Lily Ting Hsu
89 Geo. Wash. L. Rev. 1333
Caselaw demonstrates that Article III courts are unwilling to entertain claims brought by third parties that challenge Internal Revenue Service (“IRS”) and Department of the Treasury (“Treasury”) rulings for impermissibly favoring some taxpayers over others. In this Essay, I propose an Article I body that would enable private third parties to challenge Treasury and IRS regulations that favor competitors outside of an Article III court in an adversarial proceeding, resulting in declaratory, nonbinding advisory opinions. To illustrate the need for such a body, I consider one question raised by the 2017 Tax Cuts and Jobs Act in which the harm created by a favorable ruling to a competitor is clear—the meaning of “qualified trade or business” under section 199A. I then examine how such a body might work by turning to the model of the Government Accountability Office, which serves as an alternative to Article III courts for rulings on government contract bid protests. I argue that Congress should make the proposed body available to both competitors who suffer the traditional competitor injury that is recognized in areas outside of taxation and the Joint Committee on Taxation, which has a special interest in the proper implementation of the tax laws. Finally, I consider the benefits of an Article I body to issue declaratory advisory opinions on tax regulations.
