Statutory Interpretation as a Continuum and Equipoise in the Continuum (12/20/25)

Continuing on my exploration of AI (I am still a novice), I asked several AI tools about ambiguity and continuum of confidence in statutory interpretation as a way to think about when ambiguity does not permit a court to determine the best interpretation to the required confidence level (in percentages say 51%, 60%, 67%, etc.). I offer here the best of the AI outcomes (from MS CoPilot) with both text and footnotes indented and then make a few comments.

Below is a polished, law‑review‑style Part II that builds naturally on your Part I. It is structured, argumentative, and footnoted in proper Bluebook form. If you want, I can later add subparts (A, B, C), case studies, or integrate it into a full article.

II. The Ambiguity Continuum in Judicial Practice

Courts frequently describe statutory text as either “clear” or “ambiguous,” but this binary framing masks the far more nuanced reality of interpretive practice. In actual adjudication, judges encounter not a dichotomy but a continuum of ambiguity, ranging from provisions whose meaning is overwhelmingly apparent to those whose linguistic indeterminacy leaves multiple interpretations equally plausible.¹ Judicial methodology—whether textualist, purposivist, or something else—does not eliminate this continuum; rather, it structures how judges navigate it. Understanding this spectrum is essential to explaining why interpretive disputes persist even when judges purport to apply the same tools.

A. The Myth of Binary Clarity

The conventional judicial rhetoric of “plain meaning” suggests that statutory clarity is a threshold condition: either the text speaks for itself or it does not.² Yet linguistic theory and empirical studies of judicial behavior demonstrate that clarity is rarely self‑evident.³ Even seemingly straightforward provisions often contain latent ambiguities that become visible only when applied to specific factual contexts.⁴ As Justice Kagan has observed, “we’re all textualists now,” but textualism itself requires judges to make fine‑grained judgments about how much clarity is enough.⁵

These judgments are not mechanical. They depend on context, background assumptions, and the judge’s own interpretive priors.⁶ A provision may appear clear to one judge because she reads it against a particular linguistic or structural backdrop, while another judge—equally committed to textual fidelity—may find the same provision ambiguous.⁷ The very act of declaring a statute “clear” is thus an interpretive conclusion, not an objective fact.

B. Degrees of Ambiguity and the Use of Interpretive Tools

As ambiguity increases along the continuum, courts predictably rely more heavily on interpretive tools to resolve uncertainty. Textual canons, for example, function as probability‑adjusting heuristics: they shift the likelihood of one interpretation over another by appealing to linguistic conventions, structural coherence, or background norms.⁸ Legislative history, when used, serves a similar function by providing additional evidence about how Congress likely understood the statutory language.⁹ Substantive canons—such as the rule of lenity, the presumption against retroactivity, or federalism clear‑statement rules—operate at the far end of the continuum, where ambiguity is so deep that ordinary interpretive tools fail to produce a dominant reading.¹⁰

Conservation Easement Case Set for Trial Only on Valuation (and No Other Issue) with No Post-Trial Briefs (12/29/25)

I note that today, among the orders released, the following Order was issued setting a trial of the valuation issue (and no other issue) in a conservation easement case. (I copy and paste the full order below, but readers may access the original order for case # 8669-20, here, at docket entry 86.)

Since gross overvaluation is the common flaw of many bullshit tax shelters, Judge Lauber is cutting to the chase. Any other flaws in the legal structure of the shelter may not matter after this limited trial.

The wording of the order to reject post-trial briefs suggests that Judge Lauber will issue a bench opinion. See Tax Court Rejects a Bullshit Tax Shelter False Valuation Claim with Warning of Sanctions for Taxpayers, their Counsel, and Expert Witness Proffering the Bullshit (7/16/25; 9/10/25), here. As suggested in that prior blog, one issue that may arise is whether the petitioner’s submission of a bullshit valuation may draw sanctions.

United States Tax Court
Washington, DC 20217

MORGAN RUN PARTNERS, LLC,
OVERFLOW MARKETING, LLC, TAX
MATTERS PARTNER,

Petitioner

v.

COMMISSIONER OF INTERNAL
REVENUE,

Respondent

Docket No. 8669-20.

Brockman Civil Case with Civil Fraud Penalties Settled (12/26/25)

 I have written before on the Brockman multi-year tax evasion scheme. See here. Brockman was indicted but, before he could be tried, he died, thereby resolving the criminal case without a verdict of guilty or not guilty.

The civil case was settled with entry of the Tax Court decision in Brockman Estate v. Commissioner (T.C. Case No. 764-22 Dkt. # 33 Order Dtd. 12/23/25), here. The decision document addresses the deficiencies and civil fraud penalties under § 6663. As is the nature of decision documents, the decision document does not address the interest on the tax and the penalties. The principal amounts of deficiencies and penalty are major, aggregating $750 MM; the interest which I roughly calculate to 12/24/25 at $782MM brings the total due to over $1.5 billion. I prepared a spreadsheet which I offer for review and download here. (Note that the interest calculations are rough and ready but should be in the ballpark.)

One small error in the Tax Court decision document is that the 2006 civil fraud penalty (§ 6663) is stated as $35,00,000.00 which I infer to be $35,000,000.00.

Obviously, given the numbers in the spreadsheet there is a facial anomaly because for the years 2006 and 2015 the civil fraud penalty amount exceeds 75% of the deficiency. I suppose there can be an explanation. There was a jeopardy assessment which may have applied some of the tax, but more likely there may have been an advance payment(s) that reduced the deficiency amounts (but not the civil fraud penalty amount). I just have not dug into that issue.

This blog entry is cross-posted on my Federal Tax Crimes Blog here.

IRS Seeks Comments on Proposed Revisions to Voluntary Disclosure Procedure (12/23/25)

 On December 22, 2025, the IRS opened a 90-day public comment period, ending March 22, 2026, for proposed updates to its Voluntary Disclosure Practice. See IRS seeks public comment on Voluntary Disclosure Practice proposal (12/22/25), here. The indicated updates are short, so I will not summarize them here.

I mention the items that drew my particular interest with some comments as appropriate:

1. Pay all applicable taxes, penalties, and interest in full within 3 months of conditional approval. Previously, as I understood it, the VDP permitted the taxpayer to undergo IRS processes for installment payments or perhaps even compromise. The update requires full payment.

2. As before “The disclosure period will generally cover the most recent six years for delinquent and amended returns (the “Disclosure Period”).”

3. Taxpayers must start the process by submitting “Form 14457, Voluntary Disclosure Practice Preclearance Request and Application” where they "identify all years of noncompliance and provide a full and accurate description of the taxpayer’s willful noncompliance.” Note that, as stated, the disclosure of all years is not limited to the “Disclosure Period” as defined. The Form 14457 is now required, so this is not a change. I mention it because the Form itself seems to tie the disclosures to the Disclosure Period. See e.g., Instructions for “Line 3. Tentative years for which you are making the disclosure. See infra regarding determination of disclosure period.” Is the IRS really going to require all periods of willful noncompliance, even if prior the noncompliance in the Disclosure Period and even outside the normal criminal statute of limitations of six-years. Maybe.