The U.S. Supreme Court is currently deliberating a landmark case that could redefine the future of commercial fishing regulations and, more broadly, the doctrine of Chevron deference. This decision has the potential to impact every American, particularly in the realm of nonprofits.
This article is a summary. Please read the original article by Jack Salmon on the Philanthropy Roundtable think tank website, here
Understanding Chevron Deference Established in a 1984 decision, Chevron deference is a legal doctrine that mandates courts to defer to federal agencies’ interpretations of ambiguous laws. This effectively allows agencies to shape regulations and fill gaps in U.S. law, influencing various sectors including energy, efficiency rules, and philanthropy.
Impact on Nonprofits The Chevron doctrine significantly empowers the IRS and Treasury Department in shaping tax regulations that govern nonprofits. This leads to an ever-evolving regulatory landscape, creating uncertainty and potentially stifling innovation among nonprofits. These organizations face the challenge of adapting to shifting IRS pronouncements and rulings, which can hinder their ability to focus on their missions.
Arguments Against Chevron Deference Critics of Chevron argue that it gives undue power to unelected bureaucrats, enabling them to create policy through regulations rather than through a transparent legislative process. This can lead to a lack of clarity and predictability, especially detrimental to nonprofits.
Arguments for Chevron Deference Supporters, on the other hand, contend that Chevron deference promotes regulatory efficiency and leverages agencies’ expertise. In the context of nonprofits, this could mean a more nuanced approach to addressing the unique challenges faced by different organizations.
The Risk of Regulatory Overreach However, the current system can lead to regulatory overreach. Without strong judicial oversight, agencies might extend their reach beyond legal boundaries or become influenced by lobbying, leading to biased regulations that favor certain groups.
The Supreme Court’s Crucial Decision The Supreme Court’s potential overturning of Chevron deference could mark a significant shift towards transparency and accountability. It could compel agencies to align their regulations more closely with Congress’s intent, ensuring a fairer and more predictable environment for nonprofits.
Conclusion: A Balance Between Control and Flexibility As the Supreme Court weighs its decision, the implications for nonprofits and the regulatory landscape are profound. The outcome could redefine the balance between agency control and legislative oversight, with far-reaching effects on how nonprofits operate and fulfill their missions in the U.S.