Tax Law Nonenforcement

Abstract

Executive nonenforcement of the law is a hot-button issue. An important question that has surfaced in the debate about such nonenforcement is whether categorical, or complete, prospective nonenforcement of the law is legitimate. A variety of scholars and commentators have suggested that it is not. This Article contests such claims by applying theories of agency legitimacy to the realities of IRS nonenforcement of the tax law. Doing so reveals that, in some circumstances, categorical nonenforcement may actually increase the legitimacy of the IRS’s nonenforcement. Categorical nonenforcement can serve as a particularly salient means of communicating nonenforcement decisions, which may lead to greater political accountability, increasing the legitimacy of nonenforcement under the political accountability theory of agency legitimacy. Also owing to its ability to make enforcement decisions particularly salient, categorical nonenforcement may yield greater public deliberation, increasing the legitimacy of nonenforcement under the civic republican theory of agency legitimacy. Categorical nonenforcement also can serve as a practical (though perhaps not legally enforceable) means for high-level officials to commit the agency to a policy of nonenforcement, which may increase the legitimacy of nonenforcement under the nonarbitrariness theory of agency legitimacy. Categorical nonenforcement, of course, may not always be legitimacy enhancing, nor does this Article attempt to claim that it is. Rather, this Article fundamentally claims that viewing nonenforcement through the lens of agency legitimacy may help apply core values of democratic governance, which are obscured or missed by the existing analyses, to agencies’ inevitable, systematic nonenforcement of the law.