Michael Schler thinks the prognosis for the federal income tax, at least as it is currently administered, is not good. In The State of the Federal Income Tax System: Poor, he outlines many of the problems federal tax administration currently faces. Most of these problems are worsening as the foundations of administrative law more generally are challenged in the federal courts and in Congress.
Even with the enormity of the substantive law itself, those teaching income tax in law school cannot consider themselves masters of their subject without a firm understanding of the legislative and the administrative procedures that produce it. Imparting to young lawyers a sense of the conceptual design driving the tax law requires a full understanding of the forces that create it. These forces include the extent to which Congress is likely to have deliberately left ambiguity in the statute, the discretion Treasury can exercise as it interprets a statute, and the inevitable choices that the Internal Revenue Service must use in its efforts to curb taxpayers as they pursue questionable positions.
Schler’s essay will bring the reader up to date (or at least up to the late summer of 2025 immediately after the One Big Beautiful Bill passed) on the enormous shifts that have taken place recently in administrative and legislative practice. Key among these developments are the reliance on the reconciliation process (and the reinterpretation of the revenue scoring rules that has accompanied its increased use), the possibility of the increased use of procedures like the Congressional Review Act that would require Congressional ratification of regulations, and the abandonment of the prior law regarding judicial deference toward regulatory actions (of all administrative agencies, not just the IRS and Treasury) in the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024).
Although his focus is on the processes of legislation and regulation on their own terms, the problems he points out cannot help but affect the texture of the law itself. Once upon a time the income tax could be approached with a presumption of coherence. Marshalled in the service of such coherence in the tax base was corrective legislation, gap-filling regulations, and judicial opinions that engaged in something like common-law reasoning as incomplete statutes were interpreted. With the push after Loper Bright towards strict textualism and limited regulatory authority, this coherence is likely a thing of the past.
As Schler’s discussion reveals, the impact of Loper Bright on the everyday business of enforcing the tax law is far from clear. The first question, of course, is the extent to which all of the aftermath of Loper Bright will apply to the IRS and Treasury. Even though incremental changes over the last two decades have reduced the extent to which tax administrators have been able to claim exemption from other aspects of federal administrative law, there are ways in which tax administration is, and likely will continue to be, different. (A quick read of the Supreme Court’s majority opinion in the 2026 tariff case, Learning Resources, Inc v. Trump, No. 24-1287, will reveal just how much differently the current Supreme Court is willing to treat exercises of taxing power.) The ways in which tax law was clearly different—especially with respect to pre-enforcement judicial review—reflected an appreciation of what was institutionally possible, on the part of all of the players. Many of the recent moves toward conformity of tax administrative law with administrative law generally, and recommendations for future such moves, come from those with little concern for the end result.
Regardless of where one comes out in the debate about how different tax administration should be allowed to be, the major shifts in the underlying structure of administrative law analyzed by Schler will undeniably have an effect on the administration of the tax law and thus on the substantive law itself. Thus, no one who seriously hopes to understand the income tax can afford to ignore the current shifts in the background administrative law, and few discussions of these shifts are likely to be more useful than Schler’s to those who seek to understand the federal income tax.
A revised version of this paper was presented before the NYU Tax Policy and Public Finance Colloquium on September 9, 2025, after the enactment of the One Big Beautiful Bill. This version was available as of August 2026 on that Colloquium’s website.
