PIERCE ET AL., supra note 38 § 5.7.3, at 203 (describing pre-enforcement judicial review of agency regulations as routine). But see A. Raymond Randolph, Administrative Law and the Legacy of Henry J. Friendly, 74 N.Y.U. L. REV. 1, 10-11 (1999) (suggesting that the D.C. Circuit may be narrowing its approach toward pre-enforcement review of agency regulations).
62. See Abbott Labs., 387 U.S. at 140.
63. See, e.g., O'REILLY, supra note 38, § 132 ("The typical remedial action is revision of the rule on remand. When a declaratory judgment invalidating a rule is issued, the matter is sent back to the agency for reconsideration, often with instructions for specific activity or a schedule for compliance."). Courts sometimes employ the lesser remedy of remanding a flawed regulation to the agency without vacating it. See, e.g., Checkosky v. SEC, 23 F.3d 452, 466 (D.C. Cir. 1994) (listing D.C. Circuit cases remanding without vacating agency actions); see generally Ronald M. Levin, "Vacation" at Sea: Judicial Remands and the APA, 21 ADMIN. & REG. L. NEWS 4 (1996) (summarizing issues surrounding the practice of remanding without vacating);
64. Daniel B. Rodriguez, Of Gift Horses and Great Expectations: Remands Without Vacatur in Administrative Law, 36 ARIZ. ST. L.J. 599, 624-35 (2004) (criticizing the practice).
65. See GERALD A. KAFKA & RITA A. CAVANAGH, LITIGATION OF FEDERAL CIVIL TAX CONTROVERSIES § 1.01 (2d ed. 1995) (dividing tax litigation generally into the refund and deficiency categories). In using the term "enforcement-based" here, my principal intention is to distinguish refund or deficiency actions stemming from a dispute over the liability of a single taxpayer from "pre-enforcement" actions that would challenge Treasury regulations immediately postpromulgation. Of course, refund actions do not precisely entail IRS "enforcement" in the same way that deficiency actions do. Yet both refund actions and deficiency actions typically revolve around the IRS conclusions about the application of the laws to the circumstances of a particular taxpayer, rather than merely disputing more generally the substantive or procedural validity of a regulation. See generally PIERCE ET AL., supra note 38, § 5.7.4 (discussing tactical considerations in pursuing pre-enforcement and enforcement-based judicial review).
66. See, e.g., Morton v. Mancari, 417 U.S. 535, 550-51 (1974) ("Where there is no clear intention otherwise, a specific statute will not be controlled or nullified by a general one, regardless of the priority of enactment.").
67. I.R.C. § 7421 (2000).
68. See, e.g., Comm'r v. Shapiro, 424 U.S. 614, 616 (1976) (using Anti-Injunction Act label); Laing v. United States, 423 U.S. 161, 166 (1976) (same); We the People Found., Inc. v. United States, 485 F.3d 140, 142 (D.C. Cir. 2007) (same). Courts also occasionally refer to I.R.C. § 7421 as the Tax Anti-Injunction Act. See, e.g., South Carolina v. Regan, 465 U.S. 367, 385 (1984) (O'Connor, J., concurring); Nat'l Trust for Historic Pres. v. FDIC, 21 F.3d 469, 472 (D.C. Cir. 1994) (per curiam); Estate of Johnson v. United States, 836 F.2d 940, 948 (5th Cir. 1988). I.R.C. § 7421 is not the only statute commonly bearing the Anti-Injunction Act label. See, e.g., Hibbs v. Winn, 542 U.S. 88, 102 (2004) (using the Anti-Injunction Act term for 28 U.S.C. § 1341); Raygor v. Regents of the Univ. of Minn., 534 U.S. 533, 549 n.1 (2002) (applying the Anti-Injunction Act label to 28 U.S.C. § 2283). To avoid confusion in this Article, therefore, I will simply refer to this provision as I.R.C. § 7421 except when directly quoting another source.
69. 28 U.S.C. § 2201 (2000).
70. I.R.C. § 7421(a).
71. For example, I.R.C. § 7421(a) allows judicial review if the IRS tries to collect taxes claimed without first mailing a notice of deficiency to the taxpayer. See id. (establishing I.R.C. § 6212(a) as exception); id. § 6212(a) (authorizing notices of deficiency by certified or registered mail); id. § 6213(a) (precluding assessment without notice of deficiency); Martinez v. IRS, 78 A.F.T.R.2d (RIA) ¶ 96-6129, 96-6130 (E.D. La. 1996) (enjoining IRS from levying wages or assessing taxes where notices of deficiency were not sent).
72. For example, I.R.C. § 7421(a) allows taxpayers to seek Tax Court review of IRS determinations of whether or not a person is an employee for employment tax purposes. See I.R.C. § 7421(a) (creating exception for circumstances falling within the scope of I.R.C. § 7436); id. § 7436 (governing proceedings for employment status determinations). Still other provisions offer additional exceptions, such as for determinations regarding the qualification of retirement plans for specified tax treatment, see id. § 7476(a) (permitting Tax Court review of IRS determinations regarding qualification of retirement plans under subchapter D of I.R.C. chapter 1); id. §§ 401-36 (subchapter D of I.R.C. chapter 1, governing deferred compensation arrangements including retirement plans), or whether interest on municipal bonds will be tax-exempt, see id. § 7478(a) (permitting Tax Court review of IRS declarations regarding applicability of I.R.C. § 103 to certain State and local government obligations); id. § 103(a) (excluding State and local bond interest from gross income generally).
73. 28 U.S.C. § 2201(a) (2000). The DJA stands in contrast to 28 U.S.C. § 1346, which gives both federal district courts and the United States Court of Federal Claims jurisdiction over: Any civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to have been collected without authority or any sum alleged to have been excessive or in any manner wrongfully collected under the internal-revenue laws. Id. § 1346(a)(1).
74. See id. § 2201(a) (allowing declaratory judgments regarding certain tax liabilities in bankruptcy cases under 11 U.S.C. §§ 505 and 1146); 11 U.S.C. §§ 505, 1146 (2000).
75. See 28 U.S.C. § 2201(a) (permitting declaratory judgments in cases concerning determinations under I.R.C. § 7428(a)); I.R.C. § 7428(a). Congress adopted both I.R.C. § 7428 and the corresponding language in the DJA subsequent to the Supreme Court's decisions in Bob Jones University v. Simon, 416 U.S. 725 (1974), and Alexander v. "Americans Untied" Inc., 416 U.S. 752 (1974). See infra note 69 and accompanying text; Pub. L. No. 94-455, § 1306(a), (b)(8), 90 Stat. 1520 (1976).
76. See, e.g., Ambort v. United States, 392 F.3d 1138, 1140 (10th Cir. 2004) ("In practical effect, these two statutes are coextensive . . . ."); Sigmon Coal Co. v. Apfel, 226 F.3d 291, 300-01 (4th Cir. 2000) ("[T]he two statutory texts are, in underlying intent and practical effect, coextensive." (quoting In re Leckie Smokeless Coal Co., 99 F.3d 573, 583 (4th Cir. 1996))); Nat'l Taxpayers Union v. United States, 68 F.3d 1428, 1435 (D.C. Cir. 1995) ("Because the AIA and DJA operate coterminously, the following analysis of the impact of the AIA upon NTU's (complaint also determines the effect of the DJA."); see also 1 LAURENCE F. CASEY, FEDERAL TAX PRACTICE § 2:47 (2d ed. Supp. 2007) (observing that the language of the DJA seems "more comprehensive" than I.R.C. § 7421, but that "[t]here is considerable authority . . . that the two statutes are 'coterminous' or in pari materia"). The Supreme Court thus far has declined to equate I.R.C. § 7421 and the DJA but has recognized the lower courts' treatment and opined that "the federal tax exception to the Declaratory Judgment Act is at least as broad as the prohibition of the [Tax] Anti-Injunction Act." "Americans Untied" Inc., 416 U.S. at 759 n.10; see also Bob Jones Univ., 416 U.S. at 732 n.7 (1974) (same). The IRS meanwhile takes the position that the DJA is broader than I.R.C. § 7421.
77. See IRS, Litigation Guideline Memorandum GL-52, 1991 WL 1167968, at *4 (June 28, 1991).
78. See Note, Enjoining the Assessment and Collection of Federal Taxes Despite Statutory Prohibition, 49 HARV. L. REV. 109, 109 & n.9 (1935) (documenting limits of I.R.C. § 7421's history); Bob Jones Univ., 416 U.S. at 736 (same).
79. But see ROGER FOSTER & EVERETT V. ABBOT, A TREATISE ON THE FEDERAL INCOME TAX UNDER THE ACT OF 1894 § 72 (1895) (suggesting that Congress adopted similar language in 1867 after several taxpayers requested injunctions against the assessment or collection of the Civil War income tax).
80. Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 7 (1962); see also Hibbs v. Winn, 542 U.S. 88, 103 (2004) (summarizing judicial acceptance of same purposes); South Carolina v. Regan, 465 U.S. 367, 386 (1984) (O'Connor, J., concurring) (acknowledging and elaborating same purposes); "Americans United" Inc., 416 U.S. at 769 (Blackmun, J., dissenting) (same).
81. See Bryan T. Camp, The Equal Protection Problem in Innocent Spouse Procedures, 112 TAX NOTES 281, n.7 (July 17, 2006) (reviewing history of I.R.C. § 7421 and characterizing that provision and the Supreme Court's interpretation thereof as adopting a "pay-first, litigate-later structure").
82. See, e.g., Shrock v. United States, 92 F.3d 1187, 1996 WL 414177, at *1 (7th Cir. 1996) (unpublished table decision) (calling tax protestor's claims "frivolous" and "repeatedly rejected"); Gassei v. DOJ, 968 F.2d 19, 1992 WL 149981, at *2 (10th Cir. 1992) (unpublished table decision) (rejecting taxpayer's argument as clearly contrary to controlling circuit precedent); Purk v. United States, 895 F.2d 1414, 1990 WL 12188, at *1 (6th Cir. 1990) (unpublished table decision) (observing that "other courts have rejected similar claims" to that raised by taxpayer).
83. See, e.g., Weiler v. United States, 82 F.3d 424, 1996 WL 169254, at *4 (9th Cir. 1996) (unpublished table decision) (finding record "replete with evidence" that the Government's assessments were valid, and that taxpayers demonstrated no particularized hardship); Nuttle v. IRS, 69 F.3d 548, 1995 WL 643106, at *2 (10th Cir. 1995) (unpublished table decision) (declining to enjoin collection of taxes recognized as due by the Tax Court so that taxpayer could avoid posting an appeal bond); Knight v. United States, 992 F.2d 1219, 1993 WL 140589, at *2 (9th Cir. 1993) (unpublished table decision) (refusing to find irreparable harm and enjoin collection for lack of deficiency notice where I.R.C. did not require notice).
84. See, e.g., "Americans United" Inc., 416 U.S. at 759 ("[D]ecisions of this Court make it unmistakably clear that the constitutional nature of a taxpayer's claim . . . is of no consequence under the Anti-Injunction Act."); Church of Scientology of Cal. v. United States, 920 F.2d 1481, 1488-89 (9th Cir. 1990) ("No special consideration is granted to injunctions against tax collection sought on constitutional grounds."); Lowrie v. United States, 824 F.2d 827, 830 (10th Cir. 1987) ("Nor can one avoid [I.R.C. § 7421] by raising constitutional claims."). Cf. United States v. Clintwood Elkhorn Mining Co., 128 S. Ct. 1511, 1520 (2008) (reiterating lack of constitutional exception to I.R.C. § 7421 in declining to recognize such exception from administrative exhaustion requirement of I.R.C. § 7422).
85. See 1 CASEY, supra note 57, § 2:36 (observing that I.R.C. § 7421 limits judicial review in virtually all cases regarding a taxpayer's own tax liability).
86. I.R.C. § 7421(a) (2000).
87. 28 U.S.C. § 2201(a) (2000).
88. Bob Jones Univ. v. Simon, 416 U.S. 725, 725 (1974).
89. Id. at 739.
90. Id. at 739 & n.10, 749-50; see also Alexander v. "Americans United" Inc., 416 U.S. 752, 760-61 (1974) (employing similar reasoning to reach comparable conclusion regarding organization's exempt status: "Under any reasonable construction of the statutory term 'purpose,' the objective of this suit was to restrain the assessment and collection of taxes from respondent's contributors."). Congress has since amended the I.R.C. and the DJA to permit declaratory relief with respect to the exempt status of taxpayers such as Bob Jones University and "Americans United" Inc. See I.R.C. § 7428(a); 28 U.S.C. § 2201(a); see also supra note 56 (discussing enactment of these provisions). This statutory relief is limited to exempt status determinations, however, and does not otherwise alter the breadth of the Court's interpretation of I.R.C. § 7421. See I.R.C. § 7428(a).
91. Foodservice & Lodging Inst. v. Regan, 809 F.2d 842, 844 (D.C. Cir. 1987) (emphasis added). The Ninth Circuit reached the same conclusion regarding a similar challenge involving information returns allegedly required under ERISA. See California v. Regan, 641 F.2d 721, 722 (9th Cir. 1981).
92. Debt Buyers' Ass'n v. Snow, 481 F. Supp. 2d 1 (D.D.C. 2006).
93. Id. at 9.
94. Most of these cases address third-party challenges to IRS determinations that various not-for-profit entities were entitled to tax-exempt status. See, e.g., E. Ky. Welfare Rights Org. v. Simon, 506 F.2d 1278, 1284-85 (D.C. Cir. 1974), rev'd on other grounds, 426 U.S. 26 (1976); Abortion Rights Mobilization, Inc. v. Regan, 544 F. Supp. 471, 489-90 (S.D.N.Y. 1982), rev'd on other grounds sub nom. U.S. Catholic Conference v. Abortion Rights Mobilization, Inc., 487 U.S. 72 (1988); Lugo v. Simon, 453 F. Supp. 677, 690 (N.D. Ohio 1978), rev'd in part on other grounds sub nom. Lugo v. Miller, 640 F.2d 823 (6th Cir. 1981); McGlotten v. Connally, 338 F. Supp. 448, 453-54 (D.D.C. 1972). Some such cases, however, involve other tax benefits. See, e.g., Tax Analysts & Advocates v. Shultz, 376 F. Supp. 889, 891-94 (D.D.C. 1974) (challenging IRS application of I.R.C. § 2503(b) gift tax exclusion to congressional campaign contributions in Rev. Rul. 72-355).
95. Hibbs v. Winn, 542 U.S. 88, 103-04 (2003). The dissenters in Hibbs questioned the Court's interpretation of both I.R.C. § 7421's text and those earlier cases, noting that the language and holdings in those cases were
96. See, e.g., Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 44-46 (1975) (declining jurisdiction over such a challenge on standing grounds); Fulani v. Brady, 935 F.2d 1324, 1328-31 (D.C. Cir. 1991) (same); Am. Soc'y of Travel Agents, Inc. v. Blumenthal, 566 F.2d 145, 148 (D.C. Cir. 1977) (same).
97. Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 7 (1962).
98. See, e.g., Alexander v. "Americans United" Inc., 416 U.S. 752, 758 (1974) ("Unless both conditions are met, a suit for preventive injunctive relief must be dismissed."). Courts occasionally speak of the two prongs of the Williams Packing exception disjunctively as separate exceptions. See, e.g., Martens v. United States, No. 05-1805, 2007 WL 2007580, at *5 (D.D.C. July 6, 2007). I have yet to locate a case that actually applied one prong without the other to find jurisdiction, suggesting that such references may in fact reflect imprecise rhetoric rather than doctrinal interpretation.
99. Inv. Annuity, Inc. v. Blumenthal, 609 F.2d 1, 5-6 (D.C. Cir. 1979) (citation omitted). See, e.g., Comm'r v. Shapiro, 424 U.S. 614, 627-29, 633 (1976) (finding irreparable injury and requiring the Government on remand "to litigate the question whether its assessment has a basis in fact").
100. Williams Packing, 370 U.S. at 7; see also Bob Jones Univ. v. Simon, 416 U.S. 725, 737 (1974) (same).
101. Shapiro, 424 U.S. at 629.
102. See Williams Packing, 370 U.S. at 7-8. The Supreme Court subsequently held that the government must provide sufficient basis for its assessment to give the taxpayer the opportunity to satisfy this burden. See Shapiro, 424 U.S. at 627-29.
103. See Williams Packing, 370 U.S. at 3-4.
104. See id. at 6-8.
105. See, e.g., United States v. Am. Friends Serv. Comm., 419 U.S. 7, 10 (1974) (per curiam) (agreeing with taxpayers' concession that government's position would likely prevail); Bob Jones Univ., 416 U.S. at 748-49 (declaring merits of taxpayer's claims "sufficiently debatable").
106. See, e.g., Am. Friends Serv. Comm., 419 U.S. at 11; Alexander v. "Americans United" Inc., 416 U.S. 752, 762 (1974).
107. See, e.g., Am. Friends Serv. Comm., 419 U.S. at 11; "Americans United" Inc., 416 U.S. at 762; Bob Jones Univ., 416 U.S. at 747-48.
108. The closest the Court has come to employing the Williams Packing exception in the taxpayer's favor was in Commissioner v. Shapiro, 424 U.S. 614 (1976). In that case, the Court found that the IRS's retention without judicial review of funds the taxpayer otherwise needed to make bail represented an irreparable injury. See id. at 633. The Court was unable to reach a conclusion from the record before it regarding the Government's potential for prevailing on the merits, however, because the IRS had declined to state the basis of its assessment. See id. at 632. While acknowledging that subsequent developments in the case since the time of filing could render the Williams Packing exception inapplicable, the Court nevertheless remanded the case in effect so that the district court could assemble a record for the purpose of evaluating the applicability of I.R.C. § 7421 and the Williams Packing exception. See id. at 633-34 & n.15. Separately, in South Carolina v. Regan, the Court denied the applicability of the Williams Packing exception but found jurisdiction under a different theory. See South Carolina v. Regan, 465 U.S. 367, 378-80 (1984); see also infra notes 90-94 and accompanying text. Otherwise, the Court has merely declined to find jurisdiction under the Williams Packing exception. See, e.g., Am. Friends Serv. Comm., 419 U.S. at 10 (recognizing taxpayers' concession that the Williams Packing exception did not apply, but discussing its inapplicability due to availability of alternative legal remedy in any event); "Americans United" Inc., 416 U.S. at 763 (holding Williams Packing exception inapplicable); Bob Jones Univ., 416 U.S. at 749 (finding exception inapplicable).
109. My research here was not exhaustive. According to Westlaw, the Court's opinion in Williams Packing has been cited in more than 1,400 judicial opinions as of June 2008. A review of roughly 100 federal appellate cases decided in the past twenty years for which Westlaw assigned between two and four Keycite stars revealed only three in which the reviewing court applied the Williams Packing exception to find jurisdiction, all of which involved postenforcement claims of obvious and egregious IRS error or disregard of established law. See Estate of Michael v. Lullo, 173 F.3d 503, 505, 512-13 (4th Cir. 1999) (granting Williams Packing exception where IRS illegally denied credit to compensate for its own calculation error discovered after the limitations period for adjusting the assessment had expired); Lampert v. United States, 884 F.2d 1395, 1989 WL 104459, at *1-3 (9th Cir. 1989) (unpublished table decision) (applying Williams Packing exception where assessed penalty was both very large and obviously miscalculated); Ponchik v. Comm'r, 854 F.2d 1127, 1130-32 (8th Cir. 1988) (extending Williams Packing exception where IRS audit file clearly showed IRS error in case of federal prisoner trying to support minor child).
110. See, e.g., California v. Regan, 641 F.2d 721, 723 (9th Cir. 1981) (denying applicability of Williams Packing exception on such grounds).
111. South Carolina v. Regan, 465 U.S. 367, 367 (1984).
112. See id. at 370-71.
113. See id. at 370-72.
114. See id. at 373, 378-81.
115. See id. at 378, 380-81.
116. See SEC v. Credit Bancorp, Ltd., 297 F.3d 127, 139 (2nd Cir. 2002) (finding South Carolina v. Regan exception inapplicable because "the Receiver, like any other taxpayer, has the option of paying taxes immediately and seeking a refund thereafter. The 'pay first, litigate later' procedure is not unusual." (citing Bull v. United States, 295 U.S. 247, 260 (1935); Phillips v. Comm'r, 283 U.S. 589, 595-99 (1931))); Nat'l Taxpayers Union, Inc. v. United States, 68 F.3d 1428, 1436 (D.C. Cir. 1995) (denying applicability of South Carolina v. Regan exception to litigation of tax claims by taxpayer membership organizations because "the taxpayer members . . . have 'alternative remedies'"); In re Am. Bicycle Ass'n, 895 F.2d 1277, 1281 & n.4 (9th Cir. 1990) (rejecting the applicability of South Carolina v. Regan exception because taxpayers could pay taxes owed and sue for refund).
117. See, e.g., Foodservice & Lodging Inst., Inc. v. Regan, 809 F.2d 842, 844-45 (D.C. Cir. 1987) (per curiam) ("[E]mployers can refuse to comply, pay the statutory fine, and sue for a refund of the fine. Therefore, it is clear that alternative remedies are available."); California v. Regan, 641 F.2d 721, 723 (9th Cir. 1981) (concluding that California had a legal remedy because it could pay penalties for noncompliance with information reporting requirements and sue for a refund thereof); Debt Buyers' Ass'n v. Snow, 481 F. Supp. 2d 1, 10 (D.D.C. 2006) (denying applicability of South Carolina v. Regan exception for same reason).
118. See infra notes 140-143 and accompanying text (regarding deficiency actions).
119. Debt Buyers' Ass'n, 481 F. Supp. 2d at 10.
120. See, e.g., Am. Mining Cong. v. Mine Safety & Health Admin., 995 F.2d 1106, 1108 (D.C. Cir. 1993) ("The distinction between those agency pronouncements subject to APA notice-and-comment requirements and those that are exempt has been aptly described as 'enshrouded in considerable smog.'" (citation omitted)); Richard J. Pierce, Jr., Distinguishing Legislative Rules from Interpretative Rules, 52 ADMIN. L. REV. 547, 548 (2000) ("[T]he case law in this area is characterized by a great deal of unnecessary confusion and inconsistency.").
121. See, e.g., Lavilla, supra note 36, at 416 (recognizing an "absence of uniform case law" regarding the good cause exception); Ellen R. Jordan, The Administrative Procedure Act's "Good Cause" Exemption, 36 ADMIN. L. REV. 113, 120 (1984) (describing the "ad hoc quality" of good cause exception analysis as courts "examine each claim in context, weighing all the facts and circumstances to decide whether other legitimate interests outweigh the desirability of providing an opportunity for public participation in rulemaking").
122. See, e.g., 1 PIERCE, supra note 37, § 7.3 (observing with regard to adequacy of notice question that "[g] eneralization is difficult because the resolution of any particular dispute of this type is critically dependent on the specifics of the dispute").
123. See, e.g., Foodservice and Lodging Inst., Inc. v. Regan, 809 F.2d 842, 844 (D.C. Cir. 1987) (rejecting South Carolina v. Regan exception and omitting discussion of Williams Packing exception); California v. Regan, 641 F.2d 721, 723 (9th Cir. 1981) (rejecting Williams Packing exception because "the government did prevail in the district court" before evaluating whether California had an available legal remedy).
124. See, e.g., DOUGLAS LAYCOCK, THE DEATH OF THE IRREPARABLE INJURY RULE 220-22 (1991) (describing ripeness and mootness as at least implicitly remedial);
125. Richard H. Fallon, Jr., The Linkage Between Justiciability and Remedies - And Their Connections to Substantive Rights, 92 VA. L. REV. 633, 643 (2006) ("Implicit judgments about appropriate judicial remedies exert an important, almost pervasive influence on justiciability doctrines.");
126. Laura E. Little, It's About Time: Unravelling Standing and Equitable Ripeness, 41 BUFF. L. REV. 933, 947 (1993) (criticizing the Supreme Court for "collaps[ing] analysis of jurisdictional and remedial concerns into a single threshold enterprise").
127. The cases to which I refer here should not be confused with the substantial line of jurisprudence regarding what is known as "taxpayer standing" doctrine. Cases involving taxpayers attempting to use their taxpayer status to challenge various federal government policies are both plentiful and virtually always dismissed as nonjusticiable. See, e.g., Hein v. Freedom from Religion Found., Inc., 127 S. Ct. 2553, 2559, 2563 (2006); Valley Forge Christian Coll. v. Ams. United for Separation of Church & State, Inc., 454 U.S. 464, 482-83 (1982); United States v. Richardson, 418 U.S. 166, 174-75 (1974); see also Nancy C. Staudt, Taxpayers in Court: A Systematic Study of a (Misunderstood) Standing Doctrine, 52 EMORY L.J. 771, 804-13 (2003) (documenting empirically poor record of federal taxpayer standing challenges). Occasionally one of these cases objects particularly to IRS action, or at least casts its claim in those terms. See, e.g., Bartley v. United States, 123 F.3d 466, 470-71 (7th Cir. 1997) (challenging alleged IRS overcollection of taxes but on basis that government was improperly spending tax revenues). Usually, however, the objections raised more directly concern government programs not directly related to revenue collection policies. See, e.g., Hein, 127 S. Ct. at 2559-60 (challenging President's Faith-Based and Community Initiatives Program as Establishment Clause violation);
128. Valley Forge Christian Coll., 454 U.S. at 468-69 (objecting to sale of property by Department of Health, Education, and Welfare to religious college). Hence, notwithstanding the label, taxpayer standing cases generally have little to do with tax law or APA procedural requirements.
129. See U.S. CONST. art. III, § 2, cl. 1; Hein, 127 S. Ct. at 2562; Massachusetts v. EPA, 127 S. Ct. 1438, 1464 (2007). Generally speaking, pre-enforcement tax challenges may only be filed in the Article III courts because the Tax Court is empowered primarily to hear cases after the IRS has issued a deficiency notice to a taxpayer. See I.R.C. §§ 6213, 6214 (2000); see also KAFKA & CAVANAGH, supra note 46, § 2.01 (listing other, more limited areas of Tax Court jurisdiction). Nevertheless, there is some disagreement over whether the Article III case or controversy limitation applies to the Tax Court as an Article I court. Although the United States Tax Court is an Article I or legislative court of otherwise limited jurisdiction, standing doctrine applies equally to tax cases arising in that forum. See, e.g., Freytag v. Comm'r, 501 U.S. 868, 897 (1991) (Scalia, J., concurring) (recognizing that Article III jurisdictional questions should apply to non-Article III tribunals as well); Clapp v. Comm'r, 875 F.2d 1396, 1399 (9th Cir. 1989) ("[T]he few cases discussing the differences between the Tax Court and an Article III court indicate that questions of Tax Court jurisdiction are to be resolved in the same manner as for an Article III court."); Anthony v. Comm'r, 66 T.C. 367, 368-69 (1976) ("[W]hether as part of the conceptual formulation of a 'case' or 'controversy' or as a matter of prudent policy considerations, we think the 'standing' doctrine inheres in our exercise of judicial power."). But see Baranowicz v. Comm'r, 432 F.3d 972, 975 (9th Cir. 2005) ("Moreover, we must also bear in mind that the Tax Court is not an Article III court and, therefore, is not fully constrained by Article III's case or controversy limitation."); Leandra Lederman, Precedent Lost: Why Encourage Settlement, and Why Permit Non-Party Involvement in Settlements?, 75 NOTRE DAME L. REV. 221, 248 (1999) ("Article I courts are not constrained by the 'case or controversy' clause of Article III of the Constitution.").
130. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000); Bennett v. Spear, 520 U.S. 154, 167 (1997); Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).
131. Friends of the Earth, 528 U.S. at 180.
132. See, e.g., Massachusetts v. EPA, 127 S. Ct. 1438, 1453 (2007) ("When a litigant is vested with a procedural right, that litigant has standing if there is some possibility that the requested relief will prompt the injury-causing party to reconsider the decision that allegedly harmed the litigant."); Defenders of Wildlife, 504 U.S. at 572 n.7 ("The person who has been accorded a procedural right to protect his concrete interests can assert that right without meeting all the normal standards for redressability and immediacy."); Sugar Cane Growers Coop. of Fla. v. Veneman, 289 F.3d 89, 94-95 (D.C. Cir. 2002) ("A [litigant] who alleges a deprivation of a procedural protection to which he is entitled never has to prove that if he had received the procedure the substantive result would have been altered. All that is necessary is to show that the procedural step was connected to the substantive result.").
133. See Massachusetts v. EPA, 127 S. Ct. at 1453; Defenders of Wildlife, 504 U.S. at 573 n.8;
134. Sugar Cane Growers Coop. of Fla., 289 F.3d at 94-95.
135. Sugar Cane Growers Coop. of Fla., 289 F.3d at 95.
136. Dismas Charities, Inc. v. DOJ, 401 F.3d 666, 677 (6th Cir. 2005); see also Hodges v. Abraham, 300 F.3d 432, 443-44 (4th Cir. 2002) (finding that potential environmental damage to State land and water represented sufficiently concrete injury to allow Governor of South Carolina to sue Department of Energy on procedural grounds).
137. Dismas Charities, 401 F.3d at 677.
138. See, e.g., Ouachita Watch League v. Jacobs, 463 F.3d 1163, 1170-73 (11th Cir. 2006) (holding that group of environmental organizations had standing to challenge Forest Service plans for failure to comply with National Environmental Policy Act and National Forest Management Act); Kootenai Tribe of Idaho v. Veneman, 313 F.3d 1094, 1109-14 (9th Cir. 2002) (recognizing standing of state, counties, Indian tribe, recreational groups, and others to raise National Environmental Policy Act and APA challenges); Kelley v. Selin, 42 F.3d 1501, 1507-10 (6th Cir. 1995) (finding that landowners had standing to challenge Nuclear Regulatory Commission waste storage rulemaking).
139. See, e.g., Lujan v. Defenders of Wildlife, 504 U.S. 555, 572 n.10 (1992) (offering examples of what is or is not a sufficiently concrete injury); Wis. Pub. Power, Inc. v. FERC, 493 F.3d 239, 269 (D.C. Cir. 2007); Tex. Indep. Producers & Royalty Owner Ass'n v. EPA, 410 F.3d 964, 976-77 (7th Cir. 2005) (summarizing precedent illustrating concrete injuries).
140. Wis. Pub. Power, Inc. v. FERC, 493 F.3d 239 (D.C. Cir. 2007).
141. Id. at 269.
142. Nat'l Taxpayers Union, Inc. v. United States, 68 F.3d 1428, 1434 (D.C. Cir. 1995).
143. Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 28 (1975).
144. Id. at 33-34.
145. Id. at 34-35.
146. See id. at 37, 42-46. Notably, the court below decided that the plaintiffs' claim fell outside the scope of I.R.C. § 7421 and the DJA because "the litigation did not threaten to deny anticipated tax revenues to the Government." E. Ky. Welfare Rights Org. v. Simon, 506 F.2d 1278, 1284-85 (D.C. Cir. 1974). The court's reasoning was consistent with several cases from the 1970s holding that I.R.C. § 7421 and the DJA do not apply to third-party challenges to another organization's exempt status. See supra note 64 and accompanying text (discussing this line of cases).
147. Simon v. E. Ky. Welfare Rights Org., 426 U.S. at 46 (Stewart, J., concurring).
148. See, e.g., Fulani v. Brady, 935 F.2d 1324, 1326-28, 1331 (D.C. Cir. 1991); In re U.S. Catholic Conference, 885 F.2d 1020, 1028-31 (2d Cir. 1989).
149. Nat'l Taxpayers Union, Inc. v. United States, 68 F.3d 1428, 1435 (D.C. Cir. 1995). However, the court separately found that I.R.C. § 7421 and the DJA barred the case in question. See id. at 1435-38.
150. Stephenson v. Brady, 927 F.2d 596, 1991 WL 22835, at *2 (4th Cir. 1991) (per curiam) (unpublished table decision).
151. See Nat'l Park Hospitality Ass'n v. Dep't of the Interior, 538 U.S. 803, 808 (2003).
152. Id. at 807-08 (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 148-49 (1967)); accord Ohio Forestry Ass'n, Inc. v. Sierra Club, 523 U.S. 726, 732-33 (1998) (same).
153. Abbott Labs. v. Gardner, 387 U.S. 136, 149 (1967); accord Whitman v. Am. Trucking Ass'ns, 531 U.S. 457, 479 (2001) (quoting Abbott Labs.); Ohio Forestry Ass'n, 523 U.S. at 733 (same).
154. Babbitt v. United Farm Workers Nat'l Union, 442 U.S. 289, 298 (1979).
155. See Ohio Forestry Ass'n, 523 U.S. at 733 (defining traditional hardship as "adverse effects of a strictly legal kind").
156. Id. at 733; see also Am. Trucking Ass'ns, 531 U.S. at 479-80 (quoting Ohio Forestry Ass'n to evaluate ripeness).
157. See, e.g., Nat'l Park Hospitality Ass'n, 538 U.S. at 810-11 ("Petitioner's argument appears to be that mere uncertainty as to the validity of a legal rule constitutes a hardship for purposes of the ripeness analysis. . . . If we were to follow petitioner's logic, courts would soon be overwhelmed with requests for what essentially would be advisory opinions . . . ."); Reno v. Catholic Soc. Servs., 509 U.S. 43, 57-59 (1993) (requiring parties to pursue administrative application of regulation against them to deny government benefits before permitting judicial review of regulation); Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 891-94 (1990) (declining to find challenges to agency regulation ripe absent further agency action applying the regulation).
158. Abbott Labs. v. Gardner, 387 U.S. 136, 139-41 (1967) (recognizing general presumption in favor of pre-enforcement review of agency regulations in APA); see also Nat'l Wildlife Fed'n, 497 U.S. at 891 (labeling as ripe for review "a substantive rule which as a practical matter requires the plaintiff to adjust his conduct immediately"); Toilet Goods Ass'n v. Gardner, 387 U.S. 158, 164 (1967) (designating as ripe cases in which "the impact of the administrative action could be said to be felt immediately by those subject to it in conducting their day-to-day affairs").
159. See Catholic Soc. Servs., 509 U.S. at 58-59.
160. Compare Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 212, 216 (1994) (distinguishing Abbott Labs. and finding that statutory procedures for administrative and judicial review preclude consideration of pre-enforcement challenge), with Abbott Labs., 387 U.S. at 141-42 (concluding that existence of statutory procedures for administrative review did not preclude pre-enforcement challenges and simply provided "an additional remedy"). See also 1 PIERCE, supra note 37, § 15.14, at 1079-81 (noting the inconsistency between these cases).
161. See Abbott Labs., 387 U.S. at 152-53 (allowing judicial review where plaintiffs faced choice between complying with labeling requirements at significant financial cost and incurring criminal and civil penalties); Columbia Broad. Sys., Inc. v. United States, 316 U.S. 407, 417-19 (1942) (allowing judicial review where plaintiffs had to comply with costly rules or risk losing broadcasting license).
162. Stephenson v. Brady, 927 F.2d 596, 1991 WL 22835, at *3-4 (4th Cir. 1991) (per curiam) (unpublished table decision).
163. See id. at *4.
164. See id.
165. As already noted, most taxpayer-initiated tax litigation falls into the enforcement-based categories of refund litigation or deficiency litigation. See KAFKA & CAVANAGH, supra note 46, § 1.01 (dividing most tax litigation into the refund and deficiency categories); see also supra note 46, explaining use of "enforcement-based" terminology in reference to refund and deficiency litigation.
166. See, e.g., Quarty v. United States, 170 F.3d 961, 971-72 (9th Cir. 1999) (describing administrative requirements and declining to consider merits because claim "was not administratively exhausted").
167. See supra note 25 and accompanying text (recognizing Treasury's use of temporary regulations as its most obvious APA compliance problem).
168. See, e.g., Jerry L. Mashaw, Improving the Environment of Agency Rulemaking: An Essay on Management, Games, and Accountability, 57 LAW & CONTEMP. PROBS. 185, 225-28 (1994) (arguing with approval that regulated parties are more likely to comply with agency regulations if bringing a pre-enforcement challenge risks a penalty);
169. Richard J. Pierce, Jr., Seven Ways to Deossify Agency Rulemaking, 47 ADMIN. L. REV. 59, 90-91 (1995) (expressing concern that eliminating pre-enforcement judicial review would "induce regulatees to comply with a rule, even if they believe the rule to be invalid, rather than to take the risks attendant to noncompliance and a subsequent challenge to the validity of the rule in an enforcement case");
170. Marie Seidenfeld, Playing Games with the Tuning of Judicial Review: An Evaluation of Proposals to Restrict Pre-enforcement Review of Agency Rules, 58 OHIO ST. L.J. 85, 100-01 (1997) (agreeing with predictions that, in the absence of pre-enforcement review, many regulated parties will simply choose to comply, and expressing concerns about negative consequences of that outcome).
171. See I.R.C. § 7422(a) (2000) (precluding a suit to recover taxes paid until the taxpayer has filed a refund claim and exhausted administrative penalties); see also id. § 6532(a)(1) (allowing a suit under I.R.C. § 7422(a) either six months after filing a refund claim or when the IRS rejects to such a request, whichever comes first); Brennan v. Sw. Airlines Co., 134 F.3d 1405, 1412 (9th Cir. 1998) (recognizing administrative exhaustion requirement for refund claim).
172. See I.R.C. §§ 6211(a), 6212(a), 6213(a) (defining "deficiency," authorizing notices of deficiency, and authorizing taxpayers to file a petition with the Tax Court after receiving the notice).
173. See id. § 6213(a). In addition to challenging the noticed deficiency, a taxpayer may assert further in its Tax Court petition that it has overpaid its taxes for the year in question. See id. § 6512(b).
174. See, e.g., supra note 95 and accompanying text.
175. See, e.g., Treas. Reg. § 601.105(e)(1) (as amended in 1987) (describing form of refund claim); 3 CASEY, supra note 57, §§ 10.51, 10.54 (describing the required forms and contents for refund claims); Myron C. Baum, How to Handle a Tax Controversy at the IRS and in Court, C573 A.L.I.-A.B.A. 239, 241-48 (1990) (describing forms, contents, and timing requirements for refund claims).
176. See Treas. Reg. § 301.6402-2(b)(1) (as amended in 1982). Commonly known as the "doctrine of variance," the courts apply this rule as a jurisdictional requirement. See, e.g., IA 80 Group, Inc. & Subsidiaries v. United States, 347 F.3d 1067, 1074 (8th Cir. 2003); Apollo Fuel Oil v. United States, 195 F.3d 74, 77 (2d Cir. 1999).
177. The circumstances triggering automatic denial of a refund claim vary slightly depending on the context. See, e.g., INTERNAL REVENUE MANUAL § 4.23.13.4 (2003) (employment tax context); id. § 4.24.8.8 (excise tax context); see also KAFKA & CAVANAGH, supra note 46, § 14.01 (listing most common circumstances triggering automatic refund claim denial in all contexts);
178. Donald C. Alexander & Brian S. Gleicher, IRS Procedures: Examinations and Appeals, 623-2d Tax Mgmt. (BNA), at A-111-12 (2006) (same).
179. The initial IRS news release announcing this policy limited the availability of immediate refund claim disallowance to "contested income, estate or gift tax issues considered in previously examined returns." Internal Revenue News Release IR-1600, 9 Stand. Fed. Tax Rep. (CCH) ¶ 6609 (Apr. 26, 1976). The current Internal Revenue Manual also recognizes the availability of immediate disallowance in the employment tax context.
180. See INTERNAL REVENUE MANUAL § 4.23.13.4 (2003).
181. See also 15 MERTENS LAW OF FEDERAL INCOME TAXATION § 58.33 (recognizing expedited processing option); KAFKA & CAVANAGH, supra note 46, § 14.04 (same).
182. See Treas. Reg. § 601.105(e)(2) (as amended in 1987) (prescribing same procedure for general audits and examination of refund claims); KAFKA & CAVANAGH, supra note 46, § 14.01 (noting that refund claims not summarily rejected are subject to general audit standards); 3 CASEY, supra note 57, § 10.62 (same); Alexander & Gleicher, supra note 150, at A-111 (same).
183. See KAFKA & CAVANAGH, supra note 46, § 14.01; 3 CASEY, supra note 57, § 10.62.
184. See I.R.C. § 6405(a) (2000); Treas. Reg. §§ 301.6405-1 (as amended in 1978), 601.108 (as amended in 1980). The $2 million threshold for Joint Committee review was adjusted upward over time, from $1 million in 2000 and $100,000 in 1976. See Pub. L. No. 106-554, § 1(a)(7), 114 Stat. 2763, 2763 (2000); Pub. L. No. 101-508, § 11834(a), 104 Stat. 1388 (1990); Pub. L. No. 94-455, § 1210(a)-(b), 90 Stat. 1520, 1711 (1976); see also Alexander & Gleicher, supra note 150, at A-114-15. In most cases, the Joint Committee accepts the judgment of the Appeals Division, but occasionally the Joint Committee will question the Appeals Division's handling of a refund claim. See Alexander & Gleicher, supra note 150, at A-115.
185. Indeed, giving regulated parties the opportunity to vindicate their interests through the proper application of procedural requirements is rather the point of the relaxed requirements for establishing standing to challenge agency violations of procedural rights. See supra notes 109-113 and related text.
186. See, e.g., INTERNAL REVENUE MANUAL § 4.10.7.5.3.1(5) (2006) (denying IRS examiners the authority to consider hazards of litigation in reaching conclusions about case resolution); 1 CASEY, supra note 57, § 3.51 (noting that on issues "involving principles laid down in the regulations, rulings or other expressions of [IRS] policy, . . . the examiner must follow official policy").
187. See Treas. Reg. §§ 601.103(c)(1) (as amended in 1984), 601.105(c)-(d) (as amended in 1987), 601.106(b) (as amended in 1987) (recognizing taxpayer's opportunity to dispute liability before IRS Appeals Office); 3 CASEY, supra note 57, § 10.62 (discussing taxpayer's right to pursue internal IRS appeal for disagreements with IRS examiner over refund claim issues).
188. See INTERNAL REVENUE MANUAL § 8.6.4.1 (2007) ("The Appeals mission is to resolve tax controversies, without litigation, on a basis which is fair and impartial to both the Government and the taxpayer . . . . A fair and impartial resolution is one which reflects on an issue-by-issue basis the probable result in event of litigation, or one which reflects mutual concessions for the purpose of settlement based on relative strength of the opposing positions where there is substantial uncertainty of the result in event of litigation."); see also 1 CASEY, supra note 57, § 4.13 (describing Appeals Division mission similarly); Alexander & Gleicher, supra note 150, at A-79, A-98-99 (noting that the purpose of the Appeals Division "is to resolve as many issues as possible without trial and to resolve them promptly" and describing different bases upon which Appeals settles cases);
189. Richard Lavoie, Analyzing the Schizoid Agency: Achieving the Proper Balance in Enforcing the Internal Revenue Code, 23 AKRON TAX J. 1, 10 (2008) (observing that the "primary function" of Appeals Officers "is to settle cases," which often includes "splitting the issue on a percentage basis"). But see Lavoie, supra, at 10 n.50 (observing that "Appeals officers generally refuse to settle any issue on a percentage basis where they believe the taxpayer has less than a 20% chance of success on the merits . . . to dissuade nuisance settlements").
190. See I.R.C. § 6103(a) (2000) (precluding IRS disclosure of return information); id. § 6103(b)(2) (defining "return information" as including a wide array of taxpayer information, including tax liabilities or deficiencies and "whether the taxpayer's return was . . . examined or subject to other investigation or processing, or any other data . . . collected by the Secretary with respect to a return or with respect to the determination of the existence, or possible existence, of lability").
191. See Gregory P. Mathews, Using Negotiation, Mediation, and Arbitration to Resolve IRS-Taxpayer Disputes, 19 OHIO ST. J. ON DISP. RESOL. 709, 723-27 (2004);
192. Theodore D. Peyser, Refund Litigation, 631-2d Tax Mgmt. (BNA), at A-41 (2003) (discussing settlement policies of DOJ Tax Division).
193. See I.R.C. § 7430(a)-(b)(1) (offering prevailing taxpayers the possibility of recovering reasonable administrative and litigation costs incurred in connection with the determination or refund of taxes, interest, or penalties, but only if the taxpayer first exhausts administrative remedies within the IRS); Treas. Reg. § 301.7430-1(b) (as amended in 2003) (including Appeals office conference among the administrative remedies that a taxpayer must exhaust to recover costs under I.R.C. § 7430).
194. See Lederman, supra note 105, at 254 n.211 ("A 'full concession' by the IRS might leave the taxpayer open to subsequent disputes with the IRS in other years if the issue is a recurring one, so the taxpayer might prefer to reject the concession and litigate in order to obtain a precedent.").
195. See KAFKA & CAVANAGH, supra note 46, § 14.01 (comparing taxpayer options).
196. At least two programs specifically allow this: the Advance Pricing Agreement and the Prefiling Agreement Program ("PFA"). See Rev. Proc. 96-53, 1996-2 C.B. 375 ("The [Advance Pricing Agreement] process is designed to be a flexible problem-solving process, based on cooperative and principled negotiations between taxpayers and the Service."); Rev. Proc. 2005-12, 2005-02 I.R.B. 311 ("[The PFA] permits a taxpayer . . . to request that the Service examine specific issues relating to tax returns before those returns are filed."); see also Sheryl Stratton, IRS Issues First Report on Prefiling Agreements, 91 TAX NOTES 198, 198-99 (2001) (summarizing initial PFA program results).
197. See Stratton, supra note 164, at 198 (describing Congress as "exempting PFAs from public disclosure").
198. See Debt Buyers' Ass'n v. Snow, 481 F. Supp. 2d 1, 6, 9 (D.D.C. 2006).
199. See, e.g., Foodservice & Lodging Inst. v. Regan, 809 F.2d 842, 844-45 (D.C. Cir. 1987) (per curiam); California v. Regan, 641 F.2d 721, 723 (9th Cir. 1981); see also supra note 38 and accompanying text.
200. See, e.g., I.R.C. § 6011(a) (2000) (requiring persons liable for taxes under the I.R.C. to file tax returns in accordance with Treasury regulations and forms); id. § 6151(a) (requiring payment of tax without assessment, notice, or demand by the IRS); see also id. § 6001 (requiring taxpayers to keep financial records related to tax liability computation); id. § 6702 (imposing a frivolous return penalty for returns that omit "information on which the substantial correctness of the self-assessment may be judged" or contain "information that on its face indicates that the self-assessment is substantially incorrect" if such a return is "due to . . . a position which is frivolous, or . . . a desire . . . to delay or impede the administration of Federal income tax laws").
201. The IRS follows a program of electronically comparing tax returns filed by taxpayers with income information received from third parties to identify potential underreporting of taxable income. See, e.g., INTERNAL REVENUE MANUAL § 4.19.2.1 (2003) (describing Automated Underreporter);
202. see also Nushin S. Huq, Panelists Discuss Automated Matching System Changes, Innocent Spouse Form, 26 TAX MGMT. WKLY. REP. 1311, 1311 (2007) (describing system improvements to Automated Underreporter program);
203. Robert C. Rea, Automation of Underreporter Program Scheduled for 1992, 10 Tax Mgm't Wkly. Rep. (BNA) 1575 (1991) (describing original Automated Underreporter Program). The IRS also has a "Substitute for Return" program in which it uses income information received from third parties to generate substitute tax returns for taxpayers who have failed to file.
204. See, e.g., INTERNAL REVENUE MANUAL §§ 4.19.17.1, 4.19.17.1.3.1-3 (2006) (outlining the program and providing procedures);
205. Tax Man agement Weekly Report In Brief, 6 Tax Mgmt. Wkly. Rep. (BNA) 77 (1987) (describing the program).
206. For example, in 2006, fewer than one percent of all individual income tax returns filed were audited by the IRS. See TIGTA Examines Compliance Activity Trends Through Fiscal 2006, 2007 TAX NOTES TODAY 68-46, text accompanying note 34 (2007). The vast majority of those audits were limited "correspondence audits" conducted by mail rather than face-to-face contact. See id. The audit rate for corporate returns was slightly higher at 1.25%. See id. at text accompanying note 38.
207. In 2006, the audit rate for corporations with assets of $10 million or more was higher at 18.6%. See id. at fig.50. The IRS also has the Coordinated Industry Case ("CIC") program, previously known as the Coordinated Examination Program, for very large corporations under which the IRS permanently assigns an agent to audit the corporation's tax compliance over time. See INTERNAL REVENUE MANUAL § 4.1.21.2.2.1.1 (2007) (addressing CIC program planning); id. § 1.11.2.6.1 (noting change in program name);
208. John W. Lee, Transaction Costs Relating to Acquisition or Enhancement of Intangible Property: A Populist, Political, but Practical Perspective, 22 VA. TAX REV. 273, 285 n.61 (2002) (summarizing CIC program history). The resulting higher overall audit rate for larger corporations nevertheless leaves a lot of corporate activity unexamined, as evidenced by the overall corporate income tax return audit rate of 1.25%. See TIGTA Examines, supra note 170, at text accompanying note 38.
209. The IRS has made available Form 8275-R for the purpose of "disclos[ing] positions taken on a tax return that are contrary to Treasury regulations." IRS, Dep't of Treasury, Instructions for Form 8275-R, at 1 (2007), available at http://www.irs.gov/pub/irs-pdf/i8275r.pdf. See also Anthony C. Infanti, Homo Sacer, Homosexual: Some Thoughts on Waging Tax Guerilla Warfare, 2 UNBOUND: HARV. J. LEGAL LEFT 27, 53-54 & n.118 (2006), http://www.legalleft.org/wp-content/ uploads/2008/04/2unb027-infanti.pdf (suggesting filing Form 8275-R and a cover letter with a tax return to highlight noncompliance and invite IRS scrutiny).
210. See, e.g., 3 CHARLES H. KOCH, JR., ADMINISTRATIVE LAW & PRACTICE § 1331[2] (2d ed. 1997) (summarizing goals of administrative exhaustion requirements generally).
211. See also supra notes 15-37 and accompanying text (summarizing Treasury's APA non-compliance in more detail).
212. See, e.g., Prohibited Allocations of Securities in an S Corporation, T.D. 9302, 71 Fed. Reg. 76,134, 76,135 (Dec. 20, 2006) (taking sixteen months to finalize temporary regulations, which in turn had superseded temporary regulations issued two years earlier);
213. Assumption of Partner Liabilities, T.D. 9207, 70 Fed. Reg. 30,334, 30,335 (May 26, 2005) (finalizing and removing temporary regulations issued almost two years previously).
214. See, e.g., Additional Rules for Exchanges of Personal Property Under Section 1031(a), T.D. 9202, 70 Fed. Reg. 28,818, 28,818 (May 19, 2005) (finalizing and removing temporary regulations issued nine months earlier with T.D. 9151);
215. Collected Excise Taxes; Duties of Collector, T.D. 9221, 70 Fed. Reg. 49,869 (Aug. 25, 2005) (finalizing and removing temporary regulations issued one year earlier with T.D. 9149);
216. Tax Return Preparers - Electronic Filing, T.D. 9119, 69 Fed. Reg. 15,248, 15,248 (Mar. 25, 2004) (finalizing and removing temporary regulations issued eleven months earlier with T.D. 9053);
217. Transfers of Compensatory Options, T.D. 9148, 69 Fed. Reg. 48,392, 48,392 (Aug. 10, 2004) (finalizing temporary regulations issued thirteen months earlier with T.D. 9067).
218. Statistics compiled by the Federal Judiciary Center show that civil cases filed in the federal district courts, where refund actions would be filed, take roughly two years on average to complete the trial process. See U.S. District Court - Judicial Caseload Profile Report, http://www.uscourts.gov/cgi- bin/cmsd2007.pl (follow "Generate" button) (recording average time periods from filing to civil trial as ranging from 21.8 months in 2002 to 24.6 months in 2007). An appeal of a federal district court judgment to a federal circuit court of appeals adds approximately another year to the litigation process. See U.S. Court of Appeals - Appellate Judicial Caseload Profile Report, http://www.uscourts.gov/cgi-bin/cmsa2007.pl (follow "Generate" button; then follow "Show Page Two" button under chart) (documenting median times from filing notice of appeals to disposition as ranging from 10.7 months in 2002 to 12.2 months in 2007). Of course, many tax cases take much longer to reach judicial review, as taxpayers attempt in good faith to work through the administrative process first. See, e.g., UnionBanCal Corp. v. Comm'r, 305 F.3d 976, 980-81, 983 n.36 (9th Cir. 2002) (documenting case history including commencement of IRS audit of taxpayer's return in 1994 followed by notice of deficiency issued in 1997 and a Tax Court decision in 1999).
219. See Petry v. Block, 737 F.2d 1193, 1203-05 (D.C. Cir. 1984) (acknowledging the difficulty in fashioning a remedy under such circumstances).
220. See, e.g., Air Transp. Ass'n of Am. v. Dep't of Transp., 900 F.2d 369, 379-80 (D.C. Cir. 1990) (holding final regulations invalid due to procedural failings of interim-final regulations), vacated without opinion and remanded, 498 U.S. 1023 (1991), vacated as moot, 933 F.2d 1043 (D.C. Cir. 1991); cf. Natural Res. Def. Council, Inc. v. EPA, 683 F.2d 752, 767-68 (3d Cir. 1982) (rejecting postpromulgation notice and comment as inadequate and invalidating regulatory amendments so adopted). But see also Michael Asimow, Interim-Final Rules: Making Haste Slowly, 51 ADMIN. L. REV. 703, 725-26 (1999) (discussing and criticizing this remedy for temporary or interim-final regulations adopted without good cause).
221. See, e.g., Fed. Express Corp. v. Mineta, 373 F.3d 112, 120 (D.C. Cir. 2004) (holding postpromulgation opportunity for comment sufficient); cf. Mortgage Investors Corp. of Ohio v. Gober, 220 F.3d 1375, 1378-79 (Fed. Cir. 2000) (upholding final regulation "virtually identical to" temporary regulation because agency considered comments).
222. See, e.g., Advocates for Highway & Auto Safety v. Fed. Highway Admin., 28 F.3d 1288, 1292 (D.C. Cir. 1994) ("The touchstone of our inquiry is thus the agency's open-mindedness . . . ."); Levesque v. Block, 723 F.2d 175, 188 (1st Cir. 1983) ("When the response suggests that the agency has been open-minded, the presumption against a late comment period can be overcome and a rule upheld."); cf. U.S. Steel Corp. v. EPA, 605 F.2d 283, 291 (7th Cir. 1979) ("Given that the agency was clearly willing to consider, fully and objectively, all comments in the post-promulgation period, there is no reason to believe that its consideration of the comments would have been any different if completed before the effective date.").
223. See, e.g., Gober, 220 F.3d at 1379 ("The APA does not expressly require agencies to keep an 'open' mind, whatever such a subjective term might mean.").
224. See, e.g., NRDC v. EPA, 683 F.2d at 768 (concluding that allowing postpromulgation notice and comment to cure prepromulgation failure would circumvent the APA); Sharon Steel Corp. v. EPA, 597 F.2d 377, 381 (3d Cir. 1979) ("If a period for comments after issuance of a rule could cure a violation of the APA's requirements, an agency could negate at will the Congressional decision that notice and an opportunity for comment must precede promulgation.").
225. See, e.g., U.S. Steel Corp., 605 F.2d at 291 ("Finally, we cannot say that the rule under review would have been any different if notice and comment had occurred before the effective date."); cf. Petry v. Block, 737 F.2d 1193, 1203 (D.C. Cir. 1984) ("[R]emand to the agency for further proceedings would not in any event be necessary.").
226. I.R.C. § 7805(b)(1)(B)-(C) (2000). Prior to 1996, the language of I.R.C. § 7805(b) presumed that all Treasury regulations would apply retroactively unless Treasury stated otherwise; but in the Taxpayer Bill of Rights 2 enacted in 1996, Congress amended I.R.C. § 7805(b) to limit retroactive application to specified dates or circumstances, including those listed in I.R.C. § 7805(b)(1)(B). See, e.g., Meserve Drilling Partners v. Comm'r, 152 F.3d 1181, 1183-84 & n.4 (9th Cir. 1998) (recognizing both pre-1996 presumption in favor of retroactivity and 1996 amendment); BORIS I. BITTKER & LAWRENCE LOKKEN, FEDERAL TAXATION OF INCOME, ESTATES AND GIFTS ¶ 110.4.3 (summarizing I.R.C. § 7805(b) history);
227. Benjamin J. Cohen & Catherine A. Harrington, Is the Internal Revenue Service Bound by Its Own Regulations and Rulings?, 51 TAX LAW. 675, 696-706 (1998) (summarizing history of I.R.C. § 7805(b) and the 1996 amendments).
228. See, e.g., Treas. Reg. § 1.263A-15(a)(3) (as amended in 2005) (making regulatory language finalized with T.D. 9203 retroactively applicable to date related temporary regulations were published); Treas. Reg. § 1.163(d)-1(d) (as amended in 2005) (applying regulations finalized with T.D. 9191 retroactively applicable to date temporary regulations were published); Assumption of Partner Liabilities, T.D. 9207, 70 Fed. Reg. 30,334, 30,334-35 (May 26, 2005) (same with respect to other temporary regulations);
229. Section 1374 Effective Dates, T.D. 9236, 70 Fed. Reg. 75,730, 75,731 (Dec. 21, 2005) (same).
230. The courts have long applied the abuse of discretion standard to evaluate Treasury's decisions to apply regulations retroactively. See, e.g., Snap-Drape Inc. v. Comm'r, 98 F.3d 194, 203 (5th Cir. 1996) (applying abuse of discretion standard and upholding retroactive application, despite "inordinately harsh results" produced, because the regulations at issue were not wholly unforeseeable); Tate & Lyle, Inc. v. Comm'r, 87 F.3d 99, 107-08 (3d Cir. 1996) (finding retroactive application of Treasury regulation not an abuse of discretion and also consistent with due process); Anderson, Clayton & Co. v. United States, 562 F.2d 972, 979, 981 (5th Cir. 1977) (articulating relevant factors for reviewing retroactive application of Treasury regulations under the abuse of discretion standard); Cohen & Harrington, supra note 185, at 679-80 (indicating that retroactivity may represent abuse of discretion if it has harsh effects on taxpayers, creates irrational distinctions between taxpayers, or undermines taxpayer reliance on previously valid regulations). Although Congress in 1996 curtailed Treasury's ability to apply its regulations retroactively, see supra note 185, the changes to I.R.C. § 7805(b) appear not to have altered that standard of review. See Klamath Strategic Inv. Fund, LLC v. United States, 440 F. Supp. 2d 608, 625 (E.D. Tex. 2006) (applying abuse of discretion standard to post-1996 retroactivity determination but rejecting retroactive application of regulation because of taxpayer reliance on the twenty-five year history of court interpretations of the previous regulation). Cf. Kandi v. United States, No. C05-0840C, 2006 WL 83463, at *3 (W.D. Wash. Jan. 11, 2006) (applying abuse of discretion standard to Treasury's decision to apply new regulations prospectively only).
231. See Cohen & Harrington, supra note 185, at 701-02 (observing lack of clarity in temporal reach of amended I.R.C. § 7805(b)(1)(B)).
232. See 2 KOCH, supra note 173, § 8.31 (recognizing prominence of remand in administrative law cases, "including such orders as remand for further proceedings, remand with instruction, and reversal and remand. Remand allows for correction while still maintaining the proper allocation of responsibilities between the courts and the agencies."); 3 PIERCE, supra note 37, § 18.1 ("In most cases, successful prosecution of a review proceeding yields instead a judicial decision setting aside the agency action and remanding the proceeding for further agency action not inconsistent with the decision of the reviewing court."); id. § 18.4 (recognizing role of declaratory and injunctive relief in the course of nonstatutory review).
233. See, e.g., Paulsen v. Daniels, 413 F.3d 999, 1008 (9th Cir. 2005) (considering but declining to remand without vacating regulation promulgated without notice and comment); Fertilizer Inst. v. EPA, 935 F.2d 1303, 1312-13 (D.C. Cir. 1991) (remanding regulation for inadequate notice and comment); see also 2 KOCH, supra note 173, § 8.31[1][b] (recognizing remand without vacation as a remedy, but noting judicial disagreement over remedy's legality); supra note 45 (citing sources debating merits of remanding a rule without also vacating it).
234. See, e.g., AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 392, 397 (1999) (invalidating regulation as unreasonable but declining to impose an interpretation and instead remanding because "Congress is well aware that the ambiguities it chooses to produce in a statute will be resolved by the implementing agency"); cf. Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843-44 (1984) (instructing courts to defer to reasonable agency interpretations of ambiguous statutes they administer).
235. See, e.g., NLRB v. Pipefitters, 429 U.S. 507, 522 n.9 (1977) ("When an administrative agency has made an error of law, the duty of the Court is to 'correct the error of law committed by that body, and after doing so to remand the case to the (agency) so as to afford it the opportunity of examining the evidence and finding the facts as required by law." (quoting ICC v. Clyde S.S. Co., 181 U.S. 29, 32-33 (1901))); see also 2 KOCH, supra note 173, § 8.32[3](a)-(f) (recommending remand as an appropriate remedy for a variety of agency errors, including mistakes of law, in applying the law, and in failing to follow procedural requirements).
236. See 3 PIERCE, supra note 37, § 18.1 ("A reviewing court can order an agency to provide the relief it denied only in the unusual case where the court concludes that the underlying law and facts are such that the agency has no discretion to act in any other manner, and then only when the court concludes that a remand to the agency would produce substantial injustice in the form of further delay of the action to which the petitioner is clearly entitled."). One prominent exception seems to be Social Security Administration denials of applications for disability benefits, where reviewing courts occasionally do order the agency to award benefits rather than merely reconsider its decision. See, e.g., Rivera v. Sullivan, 923 F.2d 964, 970 (2d Cir. 1991) (declaring applicant disabled in addition to reversing agency denial of benefits as unsupported by the record). However, the statutory provision governing judicial review in that context explicitly authorizes the courts to intrude more deeply into the agency's sphere, which likely accounts for why the courts treat such cases differently. See 42 U.S.C. § 405(g) (2000) ("The court shall have the power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Commissioner of Social Security, with or without remanding the cause for a rehearing."); see also Sullivan v. Hudson, 490 U.S. 877, 885 (1989) (recognizing that 42 U.S.C. § 405(g) "sugges[s] a degree of direct interaction between a federal court and an administrative agency alien to traditional review of agency action under the [APA]"). But see Williams v. Apfel, 204 F.3d 48, 50 (2d Cir. 1999) (remanding disability benefit denial so that agency could further develop the record).
237. See, e.g., United Dominion Indus., Inc. v. United States, 532 U.S. 822, 834, 838 (2001) (disagreeing with the government's interpretation of the consolidated return regulations in favor of taxpayer's approach as "the better answer" while allowing that Treasury could amend regulations to reflect its view).
238. For example, in deficiency litigation, the I.R.C. gives the Tax Court jurisdiction to "redetermine the correct amount of the deficiency . . . ." I.R.C. § 6214(a) (2000). Further, if in the course of the litigation the Tax Court "finds that there is a deficiency but that the taxpayer has made an overpayment of such tax, the Tax Court shall have jurisdiction to determine the amount of such overpayment." Id. § 6512(b)(1).
239. I.R.C. § 61(a)(1) (designating "compensation for services" as "gross income"); Treas. Reg. § 1.61-2(a) (as amended in 2003) (characterizing tips as "compensation for services").
240. See I.R.C. § 6662 (West Supp. 2006), amended by Pub. L. No. 109-280, § 1219, 120 Stat. 1083 (imposing penalties for noncompliance with Treasury regulations); Treas. Reg. § 1.6662-3 (as amended in 2003) (same).
241. See, e.g., Roberts v. Comm'r, 176 F.2d 221, 223-26 (9th Cir. 1949) (siding with the IRS in concluding that tips are income).
242. One way to think of a regulation invalidated on procedural grounds is as the equivalent of a proposed regulation, which likewise carries no legal force but may be worthy of some consideration in evaluating how to interpret the I.R.C. Accord Butka v. Comm'r, 91 T.C. 110, 130 (1988) (describing proposed regulation as "not a complete nullity" despite its lack of legal effect).
243. See supra note 178 and accompanying text.
244. See I.R.C. § 6601(a), (b)(5) (imposing interest on underpaid taxes beginning with the date the taxpayer accrued the liability for the tax).
245. United States v. Mead Corp., 533 U.S. 218, 226-27 (2001); Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843-44 (1984). I have argued elsewhere that Treasury regulations are entitled to Chevron deference, meaning that unless the I.R.C. is clear, then the courts must defer to Treasury's reasonable interpretations of the I.R.C. as advanced through Treasury regulations. See Chevron, 467 U.S. at 865-66; see also Swallows Holding, Ltd. v. Comm'r, 515 F.3d 162, 167-68 (3d Cir. 2008) (holding that all Treasury regulations are entitled to Chevron deference); Kristin E. Hickman, The Need for Mead: Rejecting Tax Exceptionalism in Judicial Deference, 90 MINN. L. REV. 1537, 1617-18 (2006). Others in the tax community have argued instead that the pre-Chevron deference doctrine of National Muffler Dealers Association v. United States, 440 U.S. 472, 477 (1979), should apply to evaluate tax cases. See Hickman, supra, at 1554-63 (summarizing National Muffler analysis and tax community dispute regarding its ongoing vitality).
246. The scholarly literature analyzing the Chevron deference doctrine is simply too vast to even try to summarize in a footnote. To name just a few of the numerous articles on the subject, see generally Ronald M. Levin, The Anatomy of Chevron: Step Two Reconsidered, 72 CHI.- KENT L. REV. 1253 (1997);
247. Thomas W. Merrill & Kristin E. Hickman, Chevron's Domain, 89 GEO. L.J. 833 (2001);
248. Richard J. Pierce, Jr., Chevron and Its Aftermath: Judicial Review of Agency Interpretations of Statutory Provisions, 41 VAND. L. REV. 301 (1988);
249. Mark Seidenfeld, A Syncopated Chevron: Emphasizing Reasoned Decisionmaking in Reviewing Agency Interpretations of Statutes, 73 TEX. L. REV. 83 (1994);
250. Peter H. Schuck & E. Donald Elliott, To the Chevron Station: An Empirical Study of Federal Administrative Law, 1990 DUKE L.J. 984;
251. Cass R. Sunstein, Law and Administration After Chevron, 90 COLUM. L. REV. 2071 (1990).
252. See Chevron, 467 U.S. at 837.
253. See Mead, 533 U.S. at 227; see also Christensen v. Harris County, 529 U.S. 576, 587 (2000) (identifying Skidmore rather than Chevron as the standard for evaluating interpretations lacking the force of law).
254. Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944). Citing Skidmore, the Mead court paraphrased these factors, saying that agency interpretations not entitled to Chevron deference should be evaluated based upon "the degree of the agency's care, its consistency, formality, and relative expertness, and to the persuasiveness of the agency's position." Mead, 533 U.S. at 228 (citations omitted).
255. See, e.g., Ronald M. Levin, Mead and the Prospective Exercise of Discretion, 54 ADMIN. L. REV. 771, 772 (2002) (noting that Mead's analysis will apply to render Chevron deference appropriate for some informal adjudications and only Skidmore deference for others);
256. Thomas W. Merrill, The Mead Doctrine: Rules and Standards, Meta-Rules and Meta-Standards, 54 ADMIN. L. REV. 807, 821 (2002) (characterizing the question of whether Chevron or Skidmore provides the appropriate standard for evaluating informal adjudications as an "area of uncertainty" after Mead).
257. The agency interpretation at issue in Mead was the product of an informal adjudication - a ruling letter that classified day planners imported by Mead as )[d]iaries . . . , bound" subject to a 4% tariff rather than as "[o]ther items" upon which no tariff was imposed. Mead, 533 U.S. at 224-25. The Court concluded that such ruling letters did not carry the force of law and thus should be evaluated under Skidmore rather than Chevron. See id. at 231. But see Adrian Vermeule, Introduction: Mead in the Trenches, 71 GEO. WASH. L. REV. 347, 349 (2003) (suggesting that informal adjudications may possess "[t]he requisite delegatory intent" for Chevron deference).
258. See, e.g., Alan B. Morrison, Administrative Agencies Are Just Like Legislatures and Courts - Except When They're Not, 59 ADMIN. L. REV. 79, 118 (2007) (suggesting that Chevron only applies when agencies reach their interpretations through "more or less formal proceeding[s], in which input from outside the agency is sought - a rarity in informal adjudications").
259. See, e.g., Richard Murphy, Judicial Deference, Agency Commitment, and Force of Law, 66 OHIO ST. L.J. 1013, 1043 (2005) (contending that the informal adjudication at issue in Mead lacked the force of law necessary for Chevron deference because it "left [the agency] free to change course whenever it pleased in any minimally rational way").
260. See Merrill, supra note 207, at 814-15 (suggesting that congressional imposition of adjudication procedures may signal Chevron eligibility); id. at 827 (contending that agency orders "regarded as res judicata and . . . no longer open to challenge on the merits" after a given time for appeal has elapsed carry force and effect of law).
261. In another article, my coauthor and I document a study demonstrating that, in a five-year period, the government won 60.4% of cases in which the courte of appeals employed the Skidmore standard to evaluate agency interpretations of ambiguous statutes. See Kristin E. Hickman & Matthew D. Krueger, In Search of the Modern Skidmore Standard, 107 COLUM. L. REV. 1235, 1275 (2007). By comparison, Orin S. Kerr published a study several years ago finding that the government won eighty-nine percent of cases in which the courts of appeals applied the Chevron evaluative standard under similar circumstances.
262. See Orin S. Kerr, Shedding Light on Chevron: An Empirical Study of the Chevron Doctrine in the U.S. Courts of Appeals, 15 YALE J. ON REG. 1, 30-31 (1998).
263. See supra notes 64-72 and accompanying text.
264. See, e.g., Stephenson v. Brady, 927 F.2d 596, 1991 WL 22835, at *2, *4-5 (4th Cir. 1991) (per curiam) (unpublished table decision); Reimer v. United States 919 F.2d 145, 1990 WL 186825, at *1-2 (9th Cir. 1990) (unpublished table decision). Cf. Inv. Annuity, Inc. v. Blumenthal, 609 F.2d 1, 8-9 (D.C. Cir. 1979) (reading I.R.C. § 7421 and the DJA as statutory limitations on pre-enforcement judicial review in tax context generally, notwithstanding APA presumption in favor thereof). But see E. Ky. Welfare Rights Org. v. Simon, 506 F.2d 1278, 1285-86 (D.C. Cir. 1974), overruled on other grounds, 426 U.S. 26 (1976) (concluding that I.R.C. § 7421, the DJA, and APA § 701 do not operate to preclude judicial review of all pre-enforcement tax claims).
265. In Simon v. Eastern Kentucky Welfare Rights Organization, the plaintiff-appellants raised an APA procedural claim, contending that the IRS failed to put a Revenue Ruling to which they objected through notice-and-comment rulemaking. Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 33-34 (1976). Although the government claimed that the court lacked jurisdiction to consider this and other claims pursuant to I.R.C. § 7421 and the DJA, see id. at 34-35, 37, the Court declined to consider that issue and instead dismissed the case on standing grounds. See id. at 37.
266. See, e.g., George B. Shepherd, Fierce Compromise: The Administrative Procedure Act Emerges from New Deal Politics, 90 NW. U. L. REV. 1557, 1635, 1651 (1996) (characterizing notice-and-comment rulemaking as "balanc[ing] the interests of agencies in speed and efficiency and the interests of the public in participating in the rulemaking process"); id. at 1558-60 (describing the APA generally as a "hard-fought compromise" that struck a balance "between promoting individuals' rights and maintaining agencies' policy-making flexibility").
267. Cf. Seidenfeld, supra note 143, at 97-99 (observing that "the possibility of facing a rule challenge prompts the agency to take greater care when promulgating the rule"). Rightly or wrongly, I am presuming that the courts' jurisprudence regarding the applicability of standing and ripeness limitations in tax cases would follow, as I argue it has already done. See supra Part II.B.
268. THE OXFORD DICTIONARY OF QUOTATIONS 716 (Angela Partington ed., 4th ed. 1996) (translating "le mieux est l'ennemi du bien" as "[t]he best is the enemy of the good" and attributing the saying to VOLTAIRE, DICTIONNAIRE PHILOSOPHIQUE (1770)); see also United Hosp. v. Thompson, 383 F.3d 728, 733 (8th Cir. 2004) (rejecting process challenge against agency action deemed "incomplete" but reasonable because "[t]he perfect must not become the enemy of the good"); MCI Telecomm. Corp. v. FCC, 627 F.2d 322, 340-41 (D.C. Cir. 1980) (observing of agency regulatory efforts that "[c]omplex regulation must still be credible regulation" and "[t]he best must not become the enemy of the good"). There is little doubt that taxpayers and their advisers seek as much guidance as possible in interpreting the I.R.C. Why Treasury must satisfy this demand with legally-binding temporary regulations rather than nonbinding revenue rulings, revenue procedures, and notices is less clear, but is a topic for another day.
269. When Treasury bothers to claim good cause for issuing temporary regulations without prepromulgation notice and comment, it typically asserts the need for "immediate guidance." See, e.g., Guidance Under Section 1502, T.D. 9155, 69 Fed. Reg. 51,175, 51,176 (Aug. 18, 2004);
270. Return of Partnership Income, T.D. 9117, 69 Fed. Reg. 12,068, 12,068 (Mar. 15, 2004);
271. Effect of Elections in Certain Multi-Step Transactions, T.D. 9071, 68 Fed. Reg. 40,766, 40,767 (July 9, 2003);
272. see also INTERNAL REVENUE MANUAL § 32.1.5.4.7.5.1 (2004) (recommending for invoking good cause, "These regulations are necessary to provide taxpayers with immediate guidance.").
273. See, e.g., Thomas O. McGarity, Some Thoughts on "Deossifying" the Rulemaking Pro cess, 41 DUKE L.J. 1385, 1410-26 (1992) (listing burdens of judicial review among contributors to a more cumbersome modern APA rulemaking process); Pierce, supra note 143, at 88-89 (citing pre-enforcement judicial review under Abbott Labs. v. Gardner, 387 U.S. 136 (1967), as a major cause of rulemaking ossification); Mashaw, supra note 143, at 233-35 (criticizing pre-enforcement judicial review).
274. See, e.g., PIERCE ET AL., supra note 38, § 6.4.6b, at 336 ("Promulgation of a single major rule often requires five to ten years and tens of thousands of agency staff hours.").
275. See, e.g., Pierce, supra note 143, at 88-89 (advocating reversal of Abbott Laboratories and a return to enforcement-based judicial review); Mashaw, supra note 143, at 235 (extolling the virtues of postenforcement judicial review). But see Seidenfeld, supra note 143, at 97-99 (noting potential problems with APA compliance and regulation quality arising from delaying judicial review).
276. Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803).
277. See supra note 1 and accompanying text.
278. See, e.g., supra note 2 and accompanying text; see also, e.g., Bush v. Lucas, 462 U.S. 367, 388 (1983) (counseling caution in supplementing comprehensive statutory and regulatory remedial schemes with judicial remedies). But see Schweiker v. Chilicky, 487 U.S. 412, 440 (1988) (recognizing in dicta that congressional failure to remedy apparent agency wrongs "in no way suggests a conscious choice to leave those wrongs unremedied").
279. Cf. Schweiker, 487 U.S. at 429 (declining to interfere with congressionally adopted remedial scheme for wrongful termination of disability benefits, "[w]hether or not we believe that its response was the best response"); Bush, 462 U.S. at 388 ("The question is not what remedy the court should provide for a wrong that would otherwise go unredressed. It is whether an elaborate remedial system that has been constructed step by step, with careful attention to conflicting policy considerations, should be augmented by the creation of a new judicial remedy for the . . . violation at issue. That question obviously cannot be answered simply by noting that existing remedies do not provide complete relief for the plaintiff.").
280. Cf. Bush, 462 U.S. at 388 ("The [remedial] policy judgment should be informed by a thorough understanding of the existing regulatory structure and the respective costs and benefits that would result from the addition of another remedy . . . .").
281. See, e.g., Hibbs v. Winn, 542 U.S. 88, 103 (2004); South Carolina v. Regan, 465 U.S. 367, 386 (1984) (O'Connor, J., concurring); Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 7 (1962); see also supra note 59 and accompanying text.
282. See supra note 216 and accompanying text.
283. See 5 U.S.C. §§ 701-706 (2000); see also, e.g., Abbott Labs. v. Gardner, 387 U.S. 136, 140-41 (1967) (recognizing APA's broad presumption in favor of judicial review of agency action): see also supra notes 38-43 (outlining APA and judicial support for pre-enforcement review of agency action).
284. See, e.g., I.R.S. Notice 2008-47, 2008-18 I.R.B. 869 (Apr. 17, 2008) (asking the public to identify issues for guidance projects); I.R.S. Notice 2007-17, 2007-12 I.R.B. 748 (Feb. 28, 2007) (announcing pilot program designed to increase public participation in Treasury's rulemaking efforts); Hickman, supra note 4, at 1797-99 (discussing evolution of Treasury and IRS attitudes toward APA compliance and citing Treasury and IRS officials concerning the value of the notice-and-comment process).
285. See Notice: Administrative Conference of the United States, Adoption of Recommendations, 60 Fed. Reg. 43,108, 43,111-12 (Aug. 18, 1995) (expressing concern that agency use of temporary or interim final regulations in the absence of good cause would promote perceptions of agency bias in the rulemaking process and consequently discourage public participation). Cf. Stephanie Stern, Cognitive Consistency: Theory Maintenance and Administrative Rulemaking, 63 U. PITT. L. REV. 589, 620-30 (2002) (suggesting that even the standard notice-and-comment rulemaking process discourages public participation by committing agency officials to a single approach and creating perceptions of agency bias in favor thereof).
286. Korb Laments Penalty Pileup, Promises More Practitioner-Initiated Guidance, 2007 TAX NOTES TODAY 206-2 (Oct. 24, 2007) (quoting IRS Chief Counsel Donald Korb as acknowledging that "this has been going on forever where people come in and give us proposed ideas - often in secret").
287. See Mariano-Florentino Cuéllar, Rethinking Regulatory Democracy, 57 ADMIN. L. REV. 411, 414, 460-61, 468-69 (2005).
288. Cf. Hartman v. Comm'r, T.C.M. (RIA) 2008-124 (2008), app. A (appending statement of former IRS Chief Counsel B. John Williams in response to finding that IRS attorneys perpetrated a fraud on the courts in battling a set of tax shelter cases: "Although some would like to deny that the tax system plays a vital role in society, and few of us actually like paying taxes, confidence in the integrity and fairness of the tax system is vital to our democracy. The tax system touches more people in this country than any other part of the government or our laws. The loss of confidence in its integrity is the loss of confidence in the government itself.").
289. Miller v. Standard Nut Margarine Co., 284 U.S. 498, 551 (1932) (interpreting predecessor of I.R.C. § 7421 as inapplicable in the presence of "special and extraordinary facts and circumstances"); see also Bob Jones Univ. v. Simon, 416 U.S. 725, 744-45 (1974) (recognizing Standard Nut Margarine as equating I.R.C. § 7421 with traditional equitable principles); Paul H. Asofsky, Injunctions and Declaratory Judgments in Federal Tax Controversies, 28 RUTGERS L. REV. 785, 791-93 (1975) (recognizing support of Standard Nut Margarine and its progeny for substantial equity jurisdiction in tax cases).
290. See, e.g., Bob Jones Univ., 416 U.S. at 744 (describing Standard Nut Margarine as "effectively repealing [I.R.C. § 7421]"); James J. Lenoir, Congressional Control over Suits to Restrain the Assessment or Collection of Federal Taxes, 3 ARIZ. L.
291. Gale Ann Norton, The Limitless Federal Taxing Power, 8 HARV. J.L. & PUB. POL'Y 591, 622-23 (1985) (observing that jurisprudence based on Standard Nut Margarine "virtually negated the Anti-Injunction Act, as taxpayers could often prove that payment of taxes would inflict irreparable financial loss").
292. See Hickman, supra note 4, at 1796-97 (documenting history of Treasury and IRS perceptions of APA requirements based on interviews with former government officials and other sources); Laurens Williams, Preparation and Promulgation of Treasury Department Regulations Under Internal Revenue Code of 1954, in 8 MAJOR TAX PLANNING 733, 748-50 (1956) (discussing role of L&R Division in drafting and reviewing Treasury regulations).
293. See Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 5-6 (1962) (adopting current restrictive standard); see also Bob Jones Univ., 416 U.S. at 744-45 (reiterating Court's repudiation in Williams Packing of Standard Nut Margarine's "extraordinary and exceptional circumstances test").
294. See Hickman, supra note 4, at 1797.
295. See Hickman, supra note 4, at 1796-99 (documenting evolution of IRS lack of attention to IRS procedural requirements based on interviews with former Treasury and IRS officials and attorneys and commentary by others).
296. See I.R.C. § 7805(e)(1) (2000) ("Any temporary regulation issued by the Secretary shall also be issued as a proposed regulation."); id. § 7805(e)(2) ("Any temporary regulation shall expire within 3 years after the date of issuance of such regulation.").
297. See, e.g., Asimow, supra note 29, at 363-64 (discussing history of I.R.C. § 7805(e)); Vasquez & Lowy, supra note 21, at 254 (identifying reasons for adopting I.R.C. § 7805(e)).
298. See I.R.S. Notice 2007-17, 2007-12 I.R.B. 748 (Feb. 28, 2007).
299. See id.
300. See generally Baucus, Grassley Oppose IRS Plan to Outsource Writing of Agency Rules, 2007 TAX NOTES TODAY 52-32 (Mar. 15, 2007);
301. Tax Administration: Letting Practitioners Help Write Guidance Poses No More Risk of Influence, TIGTA Says, Daily Rep. for Executives (BNA), at G-6 (Mar. 12, 2008).
302. Cf. Comm'r v. Shapiro, 424 U.S. 614, 616-17 (1976) (discussing prerequisites to IRS's ability to assess or collect taxes); Bull v. United States, 295 U.S. 247, 259-60 (1935) (discussing more generally the particular role of assessment in the exaction of taxes by the sovereign).
303. See I.R.C. § 6203 (2000) (prescribing the method of assessment as "by recording the liability of the taxpayer in the office of the Secretary [of the Treasury] in accordance with rules or regulations prescribed by the Secretary"); see also CASEY, supra note 57, § 2:02 (describing assessment as the act of recording a taxpayer's liability).
304. I.R.C. § 6201(a) authorizes the Secretary of the Treasury "to make . . . assessments of all taxes." I.R.C. § 6201(a). I.R.C. § 6501(a) imposes a general three-year limitation period on tax assessments but provides several exceptions from that rule. See I.R.C. § 6501(a), (c). Other I.R.C. provisions further authorize and impose rules upon the government for making "supplemental assessments," "termination assessments," and "jeopardy assessments." I.R.C. § 6204 (authorizing supplemental assessments "whenever it is ascertained that any assessment is imperfect or incomplete in any material respect"); id. § 6851(a), (b) (authorizing termination assessments of taxes, interest, and penalties upon finding that the taxpayer intends to leave the country or hide his assets to avoid collection, but requiring the Secretary also to notify the taxpayer immediately of such assessment); id. § 6852 (granting authority and imposing requirements for termination assessments in cases involving political expenditures by tax-exempt organizations); id. § 6861(a)-(b) (authorizing the Secretary to assess identified tax deficiencies immediately "[i]f the Secretary believes that the assessment or collection of a deficiency . . . will be jeopardized by delay," but requiring the Secretary to notify the taxpayer "within 60 days after the making of the assessment"). I.R.C. § 6215 provides for the assessment of tax deficiencies found by the Tax Court, while I.R.C. § 7485 allows a taxpayer who loses before the Tax Court to post a bond for the purpose of staying assessment pending appeal. I.R.C. §§ 6215, 7485.
305. See, e.g., CASEY, supra note 57, § 13C:01 (noting that, while the framework for the collection process is outlined in I.R.C. §§ 6302-05 and 6331-44, most collection procedure detail is prescribed through Treasury regulations and informal instructions to IRS personnel).
306. For example, I.R.C. § 6303 instructs the IRS to give notice to taxpayers and demand payment within sixty days of making an assessment. See I.R.C. § 6303. I.R.C. § 6306 authorizes the IRS to contract with private parties to assist in certain aspects of collecting amounts due. See I.R.C. § 6306. Other provisions authorize and establish extensive rules for levying upon taxpayers' property as part of IRS collection efforts. See, e.g., I.R.C. § 6331(a) (authorizing the IRS to collect taxes by levy if a taxpayer neglects or refuses to pay after notice and demand); id. § 6334 (exempting certain property from levy by the IRS); id. § 6342 (instructing the IRS in how to apply the proceeds from taxpayer property seized and sold in the course of collection).
307. Cf. Asofsky, supra note 236, at 803 (recognizing the plausibility of interpreting I.R.C. § 7421 as applying only "at a relatively late stage in the taxing process, i.e., after the tax has been determined").
308. See, e.g., Comm'r v. Shapiro, 424 U.S. 614, 616-19 (1976) (recognizing assessment as a particular act under the I.R.C. and noting that the IRS has made an assessment in the case at bar); supra note 62 and accompanying text (identifying other such cases).
309. See Hibbs v. Winn, 542 U.S. 88, 103-04 (2004); see also supra notes 73-75 and accompanying text. Cf. Foodservice & Lodging Inst, Inc. v. Regan, 809 F.2d 842, 846 & n.10 (D.C. Cir. 1987) (per curiam) (recognizing jurisdiction for pre-enforcement review over regulatory provision requiring employers to report data so that the IRS could study tipping patterns, tip-sharing arrangements, and tip compliance patterns as unrelated to the assessment or collection of taxes).
310. 28 U.S.C. § 2201(a) (2000).
311. See supra note 57 and accompanying text (citing sources).
312. Hence the suggestions by some that the scope of the DJA's limitation may be broader than that of I.R.C. § 7421. See, e.g., Alexander v. "Americans United" Inc., 416 U.S. 752, 759 n.10 (1974) (opining that the DJA's tax exception "is at least as broad as the prohibition of the Anti-Injunction Act"); Bob Jones Univ. v. Simon, 416 U.S. 725, 732 n.7 (1974) (same); IRS, Litigation Guideline Memorandum GL-52, 1991 WL 1167968, at *4 (June 28, 1991) (taking the position that the DJA is broader in scope than I.R.C. § 7421); CASEY, supra note 57, § 2:47 (recognizing existing jurisprudence treating I.R.C. § 7421 and DJA as coterminous but observing that the language of the DJA seems "more comprehensive" than I.R.C. § 7421).
313. See 3 PIERCE, supra note 37, § 18.4 ("It is more difficult to obtain injunctive relief than declaratory relief. Injunctive relief is available only when the plaintiff establishes irreparable harm and, in the context of past unlawful official conduct, only when the court determines that the conduct will persist in the absence of an injunction.").
314. See, e.g., Bullock v. Latham, 306 F.2d 45, 47-48 (2d Cir. 1962) (recognizing jurisprudence permitting equitable jurisdiction under I.R.C. § 7421 and opining that "[i]t is unreasonable to think that a court with authority to issue a restraining order is without power to declare the rights of the parties in connection therewith" (quoting Tomlinson v. Smith, 128 F.2d 808 (7th Cir. 1942))); see also Asofsky, supra note 236, at 799-80 ("Those courts dealing explicitly with the issue [of the relationship between I.R.C. § 7421 and the DJA] have held that the two statutes are coterminous.").
315. See S. REP. NO. 74-1240 (1935).
316. See supra note 236 and accompanying text.
317. South Carolina v. Regan, 465 U.S. 367 (1984).
318. See id. at 378, 380-81; see also supra notes 90-94 and accompanying text (summarizing South Carolina v. Regan exception from I.R.C. § 7421).
319. See South Carolina v. Regan, 465 U.S. at 373, 378-81.
320. Debt Buyers' Ass'n v. Snow, 481 F. Supp. 2d 1, 10 (D.D.C. 2006); see also Foodservice & Lodging Inst. v. Regan, 809 F.2d 842, 844-45 (D.C. Cir. 1987) (per curiam) (reaching same conclusion); California v. Regan, 641 F.2d 721, 723 (9th Cir. 1981) (same); supra notes 96-98 and accompanying text (summarizing this jurisprudence).
321. See Abbott Labs. v. Gardner, 387 U.S. 136, 152-53 (1967).