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U.S. Constitution, Article I, Section 9: No Bill of Attainder or ex post facto Law shall be passed. How does that square with the article's "The new I.R.S.

by ISL 11y ago

U.S. Constitution, Article I, Section 9: No Bill of Attainder or ex post facto Law shall be passed. How does that square with the article's "The new I.R.S. guidance will be retroactive, applying to all transactions as far back as Jan. 1, 2011." ?

jeremyt 11y ago
Well, in this case the IRS isn't passing a retroactive law, they are clarifying the interpretation of an existing law.
- tanderson92 11y ago
  The need to clarify the point implies that it was interpreted differently in the past. So this change in interpretation being applied retroactively is what the OP is concerned with.
  - dragonwriter 11y ago
    Interpretation isn't law, so in any legal dispute over the IRS actions under the current interpretation, the law which would be controlling is not retroactive. Not to mention that there is solid precedent that retroactive taxes are not, in general, ex post facto laws in the first place, such that even if this was Congress adopting a retroactive tax law, it still wouldn't fall afoul of the ex post facto prohibition.
    - tanderson92 11y ago
      > Interpretation isn't law, so in any legal dispute over the > IRS actions under the current interpretation, the law which > would be controlling is not retroactive. This is to me a very weak argument (not that I disagree that this may be the standard that is applied in practice). If the Congress passed a law saying "the IRS can set tax code as it sees fit" and the IRS proceeds to levy taxes all the way back to 1980 on people as however it so desires, you should not be allowed to use that law as grounds for not having violated the ex post facto requirement. If this is the current understanding of what is allowed, I must vigorously object to whichever judgement left this precedent.
      - dragonwriter 11y ago
        > If the Congress passed a law saying "the IRS can set tax code as it sees fit" Then this would be an unconstitutional delegation of legislative authority to the executive. [0] Rendering the consideration of whether any executive action under it would constitute an ex post facto law moot -- if Congress purports to delegate enough power to the executive that retroactive executive action under it would be an ex post facto law, than the whole scheme is an unconstitutional delegation of legislative power whether or not it is applied retroactively. Heck, even though retroactive taxation isn't generally ex post facto law (which is retroactive criminalization or enhancement of criminal penalties), the law you propose would be an unconstitutional delegation. > If this is the current understanding of what is allowed Its not, its just the prohibition that prevents it has nothing to do with (and is much broader than) the ex post facto law prohibition. [0] See, e.g., https://en.wikipedia.org/wiki/Nondelegation_doctrine#United_States https://en.wikipedia.org/wiki/Nondelegation_doctrine#United_...
        tanderson92 11y ago
        > Then this would be an unconstitutional delegation of legislative authority to the executive And yet this is what we seem to be experiencing in this case, where the IRS can make a policy interpretation retroactively to the tune of $6 billion for a single taxpayer. Your source indicates that congress allows the IRS to decide tax policy, but since tax evasion is itself a crime it seems to indirectly violate the ex post facto law prohibition.
        dragonwriter 11y ago
        > And yet this is what we seem to be experiencing in this case No, Congress passing a law saying that "IRS can set taxes at any level they want" is not what we are seeing. If you want to argue that the actual laws Congress has passed are unconstitutional delegations, please, point to the specific laws, and make that argument. > but since tax evasion is itself a crime it seems to indirectly violate the ex post facto law prohibition. Evasion is a different thing than non-payment. No act that occurred in the past that was not evasion when it occurred becomes evasion as a result of this change in application.
  - gohrt 11y ago
    but OP's concerns don't matter. The Constitution's concerns matter. "Battery" is a crime. If the state decides that "smacking someone's back" meets the definition of battery, they can prosecute people who committed that act before the clarification, as long as a judge finds their interpretation to be consistent with the wording of the law. Law is not computer code that fully specifies a simulation in advance.
    - deleted 11y ago
      [deleted]
    - mahyarm 11y ago
      So rule decider type B (judges) can effectively create retroactive laws/policies. An interpretation that is enforced is as good as a law.
      - ForHackernews 11y ago
        Yes, obviously. How did you think courts worked?
    - tanderson92 11y ago
      I would set up the situation more like the state passing a law saying that an agency, call it the Battery Protection Agency (BPA), can decide what constitutes battery. Then the BPA decides in 2015 that verbal abuse and insults constitutes battery, and prosecutors proceed to arrest people for insults going back 5 years before the BPA's 2015 decision. The parallels to the IRS case should be obvious, and the above hypothetical scenario is very much what the constitution was meant to protect against.
      - dragonwriter 11y ago
        > The parallels to the IRS case should be obvious Please point the specific provision(s) of law parallel to the one in your hypothetical, both as to the unlimited discretion and as to the discretion to decide what constitutes criminal punishment. Because I don't think the parallels are at all obvious.
whatgoodisaroad 11y ago
My guess would be that because this is "guidance" rather than a law or "bill" then this is not ex post facto application. In other words, the law is and aways has been that one should pay the appropriate taxes. OTOH, guidance informs the IRS how to interpret market activity in the past and classify it as legal or illegal.
deleted 11y ago
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dragonwriter 11y ago
Ex post facto laws are criminal laws making criminal acts that were not criminal before the law was passed, or increasing the criminal punishment for crimes committed before the law was passed. Retroactive tax laws are not ex post facto laws, and, anyway, this isn't even a retroactive tax law, its a decision about the manner in which the IRS will apply a law already on the books, which is only sustainable to the extent to which it is, in fact, consistent with the law already on the books. Its essentially the IRS coming to the view that they have not been properly enforcing existing law, and that will change for enforcement going forward (there are limits to how far back the IRS can go in enforcement actions, which presumably is the basis for the 1/1/2011 date.)
deleted 11y ago
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ceejayoz 11y ago
No new law is being passed.
p0ckets 11y ago
The IRS doesn't pass laws, it's just issuing a guideline on how it will interpret existing tax law.
- sneak 11y ago
  But if those interpretations are authoritative and violation of the current IRS interpretation (but not the previous one) means you get prosecuted in federal court, how is that not effectively the ability to retroactively change laws?
alexbock 11y ago
I'm guessing the idea here is that the IRS is changing how they interpret their own internal policy for how they will use the powers given to them by an existing law, rather than outright passing a new law with retroactive effects. ...but that justification seems like a horribly slippery slope. If you accept that logic, what stops congress from passing a law that creates the "Criminal Investigation Service" and gives their director the power to make things illegal? Would he then be allowed to make a "policy change" retroactively making something illegal and arresting them for it? edit: I think Peugh v. United States actually answers this. Retroactive application of changes to US sentencing guidelines by a government commission were ruled to be a violation of ex post facto protections.
DannyBee 11y ago
1. In the US, the supreme court has repeatedly held that the ex-post-facto clause only applies to criminal laws (See Calder v. Bull, which was decided in 1798). This is actually consistent with the history of the clause (It was understood to apply to criminal laws. Motions were made to change the wording to say it also applied to civil cases, they were turned down) 2. This is not a law, and may not even be administrative rulemaking (depending on what exactly they issued) Of course, even if it was, you have a mechanism to challenge it if they hold you to it: the courts.
- ISL 11y ago
  If the IRS doesn't think I've paid my taxes, I can go to prison. Doesn't that make this particular case a criminal one?
  - dragonwriter 11y ago
    > If the IRS doesn't think I've paid my taxes, I can go to prison. No, if the IRS doesn't think you've paid your taxes, they can attempt to collect the unpaid taxes. OTOH, if the Department of Justice can prove in a criminal prosecution that you've violated the criminal provisions of the tax law, you can go to prison. If the IRS thinks you've done that (which is different from just not paying your taxes), they can refer you to the DoJ for prosecution. This change to IRS guidance doesn't change the criminal provisions of the tax law that would apply were the government to prosecute you, therefore, the change is not a change to criminal law, retroactive or otherwise.
  - bd_at_rivenhill 11y ago
    Fortunately, tax law has been made so complex that the Supreme Court eventually decided that ignorance is a defense: https://en.wikipedia.org/wiki/Cheek_v._United_States https://en.wikipedia.org/wiki/Cheek_v._United_States So you may end up with penalties and interest, but you have a high probability of avoiding prison absent doing something stupid like trading emails with your broker on how you plan to evade taxes.
  - tsotha 11y ago
    It's only a criminal matter if the IRS thinks you broke the law deliberately. If it's the result of crappy record keeping or something you didn't understand they'll usually tack on some penalties and interest and call it a day. I know a guy who didn't even file for five or six years. Eventually he got a lawyer and made a deal which had him paying some fraction of his original tax liability. They'll put you in jail if you make them, but they don't really want to put you in jail. They just want your money. Oh, this guy? After getting his sweet deal he didn't actually pay them. I think he may end up in jail.

by ISL 11y ago

jeremyt 11y ago

Well, in this case the IRS isn't passing a retroactive law, they are clarifying the interpretation of an existing law.

tanderson92 11y ago
The need to clarify the point implies that it was interpreted differently in the past. So this change in interpretation being applied retroactively is what the OP is concerned with.
- dragonwriter 11y ago
  Interpretation isn't law, so in any legal dispute over the IRS actions under the current interpretation, the law which would be controlling is not retroactive. Not to mention that there is solid precedent that retroactive taxes are not, in general, ex post facto laws in the first place, such that even if this was Congress adopting a retroactive tax law, it still wouldn't fall afoul of the ex post facto prohibition.
  - tanderson92 11y ago
    > Interpretation isn't law, so in any legal dispute over the > IRS actions under the current interpretation, the law which > would be controlling is not retroactive. This is to me a very weak argument (not that I disagree that this may be the standard that is applied in practice). If the Congress passed a law saying "the IRS can set tax code as it sees fit" and the IRS proceeds to levy taxes all the way back to 1980 on people as however it so desires, you should not be allowed to use that law as grounds for not having violated the ex post facto requirement. If this is the current understanding of what is allowed, I must vigorously object to whichever judgement left this precedent.
    - dragonwriter 11y ago
      > If the Congress passed a law saying "the IRS can set tax code as it sees fit" Then this would be an unconstitutional delegation of legislative authority to the executive. [0] Rendering the consideration of whether any executive action under it would constitute an ex post facto law moot -- if Congress purports to delegate enough power to the executive that retroactive executive action under it would be an ex post facto law, than the whole scheme is an unconstitutional delegation of legislative power whether or not it is applied retroactively. Heck, even though retroactive taxation isn't generally ex post facto law (which is retroactive criminalization or enhancement of criminal penalties), the law you propose would be an unconstitutional delegation. > If this is the current understanding of what is allowed Its not, its just the prohibition that prevents it has nothing to do with (and is much broader than) the ex post facto law prohibition. [0] See, e.g., https://en.wikipedia.org/wiki/Nondelegation_doctrine#United_States https://en.wikipedia.org/wiki/Nondelegation_doctrine#United_...
      - tanderson92 11y ago
        > Then this would be an unconstitutional delegation of legislative authority to the executive And yet this is what we seem to be experiencing in this case, where the IRS can make a policy interpretation retroactively to the tune of $6 billion for a single taxpayer. Your source indicates that congress allows the IRS to decide tax policy, but since tax evasion is itself a crime it seems to indirectly violate the ex post facto law prohibition.
        dragonwriter 11y ago
        > And yet this is what we seem to be experiencing in this case No, Congress passing a law saying that "IRS can set taxes at any level they want" is not what we are seeing. If you want to argue that the actual laws Congress has passed are unconstitutional delegations, please, point to the specific laws, and make that argument. > but since tax evasion is itself a crime it seems to indirectly violate the ex post facto law prohibition. Evasion is a different thing than non-payment. No act that occurred in the past that was not evasion when it occurred becomes evasion as a result of this change in application.
- gohrt 11y ago
  but OP's concerns don't matter. The Constitution's concerns matter. "Battery" is a crime. If the state decides that "smacking someone's back" meets the definition of battery, they can prosecute people who committed that act before the clarification, as long as a judge finds their interpretation to be consistent with the wording of the law. Law is not computer code that fully specifies a simulation in advance.
  - deleted 11y ago
    [deleted]
  - mahyarm 11y ago
    So rule decider type B (judges) can effectively create retroactive laws/policies. An interpretation that is enforced is as good as a law.
    - ForHackernews 11y ago
      Yes, obviously. How did you think courts worked?
  - tanderson92 11y ago
    I would set up the situation more like the state passing a law saying that an agency, call it the Battery Protection Agency (BPA), can decide what constitutes battery. Then the BPA decides in 2015 that verbal abuse and insults constitutes battery, and prosecutors proceed to arrest people for insults going back 5 years before the BPA's 2015 decision. The parallels to the IRS case should be obvious, and the above hypothetical scenario is very much what the constitution was meant to protect against.
    - dragonwriter 11y ago
      > The parallels to the IRS case should be obvious Please point the specific provision(s) of law parallel to the one in your hypothetical, both as to the unlimited discretion and as to the discretion to decide what constitutes criminal punishment. Because I don't think the parallels are at all obvious.

whatgoodisaroad 11y ago

My guess would be that because this is "guidance" rather than a law or "bill" then this is not ex post facto application. In other words, the law is and aways has been that one should pay the appropriate taxes. OTOH, guidance informs the IRS how to interpret market activity in the past and classify it as legal or illegal.

deleted 11y ago

[deleted]

dragonwriter 11y ago

Ex post facto laws are criminal laws making criminal acts that were not criminal before the law was passed, or increasing the criminal punishment for crimes committed before the law was passed. Retroactive tax laws are not ex post facto laws, and, anyway, this isn't even a retroactive tax law, its a decision about the manner in which the IRS will apply a law already on the books, which is only sustainable to the extent to which it is, in fact, consistent with the law already on the books. Its essentially the IRS coming to the view that they have not been properly enforcing existing law, and that will change for enforcement going forward (there are limits to how far back the IRS can go in enforcement actions, which presumably is the basis for the 1/1/2011 date.)

deleted 11y ago

[deleted]

ceejayoz 11y ago

No new law is being passed.

p0ckets 11y ago

The IRS doesn't pass laws, it's just issuing a guideline on how it will interpret existing tax law.

sneak 11y ago
But if those interpretations are authoritative and violation of the current IRS interpretation (but not the previous one) means you get prosecuted in federal court, how is that not effectively the ability to retroactively change laws?

alexbock 11y ago

I'm guessing the idea here is that the IRS is changing how they interpret their own internal policy for how they will use the powers given to them by an existing law, rather than outright passing a new law with retroactive effects. ...but that justification seems like a horribly slippery slope. If you accept that logic, what stops congress from passing a law that creates the "Criminal Investigation Service" and gives their director the power to make things illegal? Would he then be allowed to make a "policy change" retroactively making something illegal and arresting them for it? edit: I think Peugh v. United States actually answers this. Retroactive application of changes to US sentencing guidelines by a government commission were ruled to be a violation of ex post facto protections.

DannyBee 11y ago

1. In the US, the supreme court has repeatedly held that the ex-post-facto clause only applies to criminal laws (See Calder v. Bull, which was decided in 1798). This is actually consistent with the history of the clause (It was understood to apply to criminal laws. Motions were made to change the wording to say it also applied to civil cases, they were turned down) 2. This is not a law, and may not even be administrative rulemaking (depending on what exactly they issued) Of course, even if it was, you have a mechanism to challenge it if they hold you to it: the courts.

ISL 11y ago
If the IRS doesn't think I've paid my taxes, I can go to prison. Doesn't that make this particular case a criminal one?
- dragonwriter 11y ago
  > If the IRS doesn't think I've paid my taxes, I can go to prison. No, if the IRS doesn't think you've paid your taxes, they can attempt to collect the unpaid taxes. OTOH, if the Department of Justice can prove in a criminal prosecution that you've violated the criminal provisions of the tax law, you can go to prison. If the IRS thinks you've done that (which is different from just not paying your taxes), they can refer you to the DoJ for prosecution. This change to IRS guidance doesn't change the criminal provisions of the tax law that would apply were the government to prosecute you, therefore, the change is not a change to criminal law, retroactive or otherwise.
- bd_at_rivenhill 11y ago
  Fortunately, tax law has been made so complex that the Supreme Court eventually decided that ignorance is a defense: https://en.wikipedia.org/wiki/Cheek_v._United_States https://en.wikipedia.org/wiki/Cheek_v._United_States So you may end up with penalties and interest, but you have a high probability of avoiding prison absent doing something stupid like trading emails with your broker on how you plan to evade taxes.
- tsotha 11y ago
  It's only a criminal matter if the IRS thinks you broke the law deliberately. If it's the result of crappy record keeping or something you didn't understand they'll usually tack on some penalties and interest and call it a day. I know a guy who didn't even file for five or six years. Eventually he got a lawyer and made a deal which had him paying some fraction of his original tax liability. They'll put you in jail if you make them, but they don't really want to put you in jail. They just want your money. Oh, this guy? After getting his sweet deal he didn't actually pay them. I think he may end up in jail.