This Article examines the Supreme Court's interpretive approach in recent tax cases. Part I of the Article sets the stage by describing the Court's interpretive approach, its focus on the relative determinacy of statutory language, and the backdrop of Chevron. Part II examines the effect of these issues on tax law, focusing on three cases that construe the same Code provision, section 104(a)(2), but apply quite different interpretive approaches. In United States v. Burke, the Court appeared to find the provision ambiguous and relied in part upon an interpretation of the statute contained in a Treasury regulation. Subsequently, in Commissioner v. Schleier, the Court applied a plain meaning analysis to find an additional "independent" statutory requirement. Most recently, in O'Gilvie v. United States, the Court acknowledged the existence of a linguistic ambiguity in the same language interpreted by the Court in Schleier and construed it by reference to a contextual examination of the history and tax-related purpose of the provision. The inconsistency of the analysis in these cases is evidence that the Court's evolving approach to statutory interpretation is doctrinally unstable. Moreover, a close reading of the cases reveals unresolved doctrinal conflicts regarding the scope and meaning of the Code provision. Although those conflicts have now been largely resolved by Congress in legislation enacted last summer, the cases illustrate the doctrinal incoherence that can result from or be intensified by the Court's inconsistent approaches to its interpretive task. Part m outlines some of the normative questions that must be addressed if the Court continues on its present course, including an evaluation of the costs of relying on legislative "correction." When the Court discerns plain meaning, it analyzes the statute without consideration of extrinsic contextual sources of interpretation and without deference to the administrative agency charged with its enforcement. Professor Schauer argues that this approach is a normatively beneficial and efficient decision-making model for a Court with such diverse political and jurisprudential outlooks and that it also protects the public from captured administrative agencies. The question remains whether the costs of incoherence in a complex statutory scheme outweigh these supposed benefits.
Mary L. Heen, Plain Meaning, the Tax Code, and Doctrinal Incoherence, 48 Hastings L.J. 771 (1997).