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Florida Tax Review

Abstract

This article highlights how, in light of the increasing role that the IRS plays in the lives of individuals with fewer resources, the IRS will increasingly have to go beyond the mechanism of formal APA notice and comment, a mechanism that the IRS has not consistently used, and one which the IRS has claimed does not apply as a legal matter to much of its rulemaking functions at any rate. Part II of this article briefly introduces the context in which the IRS conducts its rulemaking activities. Part III discusses the APA notice-and-comment regime generally, and more specifically focuses on the Treasury and the IRS's rulemaking practices. While other scholars have taken direct aim at the shaky legal pedigree of the IRS's "tax-exceptional" approach to the notice-and-comment regime,44 commentators generally have overlooked the problems associated with lower-income taxpayers' lack of voice in the rulemaking process. To remedy that shortfall, in Part IV of this article, I call for changes in agency conduct to encourage public participation in formulating rules. Finally, in Part V, I build upon a model proposed by administrative law scholars who have suggested legislative reform to the APA and in agency practice to place greater responsibility on administrative agencies to gather input from regulatedparties.45 I argue that the IRS, when confronted with the need to formulate rules that are likely to impact the lives of disadvantaged or low-income taxpayers, should, to the extent feasible, affirmatively seek out the input of taxpayers, consumer groups, and other experts that would allow the IRS to harness the collective wisdom of its increasingly diverse constituency. I suggest broader agency initiatives in seeking views of those regulated, including the use of social networks, and outreach to nontraditional groups affected by IRS actions. In addition, I argue for a greater willingness of the IRS to put its rules through traditional APA notice-and-comment rulemaking. When its guidance relates to disadvantaged or lower-income taxpayers, however, barriers exist that limit or prevent meaningful involvement, making traditional notice-and-comment rulemaking insufficient. I therefore argue that the IRS should foster a collaborative relationship between itself and those whom it regulates, especially those who may be at the margins of society.

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