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Taxpayers or Governments? Default as Determinant in Canadian and US Supreme Court Tax Decisions

Published online by Cambridge University Press:  25 October 2005

Alexandra Flynn
Alexandra Flynn
Affiliation:
University of California, Berkeley
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Abstract

Abstract. This paper demonstrates that an important and overlooked guide to understanding Canadian and US Supreme Court decision making in tax cases is the “default,” or the party to whom the court will decide in favour of if tax language is ambiguous. While statutory interpretation methods influence the overall manner in which courts approach tax-law decision making, the default is a more concrete guide to evaluating Canadian and US Supreme Court decisions. The paper first explores the statutory interpretation approaches referenced in Canadian and American Supreme Court tax law cases. The paper then examines the histories of defaults, including the cases in which they emerged and the rationales given for their adoption. Third, based on original research, the paper concludes that defaults have a profound effect on income tax decisions by, in Canada, the Supreme Court favouring the taxpayer and, in the United States, the Court deferring to the Internal Revenue Service.

Résumé. Cet article démontre que la partie à laquelle les Cours suprêmes du Canada et des États-Unis donnent gain de cause lorsque la loi est ambiguë, appelée “ défaut ”, constitue un point de repère important, souvent négligé, pour comprendre les décisions de ces tribunaux en matière de droit fiscal. Bien que les méthodes d'interprétation de la loi influencent la prise de décision de ces tribunaux dans des causes fiscales, le “ défaut ” représente un point de repère plus concret pour évaluer les décisions des Cours suprêmes du Canada et des États-Unis en ces matières. L'article qu'on va lire examine d'abord les interprétations de la loi rencontrées dans la jurisprudence fiscale des Cours suprêmes du Canada et des États-Unis. Il présente ensuite l'historique des “ défauts ”, les cas où ils ont surgi, ainsi que les arguments et les justifications qui les accompagnent. Enfin, l'article conclut, sur la base d'une recherche inédite, que les “ défauts ” ont des effets profonds sur les décisions des Cours suprêmes en matière de droit fiscal tant au Canada, où la Cour suprême donne le plus souvent gain de cause au contribuable, qu'aux États-Unis où la Cour suprême se range plutôt à l'avis de l'Internal Revenue Service.

Type
Research Article
Information
Canadian Journal of Political Science/Revue canadienne de science politique , Volume 38 , Issue 3 , September 2005 , pp. 605 - 625
Copyright
© 2005 Cambridge University Press

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