Graev’s Long Shadow: Section 6751(b) and Supervisory Approval of Penalties

Today we welcome guest blogger Professor Monica Gianni. Professor Gianni serves as an Associate Professor in the Department of Accounting of the David Nazarian College of Business and Economics at California State University, Northridge. She is the successor author to Volume 6, Tax Practice and Procedure, of the Bittker & Lokken treatise on Federal Taxation of Income, Estate and Gifts and Of Counsel at Davis Wright Tremaine LLP. She wrote to me and asked if I could mention her article forthcoming in The Tax Lawyer – a publication of the ABA Tax Section.  I suggested that she might do a better job of describing her article than me and persuaded her to write a description herself.  She writes on the penalty litigation that has consumed the Court – and this blog – for the past few years.  Keith

As a reader of this blog, you have undoubtedly read numerous posts on Section 6751(b). Section 6751(b) requires supervisory approval in writing prior to assessment of certain penalties. Enacted in 1998 as part of the IRS Restructuring and Reform Act, the statute’s purpose was to prevent IRS agents from using penalties as bargaining chips. The section remained essentially dormant for over 20 years, with both the IRS and taxpayers accepting the position that approval needed to be obtained only prior to assessment. The trilogy of Graev cases and the decision of the Second Circuit Court of Appeals in Chai v. Commissioner changed the Section 6751(b) landscape completely, opening a Pandora’s box of taxpayers using Section 6751(b) to avoid penalties on the technicality of no-written-supervisory approval. Hundreds of court cases have followed, resulting in cases inconsistently interpreting Section 6751(b) and well-counseled taxpayers avoiding tax penalties.

I’ve written an article on this subject, which is due to be published in the next volume of The Tax Lawyer—Supervisory Approval of Penalties: The Opening of a Graev Pandora’s Box. The article tries to bring some order into the case law that has resulted from a badly drafted statute. (You can download the article here). After examining the current state of case law, the article concludes by recommending that the statute be repealed. Internal IRS procedures can address issues with the conduct of IRS employees while not opening the door to taxpayers using a technicality to avoid penalties and IRS employees potentially imposing penalties overbroadly in their attempts to comply with Section 6751(b). While others argue that repeal is not the answer, there seems to be agreement that something needs to be done. As Keith Fogg has pointed out, if the statute isn’t repealed, “maybe we will still be litigating Graev cases into the next decade helping to provide a never-ending source of blog posts.” 

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The bulk of the litigation on this section has addressed when supervisory approval must be given to comply with Section 6751(b). The Tax Court has taken an expansive interpretation of the statute in favor of taxpayers, generally requiring that supervisory approval be obtained prior to the first formal communication to the taxpayer advising that a penalty will be imposed. The Circuit Courts of Appeals have started to disagree with the Tax Court. The Ninth Circuit, in Laidlaw’s Harley Davidson Sales, Inc. v. Commissioner, held that approval is required at the earlier of the assessment of the penalty or before the supervisor “loses discretion whether to approve the penalty assessment.” More recently, the Eleventh Circuit in Kroner v. Commissioner and Carter v. Commissioner reversed the Tax Court, holding that approval is required only before the assessment of penalties.

Rather than examine those decisions one more time, this post looks at procedural requirements of supervisory approval that have resulted from numerous Tax Court decisions in actions brought by taxpayers for penalty relief based on inadequate supervisory approval. First, what is required of a supervisor to fulfill the penalty-approval requirement? The simple answer is nothing but the approval itself. No cross-examination of the supervisor by the taxpayer is required, no reasonable-cause defense by the taxpayer has to be presented first, and there is no requirement that the “thought process” of the supervisor be analyzed or that her review of the penalty have been “meaningful.” The supervisor does not have to consider the merits of the penalty determination, does not have to have real estate expertise for a valuation penalty, and can even approve a valuation penalty before receiving the appraisal report. As summarized in Belair Woods, LLC v. Commissioner, the penalty approval form itself does not have to “demonstrate the depth or comprehensiveness of the supervisor’s review.”

The next question is—how is approval shown? The approval, by the express language of the statute, must be in writing. That being said, an actual signature is not required, and approval can be shown by an electronic signature or even by e-mail. If the approval form, however, shows no date of approval or the date is illegible, the taxpayer will prevail under Section 6751(b). The reason for the penalty on the approval form must be the same as contained in the Notice of Deficiency, and the specific penalty must be listed and not just a general statement that penalties are approved.

A further question is—who is the supervisor that must approve the penalty? Section 6751(b) requires that the taxpayer’s “immediate supervisor” approve the penalty, and this connection must be shown on the approval form. “Immediate supervisor” is not defined in the statute, and there are no regulations under this section. When faced with the issue, the Tax Court in Sand Investment Co. v. Commissioner determined that such supervisor “is most logically viewed as the person who supervises the agent’s substantive work on an examination, even if the examiner’s direct supervisor is someone else.” The IRS considers an acting supervisor to be the agent’s immediate supervisor if he has an approved Designation to Act or a Notification of Personnel Action on file.

If a taxpayer wants to challenge a penalty in court based on lack of IRS supervisory approval, are there any limitations? A taxpayer cannot raise the Section 6751(b) issue for the first time on appeal when the issue could have been raised in the Tax Court. Nor can the issue be raised for the first time at the district court level if it was not raised in administrative proceedings. For a TEFRA partnership action, Section 6751(b) must be raised at the partnership level and is not a partner-level defense. And, if a taxpayer enters into a closing agreement agreeing to the assessment of penalties rather than going to court, he waives any subsequent Section 6751(b) challenge.

The above describes just some of the procedural rules that have developed from numerous court cases post-Graev. Although there is more certainty now than there was prior to these cases, different results for taxpayers can occur depending on which circuit has venue over any ensuing appeal. Whether the statute has succeeded in preventing penalties from being used as bargaining chips seems to have become an irrelevant consideration, as taxpayers have used the statute to escape often well-deserved penalties.

Information from Administrative Practice Programming at the May ABA Tax Section Meeting

At each ABA Tax Section meeting certain committees have programing that directly impacts tax procedure, and we try to cover those committees.  At the May meeting none of the regular bloggers attended the Administrative Practice Committee meeting – usually one of the critical committee meetings for tax procedure information – but Abbey Garber and Bibiana Cruz of Holland & Knight agreed to cover this meeting.  We welcome them as first time guest bloggers.  Abbey worked for Chief Counsel in the Dallas office for many years (where I first met him) before retiring and moving to the firm.  Bibiana is an associate in the firm’s Miami office. You can view the slides from the meeting here.

The discussion of the information coming from committee meetings serves as a good reminder that the next ABA Tax Section meeting is coming up next month in Dallas.  The preliminary program is here. You can register and get other information about the meeting here.  Keith

On May 13, 2022, as part of the ABA’s Tax Section Meeting in Washington D.C., the Administrative Practice Committee invited Holly Paz, IRS Deputy Commissioner of the Large, Business and International Division (LB&I), Scott Irick, IRS Director of Small Business / Self-Employed (SB/SE) Examination Division, Abbey Garber, Partner at Holland & Knight’s Tax Controversy and Litigation Group, and Henry Cheng, Associate at DLA Piper’s Tax Controversy and Litigation Group to discuss Exam’s return to office, innovations and challenges encountered during COVID, and what Exam is currently focusing on. Paige Braddy, from Skadden Arps, moderated the panel, titled IRS Exam –Reflections on Two Years of COVID.


The IRS has completed its return to office transition after more than two years of COVID. As of June 25th, normal in-person operations have resumed. However, the IRS continues to be flexible in certain aspects such as digital/photograph signatures for some purposes, which will be accepted until October 31, 2023. In addition, other innovative tools such as virtual reading rooms and video conferencing through Microsoft Teams are now being utilized. Also, the fax machine option is receiving an upgrade as some web-based upload tools are being introduced.

During the chat, the panelists discussed the new IRS Office of Chief Counsel Memorandum 20214101F which sets forth the requirements for a taxpayer to claim an I.R.C. Section 41 research credit refund on an amended return. In summary, these requirements include: (i) the identification of all the business components that relate to the claim, (ii) identification for each business component of the activities performed, the individuals who performed such activities and the information each individual sought to discover, and (iii) providing the total qualified employee wage expenses, supply expenses and contract research expenses. The memo also provides a 45-day period (increase from the prior 30-day period) to perfect a claim for refund prior to a final determination. According to the officials, at the moment, a low volume of submissions have been received, but they expect to evaluate the process further once sufficient number of claims come in.

The group also discussed the continuing validity of Rev. Rul. 94-69. Rev. Rul. 94-69 allows large corporate taxpayers who are under continuous audit to make affirmative disclosures at the start of the audit with the practical effect of informally “amending” a return without having to file all of the required paperwork. The IRS has published a new draft form (Form 15307, Post-Filing Disclosures for Specified Large Business Taxpayers) in an effort to standardize submissions. Although this process is still being examined, the idea is for certain large taxpayers to have a clear view of what information needs to be provided and that there is consistency among taxpayers as to the information being submitted. The IRS is evaluating whether the population of eligible taxpayers will be changed.

LB&I has made some changes related to the assertion of the Economic Substance Doctrine and related penalties. As of April 22, 2022, the level of approval required to assert the application of this doctrine and its related penalty has changed: executive approval is no longer required to raise this argument and to assert the economic substance penalties. This, however, does not remove the requirement that the penalties must be approved in writing by the immediate supervisor of the person who initially determines the penalty.

The application procedure to the Compliance Assurance Process (CAP) also has undergone some changes. These include: (i) for 2022 CAP years “two filed” open returns are permitted, (ii) audited financial statements in accordance with GAAP must be provided, and (iii) new applicants will be required to complete the Tax Control Framework Questionnaire. On September 15, 2022, the IRS announced the opening of the application period for the 2023 Compliance Assurance Process (CAP) program. The application period runs from September 15 to November 15, 2022.

Partnerships are being closely monitored by the IRS and audits under the new BBA centralized partnership audit regime are ongoing. According to the officials, the IRS is looking to increase its coverage by bringing in new resources and increasing agent training in partnership exams. The IRS officials cautioned that, regardless of taxpayers having elected out of the BBA, an audit could be underway.

The Fast Track Appeals Process is also under review. Fast Track, a voluntary mediation program and an option for most disputes at Exam, is an alternative process where a mediator seeks to facilitate settlement discussions making it a shorter, and more flexible and cost-effective process. According to the IRS, they are looking to improve Fast Track by increasing agent training and by using metrics to measure progress and identify areas for improvement.  

The IRS is aware of its challenges and taxpayers’ struggles in their communications with the agency. It is focused on tackling the long processing delays and improving taxpayers’ overall experience with the IRS. To make this happen, the IRS is looking to hire 400 new agents and increase training for existing ones. It is also updating its technology and communication platforms. Leadership changes also have occurred, with the recent announcement of Lia Colbert as Commissioner of SB/SE and Maha Williams as Acting Deputy Commissioner for SB/SE Exam.  Darren Guillot will continue to serve as Deputy Commissioner for Collection. They are hopeful that these changes, along with increased resources, have a positive outcome for taxpayers and practitioners.    

Out of Time? APA Challenges to Old Tax Guidance and the Six-Year Default Limitations Period

We welcome back previous guest blogger Susan C. Morse, who is the Angus G. Wynne Sr. Professor in Civil Jurisprudence and Associate Dean for Academic Affairs at the University of Texas at Austin School of Law.

Is it ever too late to raise an administrative procedure challenge to an old tax regulation?

Consider the pair of cases that has produced a circuit split between the Sixth and the Eleventh Circuits over the adequacy of notice-and-comment for a conservation easement final regulation. (Prior Procedurally Taxing coverage here and here.) The Sixth Circuit held in Oakbrook that the notice-and-comment process was sufficient. In contrast, the Eleventh Circuit concluded in Hewitt that Treasury “violated the Administrative Procedure Act’s requirements” when it promulgated the regulation and that therefore the IRS Commissioner’s application of the regulation was “invalid.” But neither court addressed the question of time. The regulation was promulgated in 1986 – decades before any of the facts arose in either case.

Does time ever limit taxpayers’ ability to raise administrative procedure challenges long after the promulgation of a regulation? Consider 28 U.S.C. § 2401(a), the default limitations period for suits against the federal government. It provides that “every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues.”

The limitations period analysis turns on when the “right of action” to raise an administrative procedure challenge to a regulation “first accrues.” For instance, in Oakbrook and Hewitt, if this right accrued in 1986, when Treasury promulgated the regulation at issue, then the taxpayers’ claims should have been time-barred. On this theory, the taxpayers were allowed to litigate because the government did not raise 28 U.S.C. § 2401(a) as a defense. (The government can waive the defense, as it’s not jurisdictional.) If the government had raised the six-year limitations period defense, the Oakbrook or Hewitt taxpayer would have had to argue that the right of action first accrued later, when the regulation was applied to the taxpayer’s case, or that an exception to the limitations period should apply.

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Now the government has begun to raise the six-year limitations period defense, first in July 2022, in the Govig case, pending in the federal district court in Arizona. Govig involves Notice 2007-83, which was issued nine years before penalties were first proposed on Govig for the 2016 tax year, relating to the employee welfare benefit arrangement established by the taxpayer in 2015. In Govig, the taxpayer claims that the Notice is invalid because it was issued without notice and comment, and relies on the Sixth Circuit’s decision in Mann Construction. In Mann Construction, though, the government did not raise the six-year limitations period defense.

More than half the Courts of Appeal – the Second, Fourth, Fifth, Sixth, Ninth, Eleventh, D.C., and Federal Circuits – have accepted that for administrative procedure claims, the default six-year limitations period begins to run when the challenged regulation or guidance issues, in other words at the time of final agency action. This limitations period statute exists against the background of sovereign immunity, meaning that it is an exercise of Congressional power to specify on what terms the federal government may be sued. In contrast, for certain other claims, such as claims that the agency exceeded its statutory authority, the limitations period begins to run when the regulation or guidance is applied. This is called the Wind River doctrine after a key 1991 Ninth Circuit case. The Wind River doctrine would say that the limitations period for an administrative procedure challenge to Notice 2007-83 began to run in 2007 and expired in 2013, before any relevant facts arose in the Govig case.

It may seem an awkward reading to suggest that a “right of action first accrues” with the earlier issuance of a Notice, especially when the specific controversy between the taxpayer and the government arises from later enforcement proceedings. And yet that is what the cases hold. As an example, consider Sai Kwan Wong, a 2009 Second Circuit case where the plaintiff sought to challenge a Medicaid rule that treated social security disability income as an amount that offsets Medicaid funding of nursing home care, even if that income was deposited into a special needs trust. The Department of Health and Human Services had promulgated a rule providing this offset treatment in 1980, apparently without using notice and comment. The plaintiff did not have standing until 2006, when his legal guardian began to direct the plaintiff’s disability income to a special needs trust, thus raising the question of whether the offset rule would apply. The Second Circuit held that the six-year limitation period began to run in 1980, when the guidance issued, and not in 2006, when the plaintiff had standing. It then barred the plaintiff’s administrative procedure claim.

The theory that underpins cases like Sai Kwan Wong is articulated in Shiny Rock, a 1990 Ninth Circuit case that preceded Wind River by one year. There, the court explained that any injury “was that incurred by all persons .. in 1964” when the Bureau of Land Management issued a public land order – not in 1979, when Bureau applied the order to deny the plaintiff’s mineral patent application. The Shiny Rock court suggests that the rights that are vindicated by an administrative procedure challenge are the general public rights to participate in the administrative procedure process. A later-accrual approach, added the Shiny Rock court, “would virtually nullify the statute of limitations,” since it would always be possible for the old administrative order to applied later, to a new plaintiff who had later gained standing. Viewed this way, the case law consensus that the limitations period begins to accrue when a regulation is promulgated makes sense.

An alternative reading of 28 U.S.C. § 2401(a) might be that a particular plaintiff’s right of action cannot accrue until the plaintiff has standing. This reading is grounded in a private law understanding of the statutory provision, which envisions the government as party to a contract or tort action that arises from a specific transaction or interaction between the government and a plaintiff. But administrative procedure violations are not like these private law causes of action. They arise not from a specific interaction between government and plaintiff, but rather from the alleged failure of a process that is supposed to serve the general public function of producing better administrative law.

Thus, in Govig, if the District of Arizona follows Ninth Circuit precedent, it should conclude that the administrative procedure challenge to Notice 2007-83 is time-barred – unless, of course, the Govig plaintiffs can persuade the court that an exception to the limitations period applies. There is little in the facts of Govig that would support an equitable tolling or equitable estoppel argument. For instance, the government did not hide information or delay enforcement in order to wait out the limitations period. Instead, the facts of the case did not arise until after the limitations period had expired.

An issue that may arise in Govig relates to intervening case law. This is because the Govig plaintiff arguably relies on CIC Services, a 2021 Supreme Court case that held that some facial or pre-enforcement challenges are permitted in tax, despite the Anti-Injunction Act. (Prior Procedurally Taxing coverage here, here, and here).Historically, intervening case law has restarted the 28 U.S.C. § 2401(a) limitations period when a case has only prospective effect – but not if the case has (as is typical) retroactive effect. Plus, more recent Supreme Court precedent emphasizes that its applications of federal law “must be given full retroactive effect …as to all events, regardless of whether such events predate or postdate the announcement of the rule.” The intervening case law argument seems unlikely to offer the Govig plaintiff an exception to the time limitation of 28 U.S.C. § 2401(a).

The Govig case is one to watch. If the Arizona federal district court follows prevailing case law, it will likely allow the government’s limitations period defense and time bar the plaintiff’s administrative procedure claim. The availability of such time bars would reshape the landscape of administrative procedure in tax by putting APA claims on the clock and replacing the assumption that the government will waive the 28 U.S.C. § 2401(a) limitations period defense.

For further reading, if of interest: I have posted a preliminary draft here with additional analysis of this limitations period issue.

Will the Commissioner agree that a filing extension is necessary so that all eligible children can claim the enhanced Child Tax Credit?

We welcome guest bloggers Luz Arevalo and Angela Divaris from Greater Boston Legal Services. GBLS is part of a coalition of nonprofit organizations who seek to maximize access to the expanded child tax credit for 2021. Angela and Luz highlight the problem of otherwise-eligible CTC claimants without a US taxpayer identification number who did not file an ITIN application or an extension of the filing deadline by April 18, 2022. Under IRC 24(e)(2), those families will miss out on the credit if nothing is done.

PT has covered barriers to receiving ITINs in several prior posts including last summer when ITIN delays and the cumbersome requirement to paper-file applications were highlighted in the NTA’s 2022 objectives report to Congress. Back in 2016, Patrick Thomas and Lany Villalobos wrote about the impact of the PATH Act and other ITIN issues described in the NTA’s 2015 annual report to Congress.

A related issue recently surfaced which I found interesting as it implicates several different administrative problems facing the IRS. In 2020 and 2021, the IRS encouraged people with expiring ITINs to renew early, separately (and before) filing their tax return to avoid refund delays. This well-intentioned message had unintended consequences, recently revealed in the NTA’s 2023 objectives report to Congress.


The NTA explains that even if an individual submitted an ITIN renewal application well in advance before filing their tax return, due to processing backlogs the IRS computer system may have disallowed the CTC on the return via math error. Many people do not contest a math error notice (for various reasons), and the IRS does not always abate math error changes upon request although it is legally obliged to do so. Frustratingly, the IRS does not automatically restore the disallowed tax benefits when the ITIN unit catches up and restores the taxpayer’s ITIN. One wonders what “the right to a fair and just tax system” means if IRS processing delays can result in permanent disallowance of tax benefits intended to help children in a pandemic. TAS’s 2023 systemic advocacy objective number 13 is to restore tax benefits that were disallowed due to ITIN renewal processing delays.

Interestingly, the NTA notes that as of January 1, 2022 ITIN holders can no longer renew “in advance” – they must submit their renewal application with their tax return. I am not sure this is the best solution to the problem since it requires those families to suffer the refund delays that advance renewals were intended to prevent. Fixing the IRS computer systems to prevent the issuance of math error notices when an ITIN application is pending would seem a more taxpayer-friendly solution. Sadly, IT-based solutions are easier said than done when it comes to the IRS.


Timing is everything.  For many immigrant taxpayers, the time to claim the enhanced Child Tax Credit and the Recovery Rebate Credit ran out on April 18, 2022.  As of this writing, however, we believe that the Service is considering several requests to extend the filing deadline for those immigrant families who did not apply for their taxpayer identification numbers before the filing deadline. 

Section 205 of the 2015 PATH Act requires that a tax filer have been issued a taxpayer identification number or have requested a filing extension before the tax-filing due date (and be issued a TIN by the extended filing deadline) in order to claim a child tax credit.  Many thousands of mixed status households who faced severe obstacles obtaining ITINs or who received their Social Security numbers after the April filing due date are, thus, now tragically prevented from claiming the enhanced Child Tax Credit for their children, most of whom are U.S. citizens, who are otherwise eligible if they had social security numbers.  These immigrant families faced severe pandemic related challenges to filing exacerbated by widespread misinformation regarding their eligibility.

Over 100 organizations signed a letter asking Commissioner Rettig and Secretary Yellen to extend the filing deadline for these households based on the emergency declaration prompted by the COVID-19 pandemic (as authorized by IRC 7508A) and in order to fulfill the legislative intent of the American Rescue Plan Act (ARPA).  Similar requests were made by 7 senators and 28 mayors. The Commissioner has the authority to extend filing deadlines in response to emergency declarations, and the COVID-19 declaration should be considered as grounds to support a one-time filing extension to allow families to claim a one-time emergency benefit.

The 2021 tax year was a critically important one for American families.  The American Rescue Plan Act (ARPA), which was drafted in response to COVID-19 pandemic, directed the IRS to distribute relief funds to the vast majority of families in the country.  Its historic Child Tax Credit expansion has been hailed as a life-line with the potential to slash childhood poverty in the country to its lowest level on record.  There were obvious obstacles in the distribution of the credit to the lowest income households who exist outside the tax system, and especially those in mixed status families.  The IRS recognized that eligibility would not translate into actual access for as many as 2.3 million children.   These low-income households – the ones most needing the refundable credits- were the hardest to reach and became the objects of outreach from the White House down to community groups working on the ground.  It was an impossible task to complete during filing season.  Many of these children who predictably fell through the cracks had a parent who faced the added burden of obtaining an Individual Taxpayer Identification Number (ITIN) and are now out of time.  The equitable administration of ARPA will be served if all the children contemplated continue to enjoy the same access to this historic relief in a time of crisis.

Should this deadline be extended, there will be a need for advocates to reach these deserving children by participating in targeted outreach and filing assistance.

Filing a Notice of Federal Tax Lien For Personal Property

Today PT contributor Bob Probasco brings us a recent case that demonstrates the value of verifying that the IRS followed proper procedures in filing a Notice of Federal Tax Lien.

A recent decision by a bankruptcy court, In re: Vanessa Catherine Stephenson, (docket no. 21-22684 in the Western District of Tennessee), is a reminder of potential pitfalls for the IRS when filing a notice of federal tax lien (NFTL).  The IRS identified part of its claim as secured by the debtor’s personal property, based on an NFTL filed on August 21, 2018.  The debtor/taxpayer objected, arguing that the entire claim was unsecured because the NFTL was not filed properly and did not attach.  The court identified this as issue of first impression.  After two hearings and additional briefing, the court agreed with the debtor.  The NFTL was filed in the wrong county and therefore not effective/invalid.  The entire IRS claim was unsecured.



Ms. Stephenson moved around the country a lot during 2016 – 2018: Longmont, Colorado; Fort Mills, South Carolina; Keeling, Virginia; Semora, North Carolina; and finally Shelby County, Tennessee, where she resided when the NFTL was filed.  However, she filed her 2017 tax return using her mother’s address, in Benton County, Tennessee.  She also used that address for employment purposes and as a result received W-2s showing that address.  The IRS, using the information it had, filed the NFTL in Benton County rather than Shelby County.

Where to file an NFTL

Section 6323(f)(1) specifies that an NFTL is to be filed in the appropriate office of the state (or county or other subdivision), as designated by the state, where the property is situated.  Where is the property situated?  Section 6323(f)(2) specifies that as the physical location (for real property) or the taxpayer’s residence at the time the lien is filed (for personal property). 

Corwin Consultants, Inc. v. Interpublic Group of Cos., 512 F.2d 605 (2d Cir. 1975) pointed out that prior to the Federal Tax Lien Act of 1966, there was “some dispute as to where personal property, both tangible and intangible, was situated” but in most cases intangibles were located at the taxpayer’s domicile.  For section 6232(f)(2), the drafters deliberately chose residence instead of domicile “because of the difficulty in determining a person’s domicile, based as it is on (among other things) his state of mind” (quoting the legislative history).  The district court in Corwin decided that the debtor/taxpayer’s residence could not be determined but treated the NFTL as valid because of due diligence and substantial compliance by the IRS. 

The Second Circuit rejected that decision as premature and remanded for the district court to try again to determine the facts.  It acknowledged that might not be obvious, because residence “when used in a sense other than domicile, is one of the most nebulous terms in the legal dictionary.”  It also noted the importance of other creditors receiving notice as to possible claims by the IRS.

In light of this purpose, the residence of a delinquent taxpayer is a question of fact to be determined by various criteria: Among them are the taxpayer’s physical presence as an inhabitant and not a mere transient; the permanence of that presence; the reason for his presence; and the existence of other residences.  In general, for this statute, where a taxpayer resides is where he dwells for a significant amount of time and where creditors would be most likely to look for him.  What proportion of time is “significant” is not capable of exact definition and must be determined on a case by case basis, at all times keeping the purpose of the filing requirement in mind.

One of the judges on the Corwin panel concurred with remanding to the district court but disagreed with the burden of proof (or reasonable effort/due diligence) that should be placed on the government.  He would have construed section 6323(f)(2)(B)

to mean that, where the government cannot through reasonable inquiry ascertain a taxpayer’s actual residence, it may satisfy the statute’s requirement by filing notice of its judgment lien with the state-designated office within the jurisdiction of the taxpayer’s last known or verifiable abode.  This practical construction seems to me to be in accord with the purpose of the statute, which is to put other creditors on notice, since they too would be most likely to inquire about liens in the county of the last residence of the taxpayer that could be ascertained by reasonable effort.

It would not be enough, though, to rely on the last address shown on IRS tax records, which can’t readily be determined by other creditors.  Additional effort would be required to determine the “last publicly known address of a taxpayer.”  The concurring opinion did not go into further detail.

Compare to notices of deficiency

Even the standard set forth in the Corwin concurring opinion is more challenging that the IRS requirement for mailing a notice of deficiency.  Section 6212(b)(1) specifies that the notice of deficiency for income taxes, with limited exceptions, be sent to the “last known address.”  Absent clear and concise notification by the taxpayer, courts allow the IRS to use the address on the taxpayer’s most recently filed tax return.  (For the definition of “last known address” and how taxpayers can provide the clear and concise notification, refer to Regulation § 301.6212-2 and Rev. Proc. 2010-16.  It’s also worth revisiting Audrey Patten’s PT post on the Gregory case.)

Courts generally impose an obligation to do more only if the IRS becomes aware of an address change prior to mailing the notice.  For example, if the notice itself is returned by the Post Office, the IRS may try to find a different address – but the Tax Court will not require the IRS to do that.  Tucker v. Commissioner, T.C. Memo 1989-408 has a good summary of caselaw on this.  It also describes a few practices the IRS may use to find a different address: rechecking IRS records, checking with credit rating agencies, and checking with the Post Office for a forwarding address.

It is reasonable to treat notices of deficiency and NFTLs differently in terms of how much effort is required from the IRS.  The “last known address” rule for notices of deficiency protects only the taxpayer.  If the taxpayer has not notified the IRS of a new address, or taken steps to have mail forwarded, it’s only the taxpayer injured by that inaction.  The “residence” rule for NFTLs is primarily aimed at protecting other creditors.  They don’t have access to IRS records, to know where the IRS might have filed an NFTL and would be disadvantaged if they don’t realize the IRS is likely to, and can, file elsewhere.

Back to the Stephenson case

The IRS argued that it should be entitled to use the mother’s address for the NFTL because Ms. Stephenson had “held out” that as her home address on tax returns and W-2.  The court rejected that argument because it  found “no binding legal support that the IRS was entitled to use the address Ms. Stephenson held out as her home address as the place Ms. Stephenson resided when it was not in fact the address where she physically resided.”  It cited another bankruptcy case, affirmed by the Eleventh Circuit, that rejected the “last known address” interpretation because it would “read . . . additional language into the statute.”  (It also referred to the concurring opinion in Corwin.)  Based on the testimony at trial, Ms. Stephenson did not reside in Benton County when the NFTL was filed there.  The NFTL was invalid and the entire IRS claim was unsecured. 

Even if this was a “case of first impression,” I think the opinion is consistent with most practitioners’ understanding or interpretation of the statute.  It creates problems for the IRS, for example, when the taxpayer has moved but not yet filed a tax return.  This case points out another example, when the taxpayer doesn’t use her actual residence for her tax returns.  That may not be common, but it certainly happens.  Whether it’s worth additional IRS effort to identify the taxpayer’s actual residence before filing the NFTL, or it’s better to just lose occasional bankruptcy disputes over priority, is another question.

The process is intended to provide notice to parties who subsequently provide the taxpayer credit (or purchase real property).  If such parties wouldn’t be able to find the NFTL through a lien search, the IRS should not be given a place in the line ahead of those parties.  Courts generally won’t apply a strict compliance standard.  They focus on whether a purchaser or subsequent creditor could have found the lien, even with some errors in the lien filing, through reasonable care and diligence during a search.  Here’s an example: U.S. v. Z Investment Properties, LLC, 921 F.3d 696 (7th Cir. 2019).

The “residence” rule generally does a good job of protecting other creditors; at least the lien will be reported in the proper county.  However, it’s not perfect.  Even if the IRS has the right address initially, that won’t help later creditors after the taxpayer has moved.  Filing the NFTL in the county where the taxpayer resides at the time means it will attach to the personal property even after she moves.  But other creditors in the new location would have no warning that they needed to check lien registries in previous places the taxpayer lives.  That’s not the only problem with notice of a lien, but it’s a significant one.  Keith’s proposal of a national tax lien registry seems a much better solution for both the IRS and other creditors.

Creativity Is Not Always Rewarded

In June, the Tax Court issued a division opinion in Chavis v. Commissioner, 158 T.C. No. 8, a Collection Due Process case.  The taxpayer, proceeding pro se, raised three arguments.  I’m going to put them in a different order than the Court did, saving the best for last.  First, she sought to challenge the underlying liability.  The IRS argued and the court agreed that she had a prior opportunity to dispute it, even if she hadn’t taken advantage of it.  Under the current status of the law, that result was anticipated, although many of us wish that either the IRS or Congress would change that. 

Second, she requested “currently not collectible” status and withdrawal of the notice of federal tax lien.  Given that the Settlement Officer disagreed and that the abuse of discretion standard applied, you already can guess how that was decided.

Finally, she raised a different – and creative! – argument concerning why she shouldn’t have to pay.  My guess is that this argument is why the Court issued a division opinion instead of a memorandum opinion; it’s also why I chose to write this post.  I’m not sure that argument would have ever occurred to me or that I would have raised it if it had occurred to me.  I’m also not surprised that the argument lost; it was certainly a long shot.



Ms. Chavis and her former husband worked, as the Secretary and President respectively, at Oasys Information Systems, Inc., a C corporation.  The business address for Oasys was Ms. Chavis’s home address.  Oasys withheld payroll taxes from employees’ wages but never paid the taxes over to the government.  The amount was substantial enough that the IRS pursued trust fund recovery penalties under section 6672 against both Ms. Chavis and her former husband.  The IRS issued Letter 1153 Notice of Trust Fund Recovery Penalty to both Ms. Chavis and her then-husband on July 13, 2015, proposing to assess $146,682 against each of them.

The Letter 1153 informs responsible parties that they can appeal to the local Appeals Office within 60 days and provides detailed instructions on how to do that.  Ms. Chavis did not appeal.  On November 16, 2015, the IRS assessed.  She and her husband divorced in 2016 and the IRS apparently collected some of that amount from the husband.  The IRS filed a notice of federal tax lien on May 29, 2019 and issued Ms. Chavis a collection notice stating her right to a CDP hearing.  She timely requested a hearing and, when Appeals ruled against her, filed a Tax Court petition.

The first two (my order) arguments

These were the easiest for the Court to dispose of. The decision that Ms. Chavis could not challenge the underlying liability was expected.  For assessable penalties, an opportunity to dispute the liability at Appeals is treated as sufficient.  Judicial review in a pre-payment forum – Tax Court – is not required.  The IRS and the Court consider that a settled issue, unfortunately, for assessable penalties, including the TFRP.  If you’d like a refresher on why that’s a bad result, start with a couple of posts (here and here) by Keith.  Ms. Chavis had that opportunity to go to Appeals; she acknowledged receiving the Letter 1153 and signed the return receipt.  So the court didn’t consider this argument.

Similarly, the collection alternatives that Ms. Chavis suggested – CNC status and withdrawal of the NFTL – were rejected by the Settlement Officer and the Court easily concluded that the rejection was not an abuse of discretion.  The SO found that she could pay $1,685 per month toward the liability.  Ms. Chavis argued that the calculation of $1,685 per month available income was “unreasonable and not economically feasible.”  As the Court noted:

In determining this figure, the SO calculated allowable monthly expenses by reference to local standards prevailing in the Missouri county where petitioner resided. . . . The SO was authorized to rely on those standards in assessing petitioner’s ability to pay, and it was her burden to justify a departure from the local standards. . . . Petitioner has not satisfied that burden.

However, it appears that the real issue may have been assets rather than income.  The SO had disallowed home mortgage expenses of $1,611 because Ms. Chavis had not proved that she had no equity in the home.  See IRM “An account should not be reported as CNC if the taxpayer has income or equity in assets, and enforced collection of the income or assets would not cause hardship.”  Ms. Chavis argued that she did not have “access” to any equity, but she hadn’t submitted evidence during the CDP hearing.  She lived in Missouri, so the court’s review was limited to the administrative record per Robinette v. Commissioner, 439 F.3d 455 (8th Cir. 2006).

The request to withdraw the NFTL also failed.  The Court reviewed the conditions under which a withdrawal is authorized, in section 6323(j), and concluded that all but one either clearly did not apply or had not been asserted by Ms. Chavis.  For that final condition – that withdrawal would facilitate the collection of the tax liability – Ms. Chavis had not presented any evidence in the CDP hearing.


Those arguments didn’t prevail but Ms. Chavis had one more up her sleeve.  You’ve probably guessed even if you didn’t read the opinion.  She was married at the time the TFRP was assessed.  Both she and her then-husband were liable for the entire amount.  What does that suggest?  Relief from joint and several liability under section 6015!

Ms. Chavis checked the box for innocent spouse relief, among others, on her request for a CDP hearing on May 29, 2019.  In July 2019, she submitted Form 8857 to the Cincinnati Centralized Innocent Spouse Operation.  CCISO told her within a few weeks that she did not qualify for section 6015 relief, but Ms. Chavis still argued for it (unsuccessfully) during the CDP hearing.  It’s not clear whether she also argued for it in her response to the government’s motion for summary judgment.

As noted above, the Court rejected the challenge to the underlying liability because Ms. Chavis had a prior opportunity to dispute it.  An innocent spouse claim is a defense against, rather than challenge to, the underlying liability and therefore is not precluded under section 6330(c)(2)(B) from review as part of the CDP hearing. 

As the court pointed out, subsections (b) and (c) of section 6015 both reference the taxpayer filing a joint return (i.e., income tax) and provide for relief for an understatement or deficiency with respect to that return.  Because the deficiency in this case arose from TFRP for the corporation’s payroll taxes, subsections (b) and (c) would not apply.  However, subsection (f) does not include such a reference to a joint return. 

This may remind you of the situation several years ago with respect to the statute of limitations for innocent spouse claims under subsection (f).  The Code provided a two-year statute of limitations for subsection (b) and (c) claims but did not specify a statute of limitations for (f) claims.  So, the IRS and Treasury issued a regulation to establish a two-year statute of limitations for (f) cases as well.  The Tax Court ruled that regulation was invalid, interpreting the “audible silence” by Congress as an indication there should be no statute of limitations for (f) cases.  Despite success in appeals to Circuit Courts, the IRS backed down and decided to limit (f) claims only by the ten-year statute of limitations for collection in section 6502.  The Taxpayer First Act later established, at section 6015(f)(2), a statute of limitations: if unpaid, before the section 6502 collection statute of limitations expires, or if paid, before the section 6511 refund claim statute of limitations expires.  It still doesn’t say anything about income tax or joint return in subsection (f). 

Would the Tax Court refuse to import the “income tax only” provisions in (b) and (c) to (f)?  Unfortunately for Ms. Chavis, the answer was no.  The Court concluded easily that 6015(f) applies only to income tax.  The caption for section 6015 is “Relief from joint and several liability on joint return.”  Captions don’t always carry a lot of weight, but there was much, much more:

The Commissioner has specified, in Rev. Proc. 2013-34, 2013-43 I.R.B. 397, the procedures governing equitable relief. These procedures confirm that subsection (f), like subsections (b) and (c), applies only to joint income tax liabilities. See Rev. Proc. 2013-34, § 1.01, 2013-43 I.R.B. at 397 (“This revenue procedure provides guidance for a taxpayer seeking equitable relief from income tax liability. . . .”). Indeed, the IRS will not consider a taxpayer’s request for equitable relief unless she meets seven “threshold conditions,” one of which is that the “income tax liability from which the requesting spouse seeks relief” is attributable to the non-requesting spouse. Id. § 4.01(7), 2013-43 I.R.B. at 399. Another condition is that “[t]he requesting spouse [must have] filed a joint return for the taxable year” for which relief is sought. Id. § 4.01(1).

There is more than just a Revenue Procedure:

Although a TFRP liability is a form of “unpaid tax,” section 6015(f) applies only to unpaid taxes or deficiencies arising from joint income tax returns. See Treas. Reg. § 1.6015-1(a)(1)(iii) (stating that section 6015(f) applies only to “joint and several liability for Federal income tax”); H.R. Rep. No. 105-599, at 254 (1998) (Conf. Rep.), reprinted in 1998-3 C.B. 747, 1008 (stating that section 6015(f) applies only to “any unpaid tax or deficiency arising from a joint return”).

That seems very persuasive support for the conclusion that section 6015 relief is not available for the TFRP.  Since section 6672 is an assessable penalty not subject to deficiency procedures, there is no judicial review of the validity of the penalty in Tax Court at all.  Although this seems very clear, apparently it had never been decided by the court, which might explain why this was a division opinion instead of a memorandum opinion.  Ms. Chavis seems to be the first one to ever argue in Tax Court for innocent spouse relief from the TFRP.

TFRP is also a divisible tax, so at least the Flora rule is not as much of a hurdle to judicial review, and there’s a right of contribution in section 6672(d).  However, it’s still a nasty penalty and difficult to challenge once you don’t head it off at the interview stage.

Standard/scope of review – CDP versus innocent spouse

The opinion states the standard of review for CDP cases as follows:

Where the validity of the taxpayer’s underlying liability is properly at issue, we review the IRS’s determination de novo.  Goza v. Commissioner, 114 T.C. 176, 181-82 (2000). Where the taxpayer’s underlying liability is not properly at issue, we review the IRS’s decision for abuse of discretion only. Id. at 182.

That comes pretty much straight from the legislative history of the IRS Restructuring and Reform Act of 1998, which enacted the CDP hearing process of section 6330.

The court previously considered stand-alone innocent spouse cases under section 6015(e) de novo for both the standard of review and the scope of review.  Porter v. Commissioner, 132 T.C. 203 (2009).  The Taxpayer First Act of 2019 specified both the standard of review (de novo) and the scope of review (limited to the administrative record plus “any additional newly discovered or previously unavailable evidence”) in new section 6015(e)(7).  The Chavis petition was filed on September 23, 2020, after the effective date of section 6015(e)(7).  For more on the complexities of TFA and innocent spouse relief, start with Christine’s posts here and here.

So, we have two different standards/scopes of review – for CDP and for stand-alone innocent spouse cases.  Which applies when dealing with an innocent spouse claim in a CDP hearing? standard and scope of  It doesn’t matter for this case; although the court included the discussion under a section labeled “Abuse of Discretion,” it also noted in footnote 2:

We need not decide whether the SO’s resolution of petitioner’s spousal defense challenge should be reviewed de novo rather than for abuse of discretion. We would decide this issue the same way under either standard because (as explained in the text) it presents a purely legal question.

It does matter, though, when taxpayers have an innocent spouse claim with respect to income taxes in a CDP case. 

A quick check of Effectively Representing Your Client Before the IRS turned up Francel v. Commissioner, T.C. Memo 2019-35, which had already addressed this same scenario.  The taxpayer in that case filed a request for innocent spouse relief before receiving the final notice of intent to levy.  The request for a CDP hearing asked for innocent spouse relief.   The court concluded that it had jurisdiction with respect to the innocent spouse issue under both section 6330(d)(1) and section 6015(e).  The IRS argued that the standard of review should be abuse of discretion and the scope of review should be limited to the administrative record.  (Dr. Francel lived in Missouri, as did Ms. Chavis, so the Eighth Circuit’s decision in Robinette applied.).  The court concluded that both the standard of review and the scope of review would be de novo because the petition was (in part) a petition under section 6015(e)(1).  

Francel was decided (a) before the Taxpayer First Act, which restricted the scope of review in innocent spouse cases, and (b) in one of the three circuits that restrict the scope of review to the administrative record in a CDP case.  After the Taxpayer First Act, and in one of the other circuits, it’s possible to have a situation in which:

  • The standard of review is more favorable to the taxpayer under section 6015(e) – de novo – rather than under section 6330(d)(1) – abuse of discretion.
  • The scope of review is more favorable to the taxpayer under section 6330(d)(1) – de novo – than under section 6015(e) – limited evidence beyond the administrative record.

In a situation like that, how should the court evaluate the standard and scope of review?  All or nothing, whether section 6330(d)(1) or section 6015(e)?  Or mix-and-match, with the most favorable to the taxpayer for both standard of review (section 6015(e)) and scope of review (section 6330(d)(1))?

Footnote 2 in the Chavis case, quoted above, avoids deciding which standard and scope of review would apply in these situations.  It didn’t matter for Ms. Chavis’s situation.  Now that we have the Taxpayer First Act, will the court want to re-visit this question in a future case where the decision on the merits is not a purely legal question?

Proposed Firearm Safety Deduction Legislation:  At What Procedural Cost?

Lots of legislators lean on the tax code to address issues that seem unrelated or only loosely connected to the main functions of a modern tax system. In this guest post, longtime PT reader Kenneth H. Ryesky offers his views on legislation proposing a new above the line deduction for certain expenses associated with gun ownership. Ken is an expatriate American currently based in Israel, where he formerly was a Senior Advisor at the U.S. Tax Desk of the EY Tel Aviv office. Les


The three basic functions of taxation are to (1) fund the government; (2) implement monetary policy; and (3) encourage or discourage particular behaviors by the populace. 

The Firearm Training and Proficiency Act (H.R.7973), introduced in the House of Representatives and referred to the Ways and Means Committee 7 June 2022, unabashedly falls into the latter category; the Bill’s sole function is to amend the Internal Revenue Code to allow “an above-the-line deduction for the purchase of gun safes, gun safety devices, and gun safety courses.”


Of taxation, Ricardo noted that “[i]t frequently operates very differently from the intention of the legislature, by its indirect effects.”  H.R. 7973 is now postured to spawn many such indirect effects.  This posting, while taking no position on the current public discourse regarding gun violence and the Second Amendment, critiques how H.R. 7973 could implicate the IRS’s interactions with taxpayers and the IRS’s own internal procedures if the legislation were to be enacted in its current original text. 

Overview of the proposed Legislation:

The bill provides for three tweaks to the Internal Revenue Code.  Firstly, it redesignates the current I.R.C. § 224 as I.R.C. § 225; secondly, it inserts a new I.R.C. § 224 to authorize the aforementioned deductions; and thirdly, it adds a new subparagraph I.R.C. § 62(a)(22) to facilitate the deduction from gross income set forth in the new Section 224.

The redesignation of an Internal Revenue Code section can pose complications to legal research and to judges who decide cases where the renumbered Code section or subsection is relevant [see, e.g., Freytag v. Commissioner, 89 T.C. 849 (1987), aff’d 904 F.2d 1011, aff’d 501 U.S. 868 (1991).]; this can implicate tax issues even where the redesignated statute is in a Title other than the Internal Revenue Code [see, e.g.,
Wallace v. Commissioner, 128 T.C. 132 (2007)].

Here, the potential legal research obstacles are minimal because the current Section 224 which would be renumbered as a new Section 225 is not a substantive statute, but a “cross reference” section that specifically notes the renumbering of the relevant sections of Subchapter B; the proposed legislation specifically updates the cross references as appropriate.

Another redesignation issue comes to mind from my days with the IRS more than 30 years ago, when the ink-on-paper legal resources were the norm.  The IRS’s paucity of funding (of which Treasury Secretary Janet Yellen complained to Congress the very same day H.R. 7973 was introduced) was operative even back then, when the budgets were insufficient to timely procure enough of the semiannual CCH Code and Regulation volumes for everyone, so many of us made do with older sets that had been cast off by  senior colleagues who were fortunate enough to be issued editions of more recent vintage.  There were instances where redesignations were relevant to some case in someone’s caseload.  The possibility is real that one or more relevant IRS employees will not receive the appropriate updates if the legislation is enacted.  Analogous to the IRS’s failure to keep its employees current with statutory changes is the IRS’s past failure to update its own regulations to reflect statutory changes, thereby causing confusion and misinformation to the American public at large [see, e.g., Taibo v. Commissioner, T.C. Memo. 2004-196.].

The deductions:

The bill would provide two separate deductions, each limited to $250 in any taxable year, and each available even if the taxpayer has not otherwise chosen to itemize deductions.

 The first deduction, in the proposed new I.R.C. § 224(a)(1), is the amount paid for “any secure gun storage or safety device.”

The second deduction in the proposed new I.R.C. § 224(a)(2), is

… the amount paid by the taxpayer during the taxable year for a concealed carry firearms course or a firearm safety course which—

            (A) is taught by a firearms instructor certified by the State to teach such course, or

            (B) satisfies the training requirement, if any, for any license or permit related to a firearm (including a hunting license) which is issued under the authority of State law.

The use of the word “State” (spelled with a majuscule “S”) in the textual language of the second deduction limits those who can benefit from the deduction to United States residents.  By way of disclosure, this excludes me, inasmuch as I am currently based abroad in Israel, which has no equivalent of the Second Amendment and which strictly regulates possession of firearms, issuing permits only to people who reside in certain areas and/or engage in certain occupations (e.g., military, law enforcement officers, tour guides, the diamond industry, etc.).  In order to comply with the law here, it was necessary for my own firearms and ammunition to be included in the extensive downsizing my wife and I did in preparation for our relocation.

There are U.S. citizens here (including a former client from my Long Island law practice) who legally carry firearms.  After jumping through all of the hoops of the qualification and licensure procedure, they must store their guns in secure safes when not actively carrying them, and, just as my wife and I must take continuing education courses to maintain our respective professional credentials, the gun owners must take periodic approved training courses to maintain their carry licenses.

If, as the press release by the sponsors of H.R.7973 insists, the legislative intent behind the bill is “to promote gun training and safety,” then many expatriate Americans here and elsewhere who eventually will return to the United States would be excluded from that noble and worthy goal by the word “State” in the text of the proposed legislation.

The data stewardship mandates of H.R.7973:

The proposed new I.R.C. § 224(d) would interpose many obstacles to the IRS in both its interactions with the taxpayers and its orderly internal processes.  The proposed subsection begins:


            (1) PROHIBITION ON COLLECTION OF INFORMATION REGARDING FIREARMS.—No taxpayer shall be required, as a condition of any deduction allowed under this section, to provide any information with respect to any firearms owned by the taxpayer.

            (2) LIMITATION ON RECORD RETENTION AND DISCLOSURE.—No official, employee, agent, contractor, or person otherwise acting on behalf of the Government may—

                         (A) keep any record relating to the deduction allowed under this section for any taxable year after the close of the 3-year period beginning with the date on which the return of tax for such taxable year was filed, or

                        (B) transfer any such record to a third party without the express written permission of the taxpayer.

Firstly, the term “any information with respect to any firearms owned by the taxpayer” [emphasis supplied] is subject to broad construction, and arguably extends well beyond even the sweepingly diffuse I.R.C. § 6103(b)(2) definition of “return information.”

As written by the pen of Arthur Conan Doyle’s famous Sherlock Holmes character, “From a drop of water, a logician could infer the possibility of an Atlantic or a Niagara.”  Similarly, from a taxpayers claim of a Section 224(a) deduction, one can infer the possession of a firearm, and indeed, from the purchase receipt document for a firearm safety device can often be inferred information about the firearm.  In one of the Estate Tax cases I had while serving with the IRS (the particulars of which are not appropriate for discussion here), the decedent’s checkbooks included entries such as payment to the local police department for a “carry license,” subscriptions to firearms enthusiast publications, and NRA membership; from those items, I was able to infer a collection of firearms worth a few thousand dollars that was unreported on the Estate Tax Return.

The IRS agent auditing a return would obviously be severely hobbled in examining any Section 224 deduction claim.

The I.R.C. § 224(d)(2)(A) prohibition against the IRS “keep[ing] any record relating to the deduction” would be all the more vexing to the IRS bureaucracy.  In my IRS days, we were instructed to never remove a staple from a tax return (or if staple removal was necessary, to write an explanatory memo to the file and preferably have one or more witnesses to the removal process), lest questions arise as to whether the tax return being offered in evidence at trial is the same tax return that was filed by the taxpayer.  The flip side of an organization’s document retention policy is effectively a document destruction policy, and proposed I.R.C. § 224(d)(2)(A) effectively mandates the IRS to destroy records in connection with a taxpayer’s Section 224 deduction claim.

Here, rhetorical questions abound:  How would the IRS comply with this destruction mandate?  Would some GS-½ wield an Exacto knife to excise, page by page, the verbiage relating to the deduction from the paper tax return document?  Would the verbiage be crossed out with a black felt-tip marker (an IRS redaction mode that has proven ineffective in the past)?  Wouldn’t the general tendencies of all bureaucracies to travel the past of least resistance lead the IRS to simply discard or destroy the entire file once the retention period expires?

And what about “the 3-year period beginning with the date on which the return of tax … was filed?”  The I.R.C. § 6501(a) general 3-year statute of limitations for the IRS to assess a tax has exceptions, most notably the 6-year “substantial omissions” provision in I.R.C. § 6501(e).  In light of the previously propounded possibilities, would the IRS’s document destruction policies effectively serve to render it unable to assess taxes on such returns after the three-year deadline has passed, even if the Section 224 deduction were not at issue?  And what of any return that is in fact filed before the due date, considering that the I.R.C. § 6501(b)(1) provision deeming an early-filed return as filed on the latest timely filing date applies only to assessments, and not to the mandated record destruction date of the proposed new I.R.C. § 224?

Getting back to my own Estate Tax specialty, the Estate Tax return due date is nine months following date of death, and frequently extended another six months when timely requested.  One item on the Estate Tax examiner’s punch list is to request copies of the decedent’s final three years’ personal income tax returns.  If any of these returns were initially filed more than three years before the examination date, would the Estate Tax examiner’s mere possession of them not be contrary to the Section 224 document destruction mandate of “any record relating to the deduction” (it being noted that in the context of an Estate Tax return, it is possible to determine the identity of the decedent’s heirs, and therefore, have a lead as to the whereabouts of the decedent’s firearms)?  Ditto for insurance policies.

Moreover, some states, including New York, do not allow the same state deductions as the federal income tax does.  The fact that a federal Section 224 deduction is being backed out in order to compute the state income tax can effectively disclose information to the state authorities, who would not be be bound by the new Section 224 nondisclosure and document destruction rules.  And speaking of New York State, might the people from whom the sponsors of H.R.7973 apparently intend to bar access to the firearms information be able to do an end run around the restrictions by requesting the information from the New York State tax authorities or other state offices?  And might the IRS itself attempt an end run around the new Section 224 provisions by invoking the I.R.C. § 6001 recordkeeping requirement?

Other provisions of H.R.7973:

The bill also creates a private right for persons to obtain damages and injunctive relief for IRS violations of the firearms information collection and/or the recordkeeping provisions of the new Section 224.  Jurisdiction is specifically conferred to the Federal District courts, and sovereign immunity is explicitly waived. Increased litigation can be expected if these provisions become law.


As of this writing, H.R.7973 is now a proposed statutory amendment to the Internal Revenue Code; it is impossible at this time to predict whether it will or will not ultimately become law.  This posting focuses on the potential for procedural agitation the current version of H.R.7973 would trigger if enacted into law.  The committee assignments of the three initial sponsors of the legislation range from Health, Armed Services, and Trade to Labor, Environment, and Climate; none of the initial sponsors seem to have any appreciable background in taxation, and the text of the bill strongly suggests that it was drafted by one or more persons whose forte is other than taxation.  It would seem unlikely that the proposed legislation would entail as many potential “indirect effects” had it been sponsored by Michele Bachmann, a former IRS attorney who served in Congress from 2007 to 2015.

The More Things Change The More They Remain The Same

Today’s post is the last in the three-part series from Professor Bryan Camp addressing how to classify tax regulations under the APA. In today’s post, Bryan considers whether current tax administration involves social policies and non revenue raising functions more so today than the past. He concludes by offering observations on two recent cases, Oakbrook Land Holdings v Commissioner and Rogerson v Commissioner. Les

To recap: we are concerned with the question of how must Treasury regulations be promulgated to be in conformity with the APA.  All agencies must conform to the APA.  No one doubts that.  The discussion is about the proper relationship—or fit—of Treasury Regulations to the APA.  Jack Townsend posted his views that the APA does not require most Treasury regulations to be issued through the notice and comment process because they are interpretive regulations and not legislative regulations.  Kristin Hickman posted her views that ALL Treasury Regulations are legislative.  And she says her views are the new orthodoxy. 

But if hers is the new orthodoxy, there are still heretics.  I’m one.  I agree with Jack that most Treasury Regulations are properly classified as interpretive regulations.


In my last post I attempted to show how everyone in the 1940’s and 1950’s believed most Treasury Regulations were interpretive.  Kristin properly responds with a “so what.”  Times change and Kristin pushes the idea that the function of tax administration has transformed from revenue raising to social policy implementation.  She’s not the only one.  I encourage readers to check out these two great articles:  Susannah Camic Tahk, Everything is Tax: Evaluating the Structural Transformation of U.S. Policymaking, 50 Harv. J. Legislative 67 (2013); Linda Sugin, The Great and Mighty Tax Law: How the Roberts Court has Reduced Constitutional Scrutiny of Taxes and Tax Expenditures, 78 Brooklyn L. Rev. 777 (2103).

So today’s post is to take a look at the claim that tax administration has changed sufficiently to change how we classify Treasury Regulations.  Big caveat here: it also may be that other changes in the law or in society now make it appropriate to classify Treasury Regulations as legislative and not interpretive.  I’m not going there today. 

Much of the recent scholarship on how tax administration has changed focuses on various transfer programs—notably the Earned Income Tax Credit (EITC) and the Affordable Care Act (ACA). Some commentators have suggested that the social welfare function served by the EITC should trigger a reformed due process analysis for tax administration.  I really like this article by Megan Newman, Low-Income Tax Gap: The Hybrid Nature of the Earned Income Tax Credit Leads to its Exclusion from Due Process Protection, 64 Tax Lawyer 719 (Spring 2011).  And Les keeps telling me that tax issues for Low Income Taxpayers are really issues about subsidies.   He gives a great presentation of these views in his article Nina Olson: A Champion for Taxpayer-Centered Tax Administration, 18 Pitt. Tax Rev. 117 (2020).  Surely it seems that the IRS is now tasked with jobs would be foreign to those living in the 1940’s and 1950’s.

I agree with much of that.  The basic idea is that much of the tax laws serve non-revenue raising functions.  That necessarily means that what are ostensibly tax regulations may serve those functions as well, including poverty relief, etc.  I get that.  What I am skeptical about are claims that tax administration today involves social policies more than it did at or before enactment of the APA.  Remember, that’s our inquiry: has tax administration changed such that tax regulations today are doing something qualitatively different than they did in the 1940’s and 1950’s when everyone agreed with Professor Davis that “the great bulk of Treasury Regulations under the tax laws clearly are interpretative rules, not legislative rules….”  Davis, Administrative Law Text (1959) at p. 87. 

I have three reasons to doubt claims that tax administration today involves social policies more than it has in the past. 

First, I don’t even know the baseline.  How do you measure the extent to which tax laws are “oriented” towards or away from revenue collection?  In her “Administering The Tax System We Have” article, Kristin made a good stab at it.  She tried to quantify by studying tax regulations over a three year period.  She created a fairly elaborate coding system and concluded that a substantial % of tax regulations were “oriented away” from revenue raising.  One of several difficulties with that project was that she had no historical baseline.  So while she could draw some (debatable) conclusions about the current allocation of administrative efforts between “revenue-raising” and “social policy” implementation, she could draw no historical conclusions. 

Second, it is not clear whether this recent tax scholarship reflects real change or just a change in awareness among tax academics.  Collecting taxes has always been intimately bound up with social policy.  Scholars in other disciplines have known this for forever.  Economics know this.  Check out Joseph Schumpeter’s 1918 classic “The Crisis of the Tax State”, an extended (and rather hyperbolic) examination of the relationship between taxation and social economy.  Historians know this.  See, Isaac William Martin, Ajay K. Mehrotra, and Moica Prasad, The New Fiscal Sociology:  Taxation in Comparative and Historical Perspective (Cambridge University Press 2009), collecting essays from many historians.  No free link to the book, but you can check out my review of it in the Am. Journal of Legal History.  In particular, historians of slavery know this.  See e.g. Robin Einhorn, American Taxation, American Slavery (U. Chicago Press, 2006).  Political Scientists know this. See, e.g. Julian E. Zelizer, Taxing America:  Wilbur Mills, Congress, and the State, 1945-1975 (Cambridge University Press 1998).  Folks, that’s just pulling off the top of my head from stuff I’ve actually read.  I’m sure a little digging will reveal much more.

Third, while I agree that the objects of Congressional solicitude have expanded (EITC, ACA premium credits, clean energy tax credits), I am skeptical that this represents a fundamental shift in the use of the tax laws.  I think it rather represents a shift in which social policies get put in the tax laws.  History gives us many examples of how Congress has used the taxing power for purposes other than revenue raising.  I think a few examples from this history shows the difficulty in arguing that tax administration is now, in any relevant sense, more “oriented away” from revenue raising than it was before the APA. 

We tend to think that because historical actors had simpler technology they also had simpler minds.  They did not.  They just did not have the internet.  Throughout history there have always been really strong non-revenue raising policies embedded in tax provisions, and folks have always been acutely aware of the non-revenue effects of tax laws. 

Let’s take a look.  

Start with Formation of the Republic.  The first use of tax law to further a social policy and not raise revenue is right there in Article 1, Section 2, Clause 3 of the U.S. Constitution.  It’s the great compromise:  in exchange for allowing enslaved persons to be counted for representation purposes, the Constitution also created a tax break: “direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons.”  That’s a tax law. And it was about must more than revenue raising!  It was about embedding slavery into the new American republic.

Not everyone bought into the compromise.  Some Southerners opposed it because they feared Congress would use taxation to achieve abolition.  Since enslaved persons were property, abolitionists would use the federal power to impose “a grievous and enormous tax on it, so as to compel owners to emancipate their slaves rather than pay the tax.”  That’s from the formerly sainted Patrick Henry, as quoted in Robin Einhorn, American Taxation, American Slavery (U. Chicago Press, 2006). at 181.  Others disagreed with Henry’s analysis, but the very robustness of the debate demonstrates the awareness in the 1780’s of how tax systems are used for non-revenue purposes.

Move to the early republic.  Understand that before 1862 the federal government’s revenue came almost entirely from tariffsHistorical Statistics of the United States, 1789-1945, Table Series P 89-98 (“Federal Government Finances”), pp. 295-298.  Ok.  Do YOU want to argue that tariff legislation did not have a significant non-revenue function?  I thought not.  But if you really think that tariffs were even mostly about revenue raising, I recommend you read this commentary from one of the leading tariff lawyers of his day:  William McKinley, The Tariff in the Days of Henry Clay and Since: An Exhaustive Review of Our Tariff Legislation from 1812 to 1896 (Henry Clay Publishing Co., 1896).  He’ll set you straight.  And the title is not misleading.  It’s an exhaustive read.  While we might today ignore tariffs because they account for so little of the federal government’s revenue, remember again that in the mid-1800’s, tariffs were pretty much the entire funding mechanism. 

And yet it was during this very time—mid 1800’s, when tax administration was chiefly focused on tariff administration—that courts created the doctrines regarding both issuance and authority of tax guidance that lawyers in the 1940’s believed to be in harmony with the commands of the APA.  That’s in my History of Tax Regulations article.

Move to the Civil War.  Few would argue that the Revenue Act of 1862 was anything other than a revenue raiser.  Yet even there Congress wrestled with social policy, in the form of what  tax breaks to give various classes of taxpayers.  That’s what we call “tax expenditures” today.  For example, shortly after Congress enacted the very first income duty in 1862, folks pointed out that the failure to tax owner-occupied housing constituted a tax subsidy that discriminated against renters.  There was back and forth on this issue for several years.  Congress even created a special Commission to study the problem.  But Congress refused to tax the imputed income of self-owned property, for policy reasons.  In fact, Congress explicitly excluded the rental value of self-owned homes from gross income but, to equalize, permitted a deduction for house-renters of their house-rents. Revenue Act of 1864, 13 Stat. 223, 281 (§117).  When the income tax was reinstated in 1913, Congress dropped the house-rent deduction (but kept the imputed income exclusion), over the objection of then Senator (and future Justice) Sutherland, who protested this discrimination against house renters. See Seidman’s Legislative History at 992-993.

Move to 1913.  Let’s talk charities.  When it revived the income tax in 1913, Congress had social policy reasons for exempting certain organizations if they were organized “exclusively” for various purposes, including religious, charitable, scientific, or educational purposes, so long as “no part of the net income of which inures to the benefit of any private stockholder or individual.” 38 Stat. 114, 172. 

Whatever you believe the social policy for tax exempt organizations to be—and Professor Atkinson gives a thorough review of many of them in his article Theories of the Federal Income Tax Exemption for Charities:  Thesis, Antithesis, and Syntheses, 27 Stetson L. Rev. 395 (1997)—the policy is in considerable tension with the revenue function of tax, even if the JCT (for reasons I do not understand) does not include this exclusion in its yearly list of tax expenditures.

The BIR was left to grapple with drawing the social policy lines in the 1910’s and 1920’s, long before the APA.  For example, would income derived from unrelated business activities be subject to tax if it was used entirely for an organization’s exempt purpose?  The BIR said yes; the Supreme Court said no. Trinidad v. Sagrada Orden de Predicadores de la Prvincia del Santisimo Rosario de Filipinas, 263 U.S. 578 (1924). What about a company formed to provide employment to members of a certain labor union, all of whose the profits went to the labor union?  Was its income exempt?  The BIR said no.  And here’s a funny thing:  that position was embedded in sub-Treasury guidance and never challenged.  Legislative rule?  Interpretive rule?  The original decision was in Office Decision (O.D.) 523, 2 C.B. 211 (1920).  The position was re-affirmed by Rev. Rul. 69-386, 1969-2 C. B, 123, and up until the TE/GE “scandal” was found in IRM 05-21-2014)(“Nonqualifying Activities”). I don’t know where it is now. 

But What About the EITC?  It is commonly believed that Congress created the EITC in 1975.  See, e.g. Dorothy Brown, The Tax Treatment Of Children: Separate But Unequal, 54 Emory L. J. 757, 766 (2004).  Not quite.  It is more accurate to say that Congress revived the EITC in 1975.  The EITC first appeared in §206 of the Revenue Act of 1924 in the form of a tax credit equal to 25% of earned income. The credit continued until 1932 when it was demoted to a deduction.  This smaller relief eventually died in 1944, succumbing to the revenue demands of WWII, the expansion of the class tax to a mass tax, and the creation of the standard deduction.  

The social policy behind the 1924 EITC was similar to that of the 1975 EITC and was equally in tension with revenue-raising.  Actually, it appears more in tension with revenue raising.  Both policies were intended to “orient” the law towards promoting social justice and “orient away” from revenue raising.  But guess what, folks.  Concepts of social justice change.  The current EITC is viewed as being in lieu of welfare payments to the poor, the idea being that this netting mechanism is more efficient than having one hand of the government paying out benefits while the other hand collects taxes.  The 1924 EITC had a similar social policy but directed at a different class of taxpayers: wealthy wage earners who had the same income as those whose income was due to returns from capital.  And why did Congress view that as social justice?  Why because those wage-earners needed help to save for their retirement in a way that those who were able to generate income from capital did not need.  And since those earning income from captial had gotten a HUGE tax subsidy starting in 1921, wage earning accounts, lawyers, and doctors believed they were getting shafted.  Equalizing those classes of taxpayers involved a potentially larger hit to revenue than shifting welfare payments to the poor into the tax laws.  The legislative history contains back-and-forth debates in Congress over the extent to which revenue needs outweighed the social policy, and vice versa.  You can find the grody details in Bryan Camp, Franklin Roosevelt and the Forgotten History of the Earned Income Tax Credit, 20 Green Bag 2d. 337 (2017).

My Bottom Line: Certainly tax administration has changed since enactment of the APA.  But the changes that are perhaps most relevant to administrative law are procedural changes, not a reorientation of the tax system or a re-balancing of revenue and non-revenue functions.  That is, while I am skeptical that the tax system created by Congress has changed in ways that create a different relationship with the APA, I am concerned that the tax system administered by the Service has changed, and dramatically.  As I spell out in excruciating detail elsewhere, tax administration is now driven by computer and computer coding. Bryan T. Camp, Theory and Practice in Tax Administration, 29 Va. Tax Rev. 227 (2009). This debate about “legislative” and “interpretive” regulations is less important, I think, than recognizing that agency rules encoded in computers have a “force of law” in a much more immediate and real-world way than do the issuance of tax regulations.  Just ask anyone whose electronic filing is rejected!  But I don’t hear Kristin or anyone demanding that every computer coding change go through notice and comment process!  I think these changes create a need to rethink conceptions of due process, but leave that discussion to a different time and place.

Concluding Thoughts: The Weird Results If All Regs Are Legislative

Kristin’s views are definitely trending and becoming the new orthodoxy. In fact, you are likely committing malpractice if you are not mounting a procedural attack on any and all administrative guidance adverse to your client!  

But some weirdness is starting to appear.  Go read Judge Guy’s concurrence in Oakbrook.  Then go read Judge Toro’s recent opinion in Rogerson v. Commissioner, T.C. Memo 2022-49 (May 12, 2022).  Or just keep reading my scribbles here.

The issue in Oakbrook was whether the taxpayer was entitled to a massive deduction for a conservation easement.  The statute requires that a conservation purpose must be guaranteed in perpetuity. §170(h)(5)(A).  Treasury has issued a regulation saying that to meet the perpetuity requirement easement agreements must provide for a particular distribution of proceeds if unexpected events require the later sale of the property subject to the easement. Treas. Reg. 1.170A-14(g)(6)(ii).  The IRS did not think the Oakbrook easement met the statutory perpetuity requirement because it did not meet the regulatory requirement.

Channeling Kristin’s views of tax regulations, the taxpayer argued that the regulation was invalid because Treasury had not properly promulgated it.  The government said “no, we issued the regulation properly.” Two of the judges in Oakbrook agreed with the government and found that Oakbrook did not comply with this validly issued regulation, splitting with the 11th Circuit.

Judge Guy, however, took a different approach.  He agreed with the taxpayer that the Treasury Regulation was improperly issued and so was invalid.  In fact, he recites the Myth of Mayo by using it to justify, without explanation, his sub-silentio conclusion that the proceeds regulation was a legislative regulation.  Here’s what he says, using the money quote from Mayo:

“The Department of the Treasury must play by the same rules as other federal agencies. The Supreme Court made that clear when it refused to carve out an approach to administrative review good for tax law only and expressly recognized the importance of maintaining a uniform approach to judicial review of administrative action.”  (internal quotes omitted)

I hope you see the myth there.  The battle in Oakbrook was not a battle about what deference to give the regulation; it was about whether the regulation was validly issued.  A void regulation gets no deference because there’s just no there there, just empty space where a regulation might have been.  So who cares what Mayo says about deference?  Kristin is correct that courts do not appear to care whether Treasury regulations are or are not subject to notice and comment requirements.  Everyone in this case assumed the regulation was legislative.  

But was it?  Judge Guy’s concurrence undercuts that assumption.  After finding the regulation void he then went on to say that the taxpayer loses.  He still thought that the easement agreement did not satisfy the perpetuity requirement.  Why?  Well, gosh, he interprets the statute to reach that conclusion!  He applies traditional tools of statutory interpretation to decide what the word “perpetuity” means and then finds that Oakbrook’s easement agreement did not satisfy his judicial interpretation of what “perpetuity” requires. 

Hmmm.  So let me get this straight: when Judge Guy does it we call it “interpretation.”  But a Treasury Regulation doing the same thing is not an interpretive regulation?  It’s a legislative regulation?  That makes no sense to me. 

Rogerson presents a similar scenario.  There, the taxpayer had a bunch of losses from a yacht leasing activity in 2014, 2015, and 2016.  They were passive losses and, as readers know, that meant he could only take them against gains from passive activities.  Thus says §469(a).  It just so happened that he reported a bunch of gains from ownership in three S corporations in those years, all of which he reported as passive activities.  The trouble was, for the nine years prior to 2014, he had reported his involvement in the predecessor corporation as active. 

The issue in the case was whether Mr. Rogerson materially participated in the S corps in the three years at issue.  The statute is notoriously unhelpful here, saying only that a taxpayer’s participation in an activity is active when the taxpayer “materially participates” in the activity.  The statute then says a “taxpayer shall be treated as materially participating in an activity only if the taxpayer is involved in the operations of the activity on a basis which is—(A) regular, (B) continuous, and (C) substantial.” §469(h)(1).  Ok.  Sure.  But what do those words mean?  How are we to interpret those words?  Well, there are regulations for that. 

The applicable regulations say that a taxpayer can satisfy the statutory requirement if they meet any one of seven tests laid out in the regulation.  One of the tests is that the taxpayer has materially participated in the activity for five of the ten years before the year in question.  Temp. Treas. Reg. § 1.469-5T(a)(5). 

Yep.  It’s one of those Temp. regs from long, long ago that was grandfathered when Congress revised §7805 to limit Temp regs to three years.  This one is from 1988.  To complicate matters, Treasury issued associated regulations after that and then modified them with the result, says Judge Toro, that “today, the five of ten test appears in a temporary regulation, while the rule explaining how the five of ten test should be applied appears in a final regulation.”  Op. at 18.

Flourishing the exceptionalism myth, the taxpayer’s attorney attacked the Temp. Reg., trying to avoid having his material participation in prior years count against him in the years at issue.  If the taxpayer could get that nasty regulation voided, then it would appear the taxpayer would be home free. 

Not so fast.  It is true that Judge Toro thought the regulation was valid and applied it.  Bummer for Mr. Rogerson.  But then Judge Toro adds an analysis much like Judge Guy’s concurrence in Oakbrook; he looks at whether Mr. Rogerson’s activities were material participation within the meaning of the statute, disregarding the regulations. 

“To summarize, Mr. Rogerson would not prevail even if he were correct about the procedural validity of the five of ten test, because we find that he was regularly, continuously, and substantially involved in the operations of RAEG during 2014, 2015, and 2016 within the meaning of section 469(h). Accordingly, we need not decide whether the five of ten test is procedurally valid and turn instead to Mr. Rogerson’s final argument.”  Op. at 27.

Hmmm.  So let me get this straight: if you maintain (as Kristin does) that the Treasury Regulation creating the five in ten rule was a “legislative” action and not an “interpretive” action, then is not Judge Toro also engaging in a “legislative” action?  Just like Judge Guy?  Contrariwise, if you say Judge Toro was engaging in mere “interpretive” actions, then how is a Treasury Regulation that does the same thing any different?  How is it not an interpretive action as well? 

There are several answers to that. Kristin’s answer, of course, is the Myth of Mayo: Mayo transformed ALL Treasury regulations into legislative rules because they now carry the mythic “force of law.”  Treasury would agree that this regulation was a legislative one, but for a different reason: the regulation was not issued under the general authority in §7805 but was instead issued under specific authority given Treasury to “specify what constitutes…material participation…for purposes of this section.” § 469(l)(1). 

To me neither are satisfactory answers.   Both are form-over-substance reductions.  Kristin’s answer that “force of law” makes a rule legislative is not only reductionist but also circular.  It obliterates the APA distinction, despite her protestations (she writes “The fact that Treasury regulations do not qualify as interpretative rules does not mean that no agency pronouncements qualify as interpretative rules; plenty of agency pronouncements, including by the IRS, fall under the interpretative rule category for APA purposes. Just not Treasury regulations.”).  Treasury’s answer used to make some sense but has become disconnected from substance over time as Congress randomly authorizes regulations in specific statutes when the general authority would suffice.  In Rogerson, for example, Treasury did not need specific authority to interpret the statutory test for material participation.  Ya got three statutory words: regular, substantial, continuous.  What those words mean is an interpretive task, whether done by a single judge or by the Treasury Department.

I think there’s a better way to distinguish “interpretive” from “legislative” rules.  It involves looking at each agency, and evaluating what the agency action is attempting to do in relation to its organic statute.  It’s an agency-by-agency determination, not some unified field theory of administrative law.  The APA is not a hammer.  But I promised Les I’d keep this under 4,000 words and I’m already over that, so I must leave those thoughts for another day.