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Comment by cal1co | Hacker News Reader

An article like this is interesting from a research (meta-research?) perspective, but I think the lack of relevant case law (nobody seems to have ever been prosecuted) really undermines the usefulness.

It's easy for people (especially the kinds of people who gravitate towards engineering) to get all worked up about the necessary implications of the regulations as-written. But it's also important to remember that being facings consequences would require

A) The intentional action of either a state prosecutor or an injured private party B) The involvement of a human being as a judge to interpret the facts and applicable rules

When you look at it from that angle, it's obvious why organizations like META just do the research, imho.

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> It's easy for people (especially the kinds of people who gravitate towards engineering) to get all worked up about the necessary implications of the regulations as-written

I was once trying to figure out taxes owed on some RSUs granted in California that vested in North Carolina (and some other edge case that I can’t remember). Hoh boy. What a rabbit hole. I didn’t think the CPA that I hired to do my taxes handled it correctly, so I started digging into the tax laws and regulations. Couldn’t find anything that covered my specific case. So I started digging into court cases involving disputes over RSU taxes owed in North Carolina and found conflicting outcomes.

I brought what I had found back to the CPA who basically said something along the lines of: there is no absolute “rule” for what to do in this case like you’re looking for. We make a good faith effort to mirror what was done in similar prior situations, write a number down, and then forget about it unless you hear from the IRS.

Did not make me feel very confident about the legal system.

I think this illustrates an issue in common law systems in general. Contrary to what we’re taught in school about how actions are generally legal by default, and only illegal if a law has been passed to prohibit them, in reality, actions exist in a superposition of legal and illegal until someone challenges that position and a court finds out (subject to any appeals). You can only evaluate in practice whether something is legal based on copying others in similar situations. The further you get from the known outcomes the fuzzier this all becomes.

This tends to be something people encounter a lot around tax, complex business structures, and various international dealings where you’re more likely to end up in an edge case that hasn’t been well explored.

And it's worth emphasizing that this is a good thing.

Civil law systems (which are used in the non-English-speaking parts of Europe for example) don't have this property. In such systems, court precedents don't really exist, so if something isn't clearly defined by law, and there's no extremely ubiquitous legal interpretation that everybody seems to follow, you don't know whether it's legal or not.

For example, the Polish tax authority lets you ask for a tax interpretation for cases that aren't legally obvious, something that I believe the US would have handled via the court precedent system. It's not unusual for two people in identical situations to receive opposite rulings, and Those rulings are not binding on the authority that issued them.

In other words, you don't know how to handle your tax situation, you ask your tax authority, they tell you "hey, we're the tax authority, we're telling you to do x", you do x, they audit you, they say "this isn't clearly defined in law, we now believe you should have done y instead, here's your orange jumpsuit."

Individual tax interpretations are not binding (in the way that they don't alter the law, and they might be rescinded at any time), but they grant immunity from prosecution (art. 14k of tax law).

And eventual orange jumpsuit would be decided by the court, not tax authority.

It took me a while to accept that the law is not a consistent system with hierarchical top-down rules that can be used to determine legality in an unambiguous way.

If you're a software engineer and you're knee-deep in analyzing court cases to find out how to file some tax correctly, you're definitely overthinking it. The CPA was exactly correct.

Yeah but now I just switch my perspective from thinking of it as a formal deductive system to thinking of it as an optimization problem.

Chances are your CPA was not correct. CPAs routinely violate the law as a regular course of duty and the IRS is fine with it, even encourages it, because it gives them more revenue. If you are looking to go down a multi-year rabbit hole on this, then try to find the law that imposes any tax on __your__ domestic income.

(Hint* You can't)

Yes, that's right. It's a Bayesian Game and you are attempting to reduce risk to an acceptable level (not under paying) while minimizing loss (not over paying tax) with only partial information (what the results of a lawsuit would determine).

>...In the real world, people usually attempt to solve problems by forming hypotheses and then testing them against the facts as they know them. When the facts confirm the hypotheses, they are accepted as true, although subject to re-evaluation as new evidence is discovered. This is a successful method of reasoning about scientific and other empirical matters because the physical world has a definite, unique structure. It works because the laws of nature are consistent. In the real world, it is entirely appropriate to assume that once you have confirmed your hypothesis, all other hypotheses inconsistent with it are incorrect.

> In the legal world, however, this assumption does not hold. This is because unlike the laws of nature, political laws are not consistent. The law human beings create to regulate their conduct is made up of incompatible, contradictory rules and principles; and, as anyone who has studied a little logic can demonstrate, any conclusion can be validly derived from a set of contradictory premises. This means that a logically sound argument can be found for any legal conclusion.

The Myth of the Rule of Law:

https://drive.google.com/file/d/1I-JhqpU3_0r_HL06hP-5DABhEtG...

Thanks for the link! I have been thinking a lot about topics related to this lately and this looks like an interesting read. Skimming through it I might not agree with all the ideas of the author I very much welcome new ideas about how to organize our society and our legal system. I have especially been thinking about how the legal system is mostly fiction and what makes it work is not so much what the laws say and what the punishments are for breaking them, but rather our shared belief in the system. And I think this is problematic because it takes away our agency to imagine other ways of doing things, we think our current legal system is the only possible system because it has to be. Thoughts of anything else would cause a collapse.

I have also been thinking about how basing morality on following laws is a bad idea. You should not be afraid of breaking laws or rules if they are stupid. All of modern workers rights, women's rights, etc are based on brave people of the past that were not afraid of breaking stupid laws of their time, why should today be any different.

If you move from Germany to Brazil you might also hit edge cases.

Yes that is 2 different countries. But it is similar. States have their own laws.

You can't expect the law across 3 jurisdictions to work out every permutation and legislate for it. There are 52 (I guess more... lots of territories) * 51 permutations of moves so 2652 moves that are possible.

In addition you are talking RSUs and not some vanilla thing like claiming an expense.

This is addressed at a few different points in the article, I found this bit particularly insightful:

> So what happens in practice is politicians write a vague law. Bureaucrats turn that law into very detailed (but often still vague) specific rules. Those rules might or might not be “legal”, but nobody want to risk fighting them in court. If the regulations are particularly ridiculous or likely to be overturned if challenged, prosecutors may quietly stop bringing cases. But the regulations still sit there on the books. And people still usually pay attention to them, because why risk it?

I think the article did sufficient to talk about 'what would happen if one were prosecuted,' given that it's really hard to predict.

What I thought was missing was an acknowledgement of the circumstances that would cause a _prosecutor_ or _other litigant_ to decide to _bring an action to court._

Prosecutors are political, have limited resources, and are ultimately more or less accountable to electoral forces. Their prerogative is (almost) never going after every single person who does an action that is technically illegal. Factors like harm, the reputation of one's actions in their community, and their alignment with the political establishment are going to be considerations.

As written, I could see the article maybe deterring a particularly rules-abiding individual from running a potato-eating weight loss experiment with their roommates. I've seen friends and relatives get all wound up worrying about whether something is technically illegal in some marginal way.

Understanding the human factors in the pipeline between a potentially unlawful action and a consequence for it is really important. All the institutions that get anything done are keenly aware of them.

It is briefly mentioned in the notes at the end that nobody has seemingly ever been prosecuted for this, and the laws are primarily aimed at institutions doing shady stuff rather than individuals wanting to feed their friends potatoes. But yes, the focus definitely isn't on that side of things.

I don't think it's fair to call that a deficiency, though; both the letter of the law and the practical applications are complex and interesting topics in their own right(s?), and either could fill a lengthy article as we see here. Both are welcome! One doesn't preclude the other. I would be interested in reading an article covering what you describe too.

This specific quote from the article made me think of lawmaking - the more detailed the law the harder it is to pass (someone can always fine something to nitpick). Therefore, laws are best at establishing goals, principles, guide rails, etc. Nothing is perfect but the way in which laws are implemented SHOULD remain a separate part of the law passage.

Separate rant: I live on the west coast and am annoyed when I vote because of the number of ballot measures. None of them are sufficiently detailed and fall victim to vague language that's open to interpretation. I'd rather "hire" law makers to do the hard work of details law creation.

Some of that vagueness is intentional and not always for nefarious reasons either. When getting my the FCRA cert, there definitely a few requirements that were obviously very open ended so the gov could either pursue a potential unforeseen circumstance or not stifle business. The vagaries in laws has always been interesting to me. Unfortunately, I don't remember any definitive examples since I took the test years ago now.

Nah. There's no valid reason for lawmakers to delegate so much authority to bureaucrats. We should eviscerate the administrative state and if legislators want to prohibit something then they ought to specifically write it down. If that means it becomes harder and slower to pass new laws then that's fine. It should be a careful and deliberative process.

Violations of federal regulations (rules) are usually handled as administrative or civil matters. Prosecution is very rare and only possible for a limited set of rule violations. If you're contemplating doing something in a regulatory gray area then you can ask the competent agency for a formal opinion letter stating whether that thing would or wouldn't be a violation. They are required to issue those letters although it can be a slow process. Once you get an official approval letter that generally shields you against any sort of enforcement action.

> nobody seems to have ever been prosecuted

But they have been sued, sometimes for extraordinary amounts, as have their employers, corporate sponsors, etc. And they have lost funding for their research and the trust of everyone above (and of future IRBs). These are powerful disincentives.

Conversely, a social and “in practice” reason why government-funded institutions _do_ use IRBs is to allay fiscal hawks and criticism about state funding being misused.

Also, a great deal of the research organizations like META "just do" wouldn't pass muster with any IRB worth the name.

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