Statutes mean what they say. As the late Justice Scalia once quipped, the proper role of the courts "is to apply the text, not to improve upon it." However, revenue departments will oftentimes take positions contrary to the clear and unambiguous meaning of tax statutes that "begin to look like efforts at text avoidance." This "text avoidance" employed by many revenue departments is contrary to law and is bad tax policy. Taxpayers should take note and not allow themselves to be intimidated by revenue departments that ignore the clear and unambiguous language of a statute.

Revenue departments have argued that courts should not apply the plain language of a tax statute because application of the statute's unambiguous words in a particular case results in lower taxes due. Therefore, the States argue, the statute's language purportedly contravenes the intent or the overall purpose of the law. However, when a taxpayer follows the clear and unambiguous words of the law, i.e., does what the statute says to do, the ending result should not be avoided. Furthermore, there is no rightful place for penalties in such circumstances.

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Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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