Document Type
Article
Publication Date
1-8-2015
Subject Category
Law
Abstract
This Essay seeks to demonstrate that the interpretive use of standards in applying provisions of the Internal Revenue Code is not inconsistent with the rule of law. Part I discusses the relationship between rules and the rule of law and explains why we think so many tax scholars are drawn to a view of the tax law as consisting primarily of rules. We then demonstrate that the definition of income is properly understood as a standard. Part II addresses the descriptive dimension of this claim, summarizing and expanding our previous discussion of the definition of income to determine whether the term is susceptible to construction as a rule. We show that even a brief trip through some of the litigation required to determine whether certain items are income leads to the conclusion that the definition of income is not a rule. Part III addresses the normative dimension of our claim. There, we tease out the functions served by interpreting income as a standard and question where the interpretive authority lies with respect to the Code in order to argue that income ought to be treated as a standard. Part IV turns to several examples of what Professor Lawrence Zelenak regards as either a “disregard” or an “underenforcement” of the law to clarify our understanding of interpretation. We then conclude by observing that the Code does not “read itself”: Deciding whether a provision is itself a rule or a standard is itself an act of interpretation. Moreover, interpreting a provision as a standard is fully consistent with the rule of law.
Recommended Citation
Alice G. Abreu & Richard K. Greenstein, The Rule of Law as a Law of Standards: Interpreting the Internal Revenue Code, 64 Duke Law Journal Online 53-94 (2015)