A New Paradigm for IRS Guidance : Ensuring Input and Enhancing Participation

This article highlights how, in light of the increasing role that the IRS plays in the lives of poorer and marginalized individuals, when promulgating rules, the IRS will have to go beyond the mechanism of the APA notice and comment regime to ensure robust public participation. While others have discussed the IRS's approach to the notice and comment regime, commentators generally have overlooked the problems associated with lower income taxpayers' lack of voice in the rulemaking process. To remedy that shortfall, I call for changes in agency conduct to encourage public participation in formulating rules. I build upon a model proposed by administrative law scholars who have suggested legislative reform to the APA and changes in agency practice to place greater responsibility on administrative agencies to gather input from regulated parties. 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 expert intermediaries. The article builds on scholars who have considered the role that proxies can play to help address pluralistic imbalances and considers the possible role that two key institutional actors, the Taxpayer Advocate Service (TAS) and low income taxpayer clinics, can play in the IRS's rulemaking function. My proposed expansion of the role of TAS and clinics would allow the IRS to harness the collective wisdom of its increasingly diverse constituency and enhance the legitimacy of the rules it promulgates