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Article
The Failure of Adversary Process in the Administrative State
Indiana Law Journal (2009)
  • Bryan T Camp
Abstract
In a series of hearings in 1997 and 1998, Congress heard allegations that the Internal Revenue Service (“IRS” or “Service”) was abusing taxpayers during the process of collecting taxes. The resulting distrust of the tax bureaucracy led Congress to create a special adversary proceeding providing for judicial review of IRS collection decisions. The proceeding is beguilingly titled “Collection Due Process” (and commonly referred to as “CDP”). My study of CDP’s structure, operation, and of 976 court decisions issued through the end of 2006 demonstrates that it has failed to fulfill its promise. Of the over 15 million collection decisions made since 2000, courts have reviewed at most 3,000 and have reversed only 16. That is a reversal rate of about one in a million. These numbers strongly support this article’s claim that adversary process is neither necessary nor sufficient to check government abuses in the modern administrative state. This article pursues two goals. First, it documents and explains CDP’s failure to provide a meaningful external check on tax collection abuses. In fact, CDP most likely hurts those who most need its promised protection from arbitrary agency action: the working poor who risk seeing their Earned Income Tax Credit subsidies snatched away. Second, the article links CDP’s failure to larger questions of the proper role for adversary process in the administrative state. Some commentators contend there can be no proper “rule of law” without adversarial process. This study of CDP proves the opposite claim: adversarial process, used in the wrong place and the wrong time, becomes a rule of deception rather than a rule of law. CDP is a failure on many levels, but an instructive one. This article proceeds in four parts. Part I gives the conceptual overview of the tax administration forest necessary to understand both the evaluation and critique of CDP. Part II explains the origins and operations of CDP. Part III applies the theory of tax administration developed in Part I to larger administrative law concepts to show how CDP fails to serve its promised purpose, and how it actually harms both taxpayers and the cause of good tax administration. Part IV sketches out some ideas about how tax collection might be structured along the lines of what I term “inquisitorial due process.”
Publication Date
Winter 2009
Citation Information
Bryan T Camp. "The Failure of Adversary Process in the Administrative State" Indiana Law Journal Vol. 84 (2009)
Available at: http://works.bepress.com/bryan_camp/3/