The Future of Tax Regulations After Loper Bright

Do you have questions about tax policy in the 2024 election? Submit your questions here.

Steve Rosenthal of the Urban-Brookings Tax Policy Center and Don Susswein of RSM discuss how Congress should handle agency delegation following the Loper Bright decision. 

For more from Rosenthal and Susswein, read the following:

• Congress Can Maintain IRS Rulemaking Authority
• What About Vague ‘Delegated’ Tax Regulations?

For additional coverage, read the following articles in Tax Notes:

• DOJ, FedEx Contest Loper Bright’s Effect in Offset Earnings Case
• Loper Bright Casts Doubt on SECA Guidance Plan, Tax Pros Say

Follow us on X:

• David Stewart: @TaxStew
• Tax Notes: @TaxNotes

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Credits
Host: David D. Stewart
Executive Producers: Jasper B. Smith, Paige Jones
Showrunner: Jordan Parrish
Audio Engineers: Jordan Parrish, Peyton Rhodes
Guest Relations: Alexis Hart

Transcript

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This transcript has been edited for clarity.

David D. Stewart: Welcome to the podcast. I'm David Stewart, editor in chief of Tax Notes Today International. This week: delegation dilemma.

The Supreme Court's recent ruling in Loper Bright overturning Chevron deference has sparked discussion about the delegation of powers to the IRS and Treasury. In short, the Chevron doctrine applied a standard of review that deferred to agency expertise in crafting regulations where the Congress did not clearly speak.

So following Loper Bright, can Congress give either agency the equivalent of Chevron deference via delegation? And what does this mean for future tax regulations?

Here to talk more about this is Tax Notes contributing editor Marie Sapirie. Marie, welcome back to the podcast.

Marie Sapirie: Thanks for having me.

David D. Stewart: Can you give us some background on the Loper Bright decision and its impact for the tax community?

Marie Sapirie: Loper Bright isn't a tax case, but it does have potentially big implications for tax generally. The Supreme Court ruled 6 to 3 to overturn the deference to agency interpretations of ambiguous statutes established in Chevron with the majority holding that Chevron couldn't be reconciled with the Administrative Procedure Act.

The Court said that the APA incorporates the traditional understanding of the judicial function under which courts must exercise independent judgment in determining the meaning of statutory provisions. And because Chevron sometimes required courts to substitute the agency's interpretation for their own independent judgment of what the law means, it had to be overruled.

For tax, perhaps the most important part of the decision is the discussion of statutory delegations of authority. The Court said that when a particular statute delegates authority to an agency consistent with constitutional limits, courts must respect the delegation while ensuring that the agency acts within it. Now, the question is what that means for the delegations that are already in the code and any others that might be put in in the future.

David D. Stewart: Could you tell us who you spoke to about this?

Marie Sapirie: I spoke with Steve Rosenthal and Don Susswein. Both of my guests have extensive experience in private practice and on Capitol Hill drafting tax laws. Their wide experience covers partnerships, financial instruments, and many other areas of business taxation.

Steve is currently a senior fellow in the Urban-Brookings Tax Policy Center. Prior to that, he practiced tax law for over 25 years, and he worked on the Hill as a legislation counsel with the Joint Committee on Taxation. Don currently leads the partnership tax group in RSM's Washington National Tax office. He was also majority tax counsel to the Senate Committee on Finance. Before that, he was an attorney in the appellate section of the Tax Division of the Department of Justice.

David D. Stewart: And what sort of issues did you get into?

Marie Sapirie: We discussed what Loper Bright means for both the process of writing tax legislation and drafting regulations. In particular, the statutory delegations of authority are going to continue to be a major feature of this ongoing discussion for tax purposes because the tax code has both a general delegation of authority to write guidance in section 7805(a) and many specific delegations throughout the code. And Don and Steve have really interesting insights on the questions around delegations.

David D. Stewart: All right, let's go to that interview.

Marie Sapirie: Thank you, Steve, for joining the podcast today.

Steve Rosenthal: Thank you, Marie.

Marie Sapirie: And thank you, Don, for joining us on the podcast today.

Donald Susswein: Thank you very much, Marie.

Marie Sapirie: So today we'll focus on what the recent Supreme Court decision in Loper Bright and the overruling of Chevron means for tax legislation and regulations. I thought we'd start with statutory delegations of authority, which the majority opinion discussed and which are already included in many individual sections in the tax code as well as in the general grant of authority in section 7805. So could you talk to us about following Loper Bright: How can Congress — or should they try to — give the IRS the equivalent of Chevron deference by writing a delegation of authority into the code generally or into the specific code sections?

Steve Rosenthal: Well, this is Steve. I think the biggest feature of Loper Bright is the one paragraph and one footnote with respect to delegations. And I think it's entirely possible that we will be debating Loper Bright delegations in lieu of debating Chevron deference and that they might have the same effect of having the courts defer to agencies' interpretations. So I think the delegation is core to the ruling.

Donald Susswein: This is Don. I agree with Steve, and at first blush I thought, "Well gee, can't they write a statute that creates Chevron deference or delegate Chevron-type deference?" That is something I don't think they can do. And Steve is correct, I think, that the limits, whether they're constitutional limits or APA limits or just common sense limits on what they can and cannot delegate is going to be a critical issue. And there are standards, but they probably really haven't been tested very much in the tax area.

Marie Sapirie: So the majority opinion noted that some statutory delegations allow agencies to regulate subject to limits imposed by a term or phrase that leaves agencies with flexibility. They cited the words "appropriate" and "reasonable" as examples of that. Given that discussion, what do you think might be the boundaries of specific delegations, especially for tax? In other words, how specific might Congress need to be in writing delegations going forward?

Steve Rosenthal: Let me take a first shot at that. To be a legitimate delegation, there needs to be two elements. Congress needs to define the boundaries of the delegated authority, and two, the delegated authority has to be subject to constitutional limits. And I think we'll get into each of these requirements shortly, but in terms of delegations, the court said basically there are three types of delegations.

One type, Congress asks the agency to give meaning to a particular term, another type where Congress asks the agency to fill up the details of a statutory scheme, and a third type in which Congress gives the agency a lot of flexibility, as you've described, Marie. The Supreme Court used words that Congress have used in the past, like "appropriate" or "reasonable." And that kind of flexibility I think would allow a lot of latitude. On the other hand, as I said, there are a couple of requirements for a good delegation, but the Court signaled it could be flexible.

Donald Susswein: Well, let me give an example that may highlight at least the way I think about it, and whatever words the Court has used, I think this is what they had in mind or maybe what they should have in mind. Congress can set the interstate highway speed limit at 65 miles an hour. It can't delegate the power to set a safe speed limit or an efficient speed limit.

It could, say, delegate authority to figure out what is the correct speed limit to maintain gas usage at current levels. Now, that's very mechanical. It requires expertise. It can't be done in the drafting room as Steve and I would tell you, but there's a standard. It's a mathematical empirical economic cost-benefit analysis, and you can tell whether they've done it or not, but it is very detailed and it is flexible.

But now let's say the Treasury says, "Well, we want to redefine gas." They used the term "gas," they didn't say "gasoline"; and we think we've got the power to take into account hydrogen or methane or natural gas. That's a Chevron issue. There, I think unfortunately or fortunately that Treasury can't, in an era of hydrogen gas cars or electric cars, redefine the word gas and say, well, that's what they would've said had they thought about it.

But if they wrote that statute in 1955, when they said gas, they were talking about gasoline. So to me that's an example of what they probably can — obviously this is not tax, but you could imagine a gas tax operating off of the same rule. I think that's what they can and what they can't.

Steve Rosenthal: Well, Don, let me pick up on that, your gasoline versus hydrogen example, and let's say there are mileage requirements for gasoline-fueled cars. Could an agency extend that regime to hydrogen-fueled cars even though the statute says nothing about hydrogen? And to me, I think they could. I think that part of the scope of delegation is to fill in gaps and to give meaning.

And I don't think necessarily a court would find that the agency could not extend the scope of what would yet be a fuel. Of course, you have to look to the purpose of the statute and that might yet determine whether or not an agency's interpretation goes too far. But nonetheless, I think it's a little more flexible than you're suggesting there.

Donald Susswein: Well, that's a great question, Steve, and I'm so glad you raised the question about purpose because that is certainly — and of course, when you're dealing with things like energy and safety and things like that, it's a whole different field than the tax law. But let's stick with that example. The purpose of a legislation, let's say it's the Clean Air Act or some gasoline savings act of '55 or '65 or '75, whatever year it was enacted. I don't know any statute, I can't think of any that has one purpose.

In my experience, if a statute like that were enacted or the gas tax were enacted or anything else like that, those are bitterly contested, sometimes bitterly, but they are seriously contested issues; what is included, what is not included, how tough it should be. These are fought out as political issues, policy issues in the Congress and for the Treasury or the executive more importantly, to come in later and say, well, they just didn't go far enough. To me, and this is perhaps later in our discussion, to me it's a question of separation of powers.

And I don't mean just a highfalutin constitutional theory. The point is these are important political decisions. They're supposed to be decided by majority vote and democracy with all of our special rules about vetoes and things like that. And for the executive branch just to say, "Well, we'd like to regulate more, and we don't think we can get that through Congress or it'll be a bitterly contested fight." I just don't think they have the authority to do that.

And again, they would undoubtedly say, "Well, the purpose of this was to save energy or to produce safety." And yeah, that's true, but I think a reference to purpose is so vague and so subject to subjective decision-making and discretion and perhaps manipulation that I don't think it really says anything to say that you're doing something for the purpose of a statute.

Steve Rosenthal: Well, I think that there's a little more that you might find in the statute or the legislative history to give you a feel for what is purpose, and that turns out to be an issue of contention whenever the Court looks at delegations. The general standard, by the way, for the last century or so has been a good delegation must satisfy an intelligible principle to guide the agency's exercise of authority.

And we see lots of tax rules that talk about giving the IRS authority to issue regulations as necessary or appropriate to carry out the purpose of the statute. Well, that's vague and it might fail an intelligible principle test. However, there have been many a case outside of tax in which the Court has held up that delegation standard as satisfying the intelligible principle standard by looking at the scope of the purpose of what Congress was up to.

And the broader question about separation of powers is a good one. Congress delegates an awful lot to the agencies, and the Court has recognized that in an increasingly complex society that keeps changing, Congress can't do its job alone, it needs to delegate. And in the three centuries of Court jurisprudence, there have been only two cases in which the Supreme Court found that Congress overstepped its delegation authority with a nonintelligible standard.

And so there's a lot of latitude given to Congress to delegate. And once Congress delegates, again, the standard is very similar to the Chevron doctrine, a court will defer to reasoned decision-making. And so to me, I think that delegation may yet revive the Chevron deference type standards, but this whole area could yet change.

Donald Susswein: Well, let me address that. And I know, Steve, you've cited a case that goes back to the 1920s, but the bulk of the administrative state was created in the Great Depression and the years thereafter, and that was very controversial. We were obviously in an economic emergency. Great powers were delegated, and you're absolutely right, the Court for most of that period, '40s, '50s, '60s, '70s, '80s, '90s said, "Fine, we're going to go along with it."

Obviously people are rethinking that as the power of these agencies has increased. In the tax area, I think it's going to be different. Whatever the answer, you may be right in some of the other areas of the so-called administrative state, I think in the tax area it's going to be a lot more restrictive. We looked up through the code to see how many times there was a delegation to issue regulations to fulfill the purposes of the statute.

That was almost unheard of in 1954. Ten or 15 years later, they were 90, then there were 130, now there's over 200. We made a list. And when I looked at them, I scratched my head and I said, "I have no idea what they're talking about here." Let me give you an example of a situation of a very, very good delegation. When Congress rewrote the OID rules in 1982 and '84, there were pages and pages and pages of highly detailed mathematical scientific rules put into the code.

It's practically an algebraic form — it is an algebraic formula, a series of formulas, a lot of defined terms. We spent months talking about those. We redid them several times. At the end, the Congress was pretty much satisfied that the people in the drafting room like Steve and me had gotten it right as to OID on fixed-rate bonds.

But they scratched their head and they said, "My God, adjustable rate bonds?" Which were just kind of coming into fruition at that point, or mortgage-backed securities or contingent debt; there's no way they could have done that. But when they said extend by regulation these principles or these rules to adjustable rate bonds, everybody knew what they were talking about. That you shouldn't be able to do with an adjustable rate bond, which you can't do with a fixed-rate bond, but it's a difficult mathematical and administrative question. That is a perfect balance, in my opinion, the '82, '84, maybe even '86 Act.

Those rules were excruciatingly detailed in the statute, passive losses, all of that stuff. And there were relatively minor areas where as you say, Steve, the principle or the purpose was relatively clear, to reflect the constant yield method. OK, how do we do that for adjustable rate bonds? To me, that's the perfect balance of what Congress should do, establishing a principle, very detailed. But when they can't do it, my God, they have no idea. We'd have been in the drafting room for five years. They have to delegate that.

Steve Rosenthal: I agree with you, Don, that the best practice is to specifically delegate and to give a suggestion as to what the purpose is either in the legislation or the committee reports. But Don, is that necessary? To what extent can Congress just keep writing based on the general delegation to the IRS for needful regulations without having to get into the specifics?

Donald Susswein: Well, only time will tell what the courts will ultimately do. And again, there may have been very, very broad delegations in the past, certainly there were in the era of the administrative state, the post-Depression era, and in the cases you mentioned in the tax area, but I think we're doing it in a different world, and when you stop and read the words, again, the words generally are words.

They don't necessarily tell us what the courts are going to do. But I think there's a consciousness, particularly in the tax area, after all revenue bills, the Senate cannot even initiate a revenue bill. They are banned from starting tax legislation. That is a constitutional limit. Well, if you can't even have the Senate of the United States initiate a new tax bill, my God, can you have the Treasury?

If the regulation would raise revenue, I have a big question about it. If the regulation wouldn't raise revenue, it wouldn't really dramatically increase taxes or decrease taxes; that's a good test perhaps. If it would, it's a major change. Why not go to Congress? Why not just go to Congress and say, "We need this change?"

Steve Rosenthal: Well, Don, you and I know Congress often is dysfunctional. It can't move because of partisan divides. When it does move, it sometimes moves by enacting major restructuring of the tax code in three weeks, like the 2017 Act. And so consequently, I'm not sure it's a simple matter to just say, go to Congress.

But the bigger question is to what extent can Congress be its own master with respected delegations? If you go back to the 18th century, we used to fund our government through tariffs. And Congress gave Alexander Hamilton, our first Treasury secretary, the authority to set the tariff rates to make sure that production costs were level between our countries and others.

Likewise, there was an 18th century real estate tax across the country in which again, Congress said, "Treasury, you determine the rates. Here's how much we want to collect from each state, but you determine the rates."

Donald Susswein: Well, that's a standard. That's just like what a city hall does. If Congress said how much it had to collect, then that was a standard. And if Alexander Hamilton was told to equalize something or to rationalize something with other countries, that's a standard. So I have no problem with that. The problem is if the Treasury says, "My God, we can't get this carried interest loophole fixed." Or, "We can't get that fixed." That's what troubles me.

Steve Rosenthal: So Don, I don't think it's incumbent on Congress to act with respect to every problem that pops up. Again, I think you and I agree, the standard we ought to be looking for is a boundary setting by Congress. And so there's a lot of authority that Congress can delegate to Treasury or the IRS, but it has to have some standard, I'm with you there.

And the question going forward though will be how much standard is required to create a boundary and to satisfy the intelligible principle of what did Congress actually do. Here, therefore, there hasn't been much of a requirement. A couple of cases in three centuries — has there been any noise about applying a nondelegation rule to Congress? But I have to tell our audience, times are changing, but I see the writing on the wall, and it's not as simple as simply courts deferring to Congress as they have for three centuries.

Donald Susswein: I agree with you, and I'm going to try to give you the answer. From my experience, and if somebody was asking me for what the standard should be, I would say follow the golden rule, which is don't delegate authority to an administration if they're of the opposite party. In other words, if you are a Republican-controlled Congress, don't delegate an authority that you wouldn't trust in the hands of a Democratic Treasury Department and vice versa.

I think that's a pretty good standard. If you wouldn't trust somebody who has a completely different view of policy or politics than you to make the decisions necessary to implement that regulation, then it shouldn't be delegated. That's my proposed standard. Let's talk about what is the urgent need for regulation. Until the 1960s or '70s, maybe even very recently, they didn't need regulations. They wrote statutes.
And a lot of the issues that we see fought out now in the regulation such as, do you need continuity of interest in a merger? Do you need a certain business purpose? That was all decided by the courts and they reached some pretty good answers. In most cases just based on the statute.

Congress is writing so many laws now — tax laws — and as you pointed out, they're passing them in three weeks, or they're considering them in three weeks. And often they're doing it just to meet some political — well, obviously everything's politics, but oh, we have to get that. We need the revenue estimate or this, that, or the other thing. I think in order to have a workable system, you have to identify emergencies. Sure, if there's a health and safety emergency, fine — regulatory agency does something. But I don't think there are that many tax emergencies. I really don't.

Generally, if it's a very, very abusive transaction, they'll come and the Ways and Means and Finance chairmen, they'll get together and they say, "Oh, this particular transaction is horrible. We're going to shut it down and we're going to do it retroactively till the date of announcement." They can deal with emergencies. So I don't see the pressing need for delegations, frankly. I think a statute, the IRS can do a tremendous amount even with revenue rulings. Most of our clients do not want to have any dispute at all with the Service. I've seen the IRS issue an FSA — that's a field service advice. It's the lowest level. It's probably not even authority at all except maybe for penalty purposes, and it can shut down an industry.

The real private sector is so in need of guidance and clarity. They're desperate for anything from the Service. So I don't think the need for regulations as a fire extinguisher is real. The Treasury does not need to be the fire department to put out tax emergencies with regulations, and if Congress can't get it right, there's always another tax bill next year.

Marie Sapirie: Justice Kagan wrote in her dissent that overturning Chevron will cause a massive shock to the legal system, casting doubt on many settled constructions of statutes. In the case of the tax rules, what regulations do you think might be at risk now?

Steve Rosenthal: Sure, I'll take a shot at this. So first off, Justice Kagan is correct that there are a whole bunch of regulations that can now be challenged. In the majority opinion, Chief Justice Roberts suggested that there was a form of stare decisis for rules that already had been upheld under the Chevron doctrine not to be relitigated.

Having said that, relatively few rules that actually got to court and were upheld under the Chevron doctrine and different circuits might've seen them or not. Very few got to the Supreme Court. So first off, there is open season on a lot of different rules, but next, I think that in the tax area, we are somewhat advantaged because first off, there's the general delegation as I've described. And to me, I agree somewhat with Don's view of that general delegation of needful regulations that mainly it's to serve the purpose of determining definitions and essential elements of a statute, but that will satisfy a whole bunch of potential challenges.

As Don said earlier, there are a lot of disputes over what a word means and what the scope of a person being taxed or not could yet be, what can be exempted. But going further, when there's a specific grant in a statute, I think the IRS is pretty secure. Even if the specific grant, as I mentioned earlier, was in 1502 or the consolidated return roles, which is almost a blank sheet for the Treasury, or section 385 to label certain financial instruments "debt" and others "equity." So long as Treasury considers in a nonexclusive list, certain factors, again, a pretty blank slate in my view.

But where I think the regulations might yet run into problems is circumstances in which there is no specific delegation and we struggle to find the purpose of a statute because the legislative history, the committee reports, and the like are incomplete. And so there you run into some problems. And there are plenty of statutes that are interpreted without specific delegations of authority or even delegations of authority on unrelated matters. Those, I think, are the most difficult. Every day you read about another piece of litigation; I'm not really equipped to evaluate each and every one of them. Don and I have chatted in the past about the scope of a limited partner for purposes of the exemption from the payroll taxes.

There's no specific delegation there, and so how should the Court look to a potential interpretation by the Treasury to look at functional activities as opposed to state law definitions? We can look at that differently. I'll speak for myself by saying that if the regulation is ungrounded in the statutory wording and you can't define any legislative purpose for the wording, well, that could yet be a problem. On the other hand, sometimes you can find a purpose even in something as cold as a definition of limited partner, that it might include other factors like management control, things of that sort. But anyway, that's my big picture.

Donald Susswein: Let me try to answer the question by avoiding the question 'cause I have no idea what, and I don't have a list of specific things that I think — surely, if you have a client who's got an issue and there's a lot of money involved, you're going to challenge the regulation of course, and Tax Notes is going to write a big story about it, and it's going to be big news. But in the big picture, the more I think about it, I think the Treasury could maintain 90, 95 percent of the current tax system and probably improve tax administration without a single regulation. When it's a lot of money involved where the taxpayers are conservative, which is generally most taxpayers, we're not in the tax shelter era where people are doing deals primarily for tax purposes for the most part. We are in the era of people having running businesses and needing to know what the tax law is and not wanting to get in trouble with the IRS and not wanting to have their financial statements restated, etc., etc.

So in my experience, the desire for certainty and the desire to avoid a problem with the IRS is so strong that even if the Supreme Court said they can't write any more regulations at all, the IRS could say, "Well, if you opt into this procedure ..." For example, consolidated returns, they could just say, "If you opt in to filing your tax return this way, this is how the rules work. And if you don't opt in, you're fair game, and you better disclose it." Or take a look at carried interest, which is one of Steve's issues that he cares deeply about. Well, that whole practice is resting on a revenue procedure. It's not even a revenue ruling. It's a revenue procedure that says if you comply with these rules, you win, and if you don't — and you can't argue with it. You can't say, well, I want to comply with 80 percent of it. It's not a policy; it's a procedure or a proposed regulation.

The IRS has a position that if you comply with a proposed regulation, they will not challenge it even though it's not a final regulation. And taxpayers love that, even if it hasn't been finalized. But you can't go in and argue, oh, well, I comply 80 percent with this proposed regulation and here's the policy. No, no, it has to be all or nothing. So I think between disclosure and the fact requiring disclosure or calling something a listed transaction, they have so many tools. And I know you disagree, I think from your experience, but in my experience, because I've been working with what you'd call middle-market taxpayers and Big Four, Fortune 500 or even more; they're very, very conservative. That's my experience. So I don't think this is an emergency, even if they couldn't write any regulations.

Steve Rosenthal: So Don, if I understand you correctly, you're suggesting the IRS could write fewer regulations yet issue subregulatory guidance, and that would satisfy clients' needs for certainty?

Donald Susswein: Well, not just satisfy, it would attract them. They would be so eager to get the rules and to know that this is a safe harbor that they wouldn't want to take the risk of saying, "Can't we get a little more?"

Steve Rosenthal: But you're not saying that clients who seek certainty would prefer fewer regulations or fewer or less administrative guidance because I think that engenders more uncertainty.

Donald Susswein: No, no, I agree with you. What I'm saying is regulations are generally helpful to taxpayers, not harmful. Ninety percent of most regulations say, "This works, and then you can do deals based on it." Five or 10 percent of them are saying, "Well, this doesn't work and we're going to shut that down."

Steve Rosenthal: I think both it's in the interest of Congress and in the interest of taxpayers to get a lot of guidance. And the question I think you're raising is, is that guidance better in regulatory form or subregulatory form? And I guess my instinct is, to the extent we can have regulations, isn't that better? Because we have, since 1940, the Administrative Procedure Act, which requires notice and comment and taking to account public suggestions as to how to write rules. I think that process is relatively good, transparent, and collects lots of useful information. So why have fewer regs that go through that process as opposed to subregulatory guidance?

Donald Susswein: That's not exactly what I'm arguing. What I'm saying is let's go through the process. Let's have regs. They're very helpful. They get into much more detail and nuance than subregulatory guidance. But what I'm saying is if the regulations were not binding, in other words, if they got relatively little deference, essentially what I guess I'm saying is suppose all regulations got the same deference that a proposed regulation got, which is that taxpayers can rely on it if they comply 100 percent, the IRS will not challenge its own proposals. But they don't yet have the force in effective law, and if somebody wants to say, "No, that's not what the statute means," they can litigate that in court. What I'm saying is I'm sure you would view that as an unfavorable thing where we couldn't get binding final regulations. What I'm saying is a practical matter; I think the tax system would operate just fine.

And again, in the area that you have written a lot about, carried interest, there's a regulation out there dealing with fee waivers, which is somehow converting fees into carried interests. And they wrote a proposed regulation and basically it's been followed. The whole industry just said, "Fine, you've told us what the bind lines are." No one's challenging it. They're happy to comply because even in a proposed regulation, they have the standard. And yes, there might be a few cases that will depart from that and Treasury and IRS can deal with or IRS can deal with that on a case-by-case basis. I think on the margin you have very good points, but by and large, I think the system is working fine even if you didn't have deference to Treasury regulations.

Steve Rosenthal: Well, let me just add a final word. I think you and I, Don, have different visions. I think we both agree that the Loper Bright overruling of Chevron is going to change a lot of functions. Lots of lawyers will be suing on behalf of clients on regulations. The IRS might, as you suggest, write regulations that are less frequent or comprehensive. Maybe Congress, as you and I chatted about earlier, puts a little more attention into delegations and the purpose of statutes. And you and I, as policy commentators, we're going to have a lot of work ahead of us as well. But if I step back, I'm a fan of the administrative state. I think the IRS, by and large, has done a remarkable job administering the tax rules. And from my experience drafting tax rules in the '90s and watching the IRS interpret them later.

When I was in the Hill, the IRS had called me up and ask, well, what did I think about this approach or that approach? And later I would have an opportunity to testify on regulations and offer suggestions for approaches. It was an inclusive process. I think it's by and large work, and I think it serves everybody well. And my biggest concern coming out of the Loper Bright decision and the overruling of Chevron in the tax world is the upending of settled traditions in which all of us expect an IRS to function well, which it by and large does, notwithstanding all the additional tasks it has accumulated over the years because it does overall such a good job.

Donald Susswein: I agree with you, except maybe for the last 10 or 15 years. I think we are seeing a decline in the quality of what's been coming out. So if we were having this discussion in 1982, in 1984, in 1990, I think we'd be a lot closer. I am much more concerned about an executive branch, regardless of which party it is, going off on its own. I like separation of powers. It was a theory that was designed to apply no matter who's won the election, and that's the world I'd like to see.

Marie Sapirie: I think as this discussion has shown, there's still a lot to think about for tax law, in particular following the decision in Loper Bright. So I want to thank you both, Don and Steve, for joining us today to help consider all these issues.

Steve Rosenthal: You're welcome.

Donald Susswein: You're welcome. It was our pleasure.

David D. Stewart: And now: coming attractions. Each week we highlight new and interesting commentary in our magazines. Joining me now is Acquisitions and Engagement Editor in Chief Paige Jones. Paige, what do we have for us?

Paige Jones: Thanks, Dave. In Tax Notes Federal, Shirley Chin explains how to align interests when negotiating tax credit transfers. Kyle Pomerleau and Carol Wang compare three minimum taxes on foreign profits of multinationals.

In Tax Notes State, three Alston & Bird practitioners outline the risks of delinquent or inaccurate reporting of unclaimed property. Garry Fujita offers thoughts about two Washington taxes that can create liability for nonresidents.

In Tax Notes International, Kartikeya Singh explains that pillar 1 amount A rules could influence in-scope companies to relocate personnel and physical capital. Jeffrey Kadet responds to a recent article on the potential reform of income sourcing rules.

And finally, in featured analysis, Joe Thorndike examines an 1863 convention of manufacturers opposed to income taxes and excise duties meant to fund the Civil War.

David D. Stewart: That's it for this week. You can follow me online @TaxStew, that's S-T-E-W, and be sure to follow @TaxNotes for all things tax. If you have any comments, questions, or suggestions for a future episode, you can email us at podcast@taxanalysts.org. And as always, if you like what we're doing here, please leave a rating or review wherever you download this podcast. We'll be back next week with another episode of Tax Notes Talk.

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