In July 2016, I was tasked with responding to a presentation on “Trends in Tax Exceptionalism and Tax Litigation” by Professor Kristin Hickman of the University of Minnesota and Donald Korb of Sullivan and Cromwell. The event was organised jointly by the Journal of Tax Administration and the Centre for Tax Law, University of Cambridge. For those not aware of her work, Professor Hickman has established herself as the foremost academic commentator on matters of administrative law in US taxation, whilst Donald Korb was formerly Chief Counsel for the US Internal Revenue Service.
The forthcoming volume of the Journal of Tax Administration bears fruit from that workshop. Professor Hickman has produced a piece entitled “The growing influence of administrative law and judicial review on US tax administration” which explores recent litigation relating to idea of “tax exceptionalism”, namely the idea that tax deserves special treatment from administrative law. In response to themes from her paper, I make my own contribution with a piece entitled: “Tax exceptionalism: a UK perspective”. The introduction to my piece reads as follows:
“In her article in this issue, Professor Kristin Hickman explores the relationship between the US Treasury and Internal Revenue Service (‘IRS’), and exceptionalism to general administrative law principles, dubbed “tax exceptionalism”. It builds upon work that Hickman has produced in response to the 2011 case of Mayo Foundation for Medical Education and Research v. United States in which the Supreme Court is generally considered to have rejected the idea of tax exceptionalism. Indeed, Hickman’s article deals a decisive blow to the idea of tax exceptionalism by noting that the functions of the IRS are not dissimilar to those of other administrative agencies. Why then “should the IRS avoid general administrative law requirements when other agencies administering substantially similar programs must follow them?” But that does not mean that questions do not remain. Whilst it can be accepted easily that there should be no general exceptionalism, that tells us little about “which administrative practices are susceptible to legal challenge under general administrative law principles?” or whether provisions of the tax code might in fact “justify certain tax-specific departures from general administrative law requirements, doctrines, and norms.”
A similar dichotomy can be said to arise in the UK between on the one hand the idea that there are no special principles of public law which apply to tax law and on the other hand the fact that the application of general principles of law in respect of the tax administration, Her Majesty’s Revenue and Customs (‘HMRC’), will differ from treatment given to other administrative agencies. This article will explore this dichotomy by first exploring briefly the history of the prospect of tax exceptionalism in the UK, and thereafter looking in depth at instances where HMRC may be said in practice to benefit from distinct treatment. The article will further assess situations where greater tolerance was given to HMRC actions than ought to have been afforded.”