This article will first examine the evolution of the rule of law by examining the conceptual frameworks proposed by scholars to analyze the rule of law. The foundations of the rule of law taken from these scholars will be condensed into several principles applicable to modem tax law. These principles will then be used to illustrate how both discretion and adherence to the written law are necessary in order to promote a workable system of tax law promulgation, administration, and interpretation. The next section of this article will examine §446 of the Internal Revenue Code and the Commissioner's clear reflection of income power contained therein. This section will illustrate the status of the clear reflection power as it is defined in the law, the judiciary, and used by the Commissioner today.

Section four will examine the judicial review of the Commissioner's determinations under §446 using the abuse of discretion standard. The fifth section will determine whether the rule of law has been unjustifiably compromised with respect to the Commissioner's clear reflection of income power. Section five will then make arguments for and propose an alternative standard of review for the Commissioner's clear reflection of income powers. Section six discusses the implications for a change in the standard of review for clear reflection of income cases and analyzes the benefits and burdens of returning power to the judicial branch. Finally, the article will conclude with thoughts on the rule of law and how it can be best served through the system of internal revenue under §446.

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