Challenges to Treasury Regulations: Chevron Deference in the Post-Mayo Era

• In Event: Treasury Regulations, Earnings Management & COSO

Abstract

Abstract: Judicial deference to Federal agency regulations has a long history of controversy. A conservative view is that courts should make all interpretations to prevent agencies from legislating by fiat. The other extreme is that agencies are best positioned to interpret and address inconsistencies and/or omissions in legislation. Guidance on the judiciary's deference to agency regulations is known as Chevron deference since the ruling in 1984. In the tax area, courts have often applied “weaker” (e.g. National Muffler and Skidmore) deference standards over the years and also applied different standards to interpretative regulations versus legislative regulations. The Mayo ruling (2011) brought tax-related court rulings fully under Chevron (effectively eliminating National Muffler standards for tax regulations). Mayo also suggested there should be no difference in deference rules for interpretative versus legislative regulations. Since then, three Federal circuit courts have applied Chevron to interpretative regulations, three other circuits have not. This paper traces the history and development of Chevron deference and speculates on the its future given the current Supreme Court make-up and legislative environment in Washington.

Author

• Richard Hull Fern, Eastern Kentucky University