Interpreting Statutory Silence

Like fences, the statutes in subtitle F of the Tax Code define the operational area in which the IRS administers the tax laws. Statutory words - like pickets - place important boundaries on IRS action. Statutory silence - the spaces surrounding the words - can be just as important to understand the boundaries. As with any other aspect of language, meaning comes from both what is said and what is not said. This article examines a dispute over the meaning of the spousal relief provisions in §6015 where the silence is particularly disquieting. The problem is this: while there is a statutory two year limitation period for taxpayers to seek spousal relief under §6015(b) or §6015(c), the statute contains no such limitation period for those seeking section 6015(f) relief. Only silence surrounds section 6015(f). The IRS has taken that silence and, in Treas.Reg. 1.6015-5(b)(1), used it to construct an immovable 2 year limitation period that the IRS applies against any person seeking section 6015(f) relief. In Lantz v. Comm'r, the Tax Court said the regulation was invalid. The Seventh Circuit Court of Appeals reversed the Tax Court, but whether one believes the opinion is right or wrong, it will not settle the issue. Part A of the article reviews the statutory context of §6015(f). Part B present the facts of Lantz and contrasts the majority and dissenting Tax Court opinions. Part C explains why the Tax Court was right to overrule the IRS interpretation of section 6015. It explains how this case illustrates why Chevron does not provide a helpful analytical structure for questions about who bears what responsibility for interpreting Tax Code administrative provisions. Finally, Part D explains why the Seventh Circuit opinion is not only wrong on the merits but misses an important administrative law point. At bottom, the IRS's attempt to appropriate this statutory silence to suit its (admittedly legitimate) administrative needs should not be allowed. More importantly, the Tax Court, as a specialized court centered on one agency, deserves the kind of deference normally given to agencies when it comes to interpreting statutory silence