Grauer and Wood Publish in Arizona Law Journal

August 1, 2007

Professors Myron C. Grauer and Richard J. Wood have both published tax-related articles in volume 39 of the Arizona State Law Journal.

Grauer’s article, “Justice O’Connor’s Approach to Tax Cases: Could She have Led the Court Toward a More Collaborative Role for the Judiciary in the Development of Tax Law?”, examines a number of Justice O’Connor’s tax opinions to see what her retirement from the Court might mean to the future of tax cases to be considered by the Court.

“Over the past several decades, three Supreme Court Justices—Justices Thurgood Marshall, Harry Blackmun, and Sandra Day O’Connor—became known for authoring opinions in significant tax cases,” says Grauer. “Because of Justice O’Connor’s recent retirement, it appeared appropriate to examine her approach to tax cases in order to consider what her absence from the Court might mean as to how the Court might approach tax cases in the future.”

Grauer’s article examines a number of Justice O’Connor’s tax opinions and concludes that although she had a sophisticated understanding of the tax system, at times she became so buried in the minutiae of the Code and Regulations that she failed to consider some of the broader issues before her. At other times, she appeared willing to look beyond the wording of a particular Code section under consideration and examined that Code section in the broader context of the entire Code, and, as a result, wrote a stronger opinion.

“Despite the fact that she was not always consistent in her approach to tax cases, I conclude that her absence from the Court will leave the Court without the last of the three Justices who demonstrated a facility to deal with tax issues, and that absence does not bode well for the future of tax jurisprudence emanating from the Court,” Grauer says.

[ Read the August 10, 2007, TaxProf Blog summary of Professor Grauer’s article ]

Wood’s article in the same volume is “Pious Politics: Political Speech Funded Through I.R.C. § 501 (c) (3) Organizations Examined Under Tax Fairness Principles.”

According to Wood, in February 2006, the IRS reported that 72 percent of churches and other tax exempt entities that it examined intervened in political campaigns in violation of the prohibition against political campaigning “on behalf of (or in opposition to) any candidate for public office” provided in I.R.C. § 501(c)(3).  Using specific examples and calculations, Wood’s article examines the ways in which I.R.C. sections 170(a), 501(c)(3) and 107 combine to increase the cash available to churches and other tax exempt organizations.

“The enhanced ability to collect cash allows tax exempt organizations to spend more money on political campaigns than non-tax exempt organizations,” says Wood. “Pious Politics examines the fairness of that advantage under the tax policy principles of substantive and systemic horizontal equity.”