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Wednesday, November 26, 2014

Osofsky on tax nonenforcement (guest post)

The following is by Leigh Osofsky (Miami)
President Obama's recent immigration nonenforcement announcements have caused scholars to go searching for an appropriate lens through which to judge executive nonenforcement.  The problem is that each of the potential lenses relies on distinctions that are not coherent, or are almost impossible to apply.  
For instance, many constitutional scholars have suggested that categorical nonenforcement is impermissible, whereas merely setting priorities (or, some would say, case-by-case discretion) is permissible.  The President and the OLC have implicitly adopted this distinction, by taking pains to state that case-by-case discretion has been maintained in this case. However, the distinction between categorical nonenforcement and setting priorities (or case-by-case discretion) is more illusory than real.  Is a nonenforcement policy, like President Obama's recent immigration policies, really not categorical if it preserves some case-by-case discretion in a manner that nonetheless assures millions of people that the threat of deportation has, for all intents and purposes, been lifted? If it is so easy to disguise what is in reality a categorical policy as a case-by-case policy should the legitimacy of the action really turn on such a distinction? Another distinction that constitutional scholars often make is the distinction between nonenforcement motivated by enforcement resource limitations (widely believed to be legitimate) and nonenforcement motivated by policy (widely suggested to be illegitimate).  The OLC notes that it is not relying on this distinction alone in opining about President Obama's nonenforcement policies, and for good reason.  How it is possible to make this distinction in an intellectually coherent way when thinking about an agency that is perpetually resource-strapped?  While many instances of nonenforcement will save resources, there is inevitably going to be some policy reason why a particular nonenforcement strategy is chosen.  Should the legitimacy of nonenforcement rest on the distinction between policy and enforcement resource limitations when they are so often going to be intertwined?  Finally, the OLC introduces a new, and quite interesting test in its recent opinion.  The OLC looks to whether nonenforcement is consistent with Congress's intent, as expressed through the relevant statutory scheme. However, as Cristina Rodriguez and Adam Cox have suggested recently on Balkinization, making this determination in the context of a vast and complex statute is going to be exceedingly difficult.  

So how should we judge nonenforcement given the difficulties of the existing lenses?  I am not sure I have the final answer but I do believe that something important has been left out of the analysis thus far.  When an agency does not enforce the law, it is substantially affecting rights and obligations.  A long line of literature regarding administrative legitimacy has contemplated how an agency can have a substantial impact on rights and obligations under the law in a legitimate way.  Three hallmarks of agency legitimacy are: accountability (under political accountability theories of the legitimacy of the administrative state), deliberation (under civic republican theories of the legitimacy of the administrative state), and nonarbitrariness (under nonarbitrariness theories of the legitimacy of the administrative state).  

In a recent (working) Article http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2513349 , I argue that in certain circumstances categorical nonenforcement of the law can increase the accountability, deliberation, and nonarbitrariness of inevitable agency nonenforcement of the law.  The Article is intentionally rooted in agency nonenforcement (and in the tax law in particular), rather than an examination of the recent, highly-charged presidential nonenforcement of the law, but it nonetheless may have much to offer to the current debate.  In short, the Article suggests that the existing distinctions for analyzing nonenforcement may be insufficient, and that we should at the least integrate the lens of agency legitimacy into the analysis.

Posted by Howard Wasserman on November 26, 2014 at 09:01 AM in Law and Politics, Tax | Permalink


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