Wednesday, February 1, 2023
morse presents APA Challenges to Old Tax Guidance and Default Six-Year Limitation Period today in the northwest
susie morse (Texas; Academic google) presents Out of Time: APA Challenges to Old Tax Guidance and the Six-Year Default Limits Period at Northwestern today as part of his Colloquium Advanced Topics in Taxation Submitted by Gregg Polsky:
Old records should not be indefinitely subject to challenge in administrative proceedings. Instead, we should leave them alone. The consensus opinion of case law applying the six-year statute of limitations under 28 USC § 2401(a) accrued upon enactment strikes the right balance between precision and reassurance. It correctly reflects that all the elements of the claim of the administrative procedure are in force at the time of the alleged error, when the regulation was promulgated. When, as in the case of taxes, claims can be delayed through no fault of any party, the solution is to make appropriate administrative and equitable adjustments.
The conundrum presented by administrative procedure challenges to old rules is equivalent to a classic tension in the law: the balance between precision and repose. The conundrum is resolved by the default six-year statute of limitations under 28 USC § 2401(a), which, according to a consensus of case law, begins to run when the agency’s final regulatory action for administrative proceeding claims is taken. Taxation provides a good text for this argument because it is a slightly more difficult case, due to the fact that most opportunities to bring claims in administrative proceedings arise not as face challenges, but in enforcement cases, either deficiency or refund, where the pre-litigation tax procedure may be lengthy.
However, refund cases, while requiring advance payment of taxes to file a claim, present times that are largely within the control of the taxpayer.
The law should not keep the statute of limitations open indefinitely. To do so would ignore the fact that all the elements of the administrative procedure claim exist at the time of the alleged administrative procedure error, for example, when a regulation is promulgated. The plaintiff for whom the claim “grows first” should be encouraged to file the claim. The correct solution is to accumulate the six-year statute of limitations when a regulation is enacted and temper it with appropriate adjustments, for example, through administrative restraint and under the equitable and equitable doctrines.
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