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Professor Lawrence Zelenak's recent Article provides an excellent analysis of the relevant issues and their treatment in a tax regime in which gains and losses are recognized at gifttime and deathtime transfers.' I have argued for the same policy change, suggesting further the repeal of the wealth transfer tax system altogether and possibly the repeal of Section 1022 to require the inclusion in recipients' gross income of gifts, bequests, devises, and inheritances.' Still further, in agreement with Professor Zelenak, I would retain the present concepts of the marital deduction, unlimited charitable deduction for deathtime transfers, and some minimum exemption that would be indexed for inflation. Under present legislative rubrics, any proposed Code amendments resulting in revenue reductions must be "paid for" with other amendments. The transfer tax system is approximately a twelve billion dollar revenue gainer. Revenue estimates vary on the amount that would result from taxing net gains on gifttime and deathtime transfers; assume for purposes of the present discussion that rules could be fashioned to produce more than twelve billion dollars to offset the revenue loss if the wealth transfer tax system were eliminated. Moreover, if Section 102 were repealed, the revenue gains would, of course, be substantially greater.

This Article questions the tax policy model that the Court articulated in Bob Jones University. The authors believe that the Court's recognition of the primacy of IRS rule making is undesirable because the IRS, as an executive agency, is susceptible to the influence of the incumbent administration's policy objectives. Further, even though the life-tenured status of judges insulates the courts from external political pressures, significant problems a real so present in a model in which the courts occupy a primary role in formulating tax policy. In sum, Congress is better suited than either the courts or the IRS to determine tax policy because it is institutionally organized to gather social and economic data, to define policy objectives, and to legislate to achieve these objectives,which often have repercussions beyond the circumstances of a particular case. This Article's criticism of Bob Jones University also extends to the Court's "public benefit" and "common community conscience" standards for charitable organizations seeking to qualify for tax exemptions. Although restrictive standards suggest that a tax exemption is a form of government aid, the Court declined to make this holding explicitly. Moreover, the majority's recognition of the IRS's broad rule making authority seems inconsistent with the "community conscience" standard, for in the exercise of its broad administrative discretion the IRS need not strictly follow this standard. Finally and most significantly, the "public benefit"and "community conscience" standards may discourage organizations that provide a healthy diversity of views in a pluralistic society. This Article begins with a general discussion in part IE of the role of the courts in the development of federal tax policy.' A critical analysis of the Bob Jones University decision--focusing upon both the specific tax exemption issue and the Court's general model for tax policy decision making--follows in part III." Part IV concludes the Article with a recommendation that Congress act ...