Battat v. Comm'rBattat v. Comm'r
Ps filed a motion to disqualify all Tax Court Judges and to declare unconstitutional
In the Tax Reform Act of 1969 (1969 Act), Pub. L. No. 91-172, sec. 951, 83 Stat. at 730, Congress deleted from
Held: Under the Rule of Necessity, it is proper for a Tax Court Judge to rule on Ps’ contention that
Held, further, Presidential authority to remove Tax Court Judges for cause does not violate separation of powers princiрles. We so hold because, while Tax Court Judges exercise a portion of the judicial power of the United States, Freytag v. Commissioner, 501 U.S. 868, 890-891 (1991), its Judges exercise no portion of the judicial power reserved to Article III judges. Thus, Presidential removal authority cannot interfere with the Article III judicial power regardless of the Tax Court’s placement in the branches of Government.
Held, further, Ps’ motion will be denied.
Joseph A. DiRuzzo, III, Jennifer Correa Riera, Christopher J. Rajotte, and Jeffrey J. Molinaro, for petitioners.
Brian A. Pfeifer, for respondent.
OPINION
In the Background section, we describe: (A) procedures for the removal of Tax Court Judges; (B) statutory provisions governing the Tax Court and the Supreme Court’s opinion in Freytag v. Commissioner, 501 U.S. 868, 891 (1991); (C) caselaw relating to the jurisprudence and status of the Tax Court; and (D) Kuretski v. Commissioner, 755 F.3d 929, 943-945 (D.C. Cir. 2014), aff’g T.C. Memo. 2012-262, and the congressional response to Kuretski. In the Discussion section, we conclude that: (A) under the Rule of Necessity, it is proper for a Tax Court Judge to rule on petitioners’ motion; (B) procedures for the removal of Tax Court Judges for causе do not violate separation of powers principles; and (C)
Background
Petitioners resided in Florida when they filed the petition.
A. Procedures for the Removal of Tax Court Judges
Section 7443(f) authorizes the President to remove Judges of the Tax Court “after notice and opportunity for public hearing, for inefficiency, neglect of duty, or malfeasance in office, but for no other cause”. The predecessor of section 7443(f) was first enacted as part of the Revenue Act of 1924 (1924 Act), ch. 234, sec. 900(b), 43 Stat. at 336-337.3
In 2015 Congress extended the judicial conduct and disability procedures of
B. Statutory Provisions Relating to the Establishment and Status of the Tax Court
1. 1924 to 1968
Congress created the Board of Tax Appeals in 1924 to permit taxpayers to challenge determinations made by the Internal Revenue Service (IRS) of their tax liabilities before payment.5 The Revenue Act of 1924 provided that “[t]here is hereby established a board to be known as the Board of Tax Appeals” and “[t]he Board shall be an independent agency in the executive branch of the Government.” Revenue Act of 1924, ch. 234, sec. 900(a), (k), 43 Stat. at 336, 338 (emphasis added).
In 1926 Congress made various statutory changes with respect to the Board of Tax Appeals, but the statute continued to provide that the Board of Tax Appeals is “an independent agency in the Executive Branch of the Government.” Revenue Act of 1926, ch. 27, sec. 900, 44 Stat. at 105-106 (emphasis added). In 1939
The Board of Tax Appeals * * * shall be continued as an independent аgency in the Executive Branch of the Government. The Board shall be known as the Tax Court of the United States and the members thereof shall be known as the presiding judge and the judges of the Tax Court of the United States. [Revenue Act of 1942, ch. 619, sec. 504(a), 56 Stat. at 957; emphasis added.]
That provision was also included in section 7441 of the Internal Revenue Code of 1954, which provided as follows:
The Board of Tax Appeals shall be continued as an independent agency in the Executive Branch of the Government, and shall be known as the Tax Court of the United States. The members thereof shall be known as the chief judge and the judges of the Tax Court.” [Internal Revenue Code of 1954, ch. 76, sec. 7441, 68A Stat. at 879; emphasis added.]
In Dobson v. Commissioner, 320 U.S. 489 (1944), the Supreme Court held that, because the Tax Court was (at that time) an administrative body within the executive branch, decisions of the Tax Court on questions of fact were not reviewable if supported by any evidence in the record. Dobson was legislatively
2. Tax Reform Act of 1969
In the Tаx Reform Act of 1969 (1969 Act), Pub. L. No. 91-172, 83 Stat. 487, Congress “transformed” the Tax Court, Freytag v. Commissioner, 501 U.S. at 890-891, through two amendments to section 7441. First, Congress amended section 7441 to designate the Tax Court as an Article I court. As a result, section 7441 provided: “There is hereby established, under Article I of the Constitution of the United States, a court of record to be known as the United States Tax Court. The members of the Tax Court shall be the chief judge and the judges of the Tax Court.” 1969 Act sec. 951, 83 Stat. at 730. Second, Congress amended section
In its report accompanying the 1969 Act,8 the Senate Committee on Finance said:
Since the Tax Court has only judicial duties, the committee believes it is anomalous to continue to classify it with quasi-judicial executive agencies that have rulemaking and investigatory functions. * * * [I]ts constitutional status as an executive agency, no matter how independent, raises questions in the minds of some as to whether it is appropriate for one executive agency [the pre-1969 tribunal] to be sitting in judgment on the determinations of another executive agency [the IRS].
* * * * * * * The amendments are also concerned with making the Tax Cоurt an Article I court rather than an executive agency and expanding its powers accordingly. * * *
[S. Rept. No. 91-552, supra at 302-303, 1969-3 C.B. at 614-615; H.R. Conf. Rept. No. 91-782 (1969), 1969-3 C.B. 644, 645 (“The conference substitute * * * follows the Senate amendment.”).]
Thus, the Senate Committee on Finance intended that the Tax Court no longer be classified “with” executive branch agencies. S. Rept. No. 91-552, supra at 302, 1969-3 C.B. at 614.9
In 1969 Congress also amended section 7456 to provide Tax Court Judges with the “quintessentially judicial” power, Freytag v. Commissioner, 501 U.S. at 891, to punish contempt of court by fine or imprisonment and provided that the Tax Court has “such assistance in the carrying out of its lawful writ, process,
As stated supra pp. 7-8, in the 1969 Act Congress deleted the designation of the Tax Court as an “independent agency in the Executive Branch of the Government”. The only amendment needed if Congress had intended to establish the Tax Court as an Article I court located in the executive branch would have been deletion of the words “as an independent agency”. If only those words had been deleted, section 7441 would have said the Tax Court “shall be continued * * * in the Executive Branch of the Government”. But that is not what Congress did. Congress also deleted from section 7441 the words “in the Executive Branch of the Government”. That additional change would have been superfluous if Congress had intended for the Tax Court to remain within the executive branch. The deletion of words is properly considered in determining the meaning of
It is clear from the statutory language and the Senate Committee report * * * that Congress removed the Tax Court from the Executive Branch and established it as an article I court primarily for the purpose of recognizing its status as a judicial body and disposing of any problems that its status as an executive agency sitting in judgment on another executive agency might pose. [Burns, Stix Friedman & Co. v. Commissioner, 57 T.C. 392, 395 (1971); citation omitted.]
Thus, soоn after the repeal by the 1969 Act of the statute designating the Tax Court as within the executive branch, we observed that, under the 1969 Act, the Tax Court was no longer within the executive branch.
In Freytag v. Commissioner, 501 U.S. at 887-888, the Supreme Court upheld the authority of the Chief Judge of the Tax Court under section 7443A(a) to appoint Special Trial Judges12 because the Chief Judge of the Tax Court is the head of one of the “Courts of Law” and is not one of the “Heads of Departments” for purposes of the Appointments Clause under Article II.13 In Freytag, the Supreme Court observed that the Tax Court exercises a portion of the judicial power of the United States, does not exercise “executive, legislative, or administrative” power, “remains independent of the Executive and Legislative Branches”, and closely resembles U.S. District Courts in its function and role in the Federal judicial scheme. Id. at 890-892. After concluding that the Tax Court
Having concluded that an Article I court, which exercises judicial power, can be a “Cour[t] of Law” within the meaning of the Appointments Clause, we now examine the Tax Court functions to define its constitutional status and its role in the constitutional scheme. See Williams, 289 U.S. at 563-567. The Tax Court exercises judicial, rather than executive, legislative, or administrative, power. It was established by Congress to interpret and apply the Internal Revenue Code in disputes between taxpayers and the Government. By resolving these disputes, the court exercises a portion of the judicial power of the United States.
The Tax Court exercises judicial power to the exclusion of any other function. It is neither advocate nor rulemaker. As an adjudicative body, it construes statutes passed by Congress and regulations promulgated by the Internal Revenue Service. It does not make political decisions.
The Tax Court’s function and role in the federal judicial scheme closely resemble those of the federal district courts, which indisputably are “Courts of Law.” Furthermore, the Tax Court exercises its judicial power in much the same way as the federal district courts exercise theirs. It has authority to punish contempts by fine or imprisonment,
26 U.S.C. § 7456(c) ; to grant certain injunctive relief, § 6213(a); to order the Secretary of the Treasury to refund an overpayment determined by the court, § 6512(b)(2); and to subpoena and examine witnesses, order production of documents, and administer oaths, § 7456(a). All these powers are quintessentially judicial in nature.
The Tax Court remains independent of the Executive and Legislative Branches. Its decisions are not subject to review by either the Congress or the President. Nor has Congress made Tax Court decisions subject to review in the federal district courts. Rather, like the judgments of the district courts, the decisions of the Tax Court are appealable only to the regional United States courts of appeals, with ultimate review in this Court.14 The courts of appeals, moreover, review those decisions “in the same manner and to the same extent as decisions of the district courts in civil actions tried without a jury. § 7482(a). This standard of review contrasts with the standard applied to agency rulemaking by the courts of appeals under § 10(e) of the Administrative Procedure Act, 5 U.S.C. § 706(2)(A) . See Motor Vehicle Mfrs. Assn. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43-44 (1983).The Tax Court’s exclusively judicial role distinguishes it from other non-Article III tribunals that perform multiple functions and provides the limit on the diffusion of appointment power that the Constitution demands. * * *
The Supreme Court’s analysis of the Tax Court in Freytag may be contrasted with its analysis of the Court of Appeals for the Armed Forces (until 1994 known as the U.S. Court of Military Appeals) in Edmond v. United States, 520 U.S. 651 (1997). Both the U.S. Court of Appeals for the Armed Forces and the Tax Court are courts of record established under Article I, sec. 7441,
4. Other Statutory Changes
The Ethics Reform Act of 1989, Pub. L. No. 101-194, sec. 601(a), 103 Stat. at 1760, 1761, provides that the Judicial Conference of the United States (Judicial Conference) is the supervising ethics authority for “officers and employees of the judicial branch”. Tax Court Judges are included in the definitions of “judges” and
From 2006 to 2015 several provisions were enacted which further distance the Tax Court from any association with the executive branch and bolster the Tax Court’s “quintessentially judicial” powers and design. Freytag v. Commissioner, 501 U.S. at 890. In 2006 section 6214 was amended to permit the Tax Court to apply the doctrine of equitable recoupment20 to the same extent that it may be applied in Federal civil tax cases by the U.S. District Courts or the U.S. Court of Claims. Pension Protection Act of 2006, Pub. L. No. 109-280, sec. 858, 120 Stat. at 1020; S. Rept. No. 109-336, at 97 (2006).
In 2011 section 7471(a) was amended to authorize the Tax Court to establish a personnel system similar to the personnel system for employees of Article III courts. Act of Jan. 4, 2011, Pub. L. No. 111-366, sec. 1(a), 124 Stat. at 4063. Section 7471(a)(4) provides in pertinent part that “[t]o the maximum extent
The 2015 Act22 added several provisions aрplicable to the Tax Court and relevant here. First, section 7453 was amended to provide that “the proceedings of the Tax Court and its divisions shall be conducted in accordance with * * * the Federal Rules of Evidence.” 2015 Act, div. Q, sec. 425, 129 Stat. at 3125. As a result of the 2015 Act, the Tax Court, which has applied the Federal Rules of
Second,
Finally,
The trend in the evolution of the Tax Court‘s governing statutes from 1969 to 2015 is clear: Congress has continued to provide authority and design to the Tax Court more like those of other Federal courts and to distance the Tax Court from any operational or structural similarity to agencies within the executive branch.
C. Caselaw Relating to the Jurisprudence and Status of the Tax Court
The case or controversy requirement under Article III presumptively applies in the Tax Court. Antolick v. Commissioner, 422 F. App‘x 859, 860-861 (11th Cir. 2011); Charlotte‘s Office Boutique, Inc. v. Commissioner, 425 F.3d 1203, 1211 n.7 (9th Cir. 2005) (“[L]imitations imposed upon Article III courts, such as the existence of an actual case or controversy, have been presumptively applied to
The Tax Court has jurisdiction to decide constitutional disputes arising in cases over which it has jurisdiction. Estate of Brandon v. Commissioner, 828 F.2d 493, 499 (8th Cir. 1987) (remanding the case to the Tax Court to consider the constitutionality of an Arkansas dower statute), rev’g 86 T.C. 327 (1986), remanded to Estate of Brandon v. Commissioner, 91 T.C. 829, 835 (1988) (holding a gender-based Arkansas statute unconstitutional in the light of, for example, Frontiero v. Richardson, 411 U.S. 677 (1973)); Rager v. Commissioner, 775 F.2d 1081, 1083 (9th Cir. 1985) (“[W]e have often upheld Tax Court decisions which were based on a constitutional inquiry.“), aff’g T.C. Memo. 1984-563; see also Crawford v. Commissioner, 266 F.3d 1120, 1122-1123 (9th Cir. 2001) (deciding a separation of powers issue relating to Special Trial Judges), aff’g T.C. Memo. 1999-361; Wiggins v. Commissioner, 904 F.2d 311, 314 (5th Cir. 1990) (holding retroactive application of a statute constitutional), aff’g 92 T.C. 869, 871-872 (1989).
Tax Court opinions are subject to stare decisis. Smith v. Commissioner, 926 F.2d 1470, 1479 (6th Cir. 1991) (“We are not unmindful of the heavy burden placed upon the tax court by the doctrine of stare decisis and that any decision to depart from the doctrine requires ‘special justification.‘“), aff’g 91 T.C. 1049 (1988); see also Estate of Maxwell v. Commissioner, 3 F.3d 591, 599 (2d Cir. 1993) (Walker, J., dissenting) (“It is well established that the Tax Court is governed by the doctrine of stare decisis. * * * Indeed, the doctrine applies with special force in the tax context, given the important reliance interests involved.” (the majority in Estate of Maxwell did not dispute this point)), aff’g 98 T.C. 594 (1992); Sec. State Bank v. Commissioner, 111 T.C. 210, 213-214 (1998), aff’d, 214 F.3d 1254 (10th Cir. 2000); Hesselink v. Commissioner, 97 T.C. 94, 99-100 (1991). This well-established feature of American courts, see, e.g., Hilton v. S.C. Pub. Rys. Comm‘n, 502 U.S. 197, 202 (1991) (“Time and time again, this Court has recognized that ‘the doctrine of stare decisis is of fundamental importance to the rule of law.’ * * * [W]e will not depart from the doctrine of stare decisis
Tax Court Judges have immunity from liability for damages for acts committed within their judicial jurisdiction to the same extent as Article III judges and State court judges instead of the more narrow form of immunity provided for executive branch officials. Chisum v. Colvin, 276 F. Supp. 2d 1, 3 (D.D.C. 2003) (Tax Court Judges) (citing Mireles v. Waco, 502 U.S. 9, 9-10 (1991) (per curiam) (State court judges), and Pierson v. Ray, 386 U.S. 547, 553-554 (1967) (municipal judges)). In contrast, executive branch employees have limited immunity from lawsuits challenging actions taken in the course of their official duties, such as
D. Kuretski v. Commissioner and Section 7441 as Amended in 2015
In Kuretski v. Commissioner, 755 F.3d at 943-945, the taxpayer contended that the President‘s authority under
There is hereby established, under article I of the Constitution of the United States, a court of record to be known as the United States Tax Court. The Tax Court is not an agency of, and shall be independent of, the executive branch of the Government. The members thereof shall be known as the chief judge and the judges of the Tax Court. [2015 Act, div. Q, sec. 441, 129 Stat. at 3126; emphasis added.]
concerned that statements in Kuretski v. Commissioner may lead the public to question the independence of the Tax Court, especially in relation to the Department of Treasury or the Internal Revenue Service. The Committee wishes to remove any uncertainty caused by Kuretski v. Commissioner, and to ensure that there is no appearance of institutional bias. [S. Rept. No. 114-14, at 10, accompanying S. 903.]
The Court of Appeals in Kuretski v. Commissioner, 755 F.3d at 932, said the Tax Court “exercises executive authority as part of the Executive Branch.” In contrast, the Supreme Court in Freytag v. Commissioner, 501 U.S. at 891, said the Tax Court exercises exclusively judicial power and does not exercise executive, legislative, or administrative power.30 The Court of Appeals in Kuretski v. Commissioner, 755 F.3d at 943-944, made no constitutional distinction between the Tax Court and independent executive branch agencies even though, unlike the Tax Court, independent executive branch agencies exercise executive power under
In considering the relationship between independent executive branch agencies and other executive branch agencies, the Court of Appeals in Kuretski v. Commissioner, 755 F.3d at 944, said that Congress may allow independent executive branch agencies “a measure of independence from other executive actors“. Presumably, “a measure of independence” means less than total independence. If the Tax Court were in the executive branch, the relevant “other executive actor” would be the IRS. Surely any taxpayer would find it repugnant if
According to the specific text added to section 7441 in 2015, particularly in contrast to the opinion of the Court of Appeals in Kuretski, it appears that in 2015 Congress emphasized the Supreme Court‘s characterization of the Tax Court in Freytag and Congress’ own characterization of the Tax Court in the legislative history of the 1969 Act as independent of the executive branch. Specifically, by providing that the Tax Court is not an executive agency and is independent of the executive branch, the 2015 amendment to section 7441 in substance codifies the following language in the 1969 Finance Committee report, i.e.: “The committee believes it is anomalous to continue to classify * * * [the Tax Court] with quasi-judicial executive agencies“. The 2015 amendment to section 7441 also codifies a clause from the Supreme Court‘s opinion in Freytag v. Commissioner, 501 U.S. at 891, i.e., “[t]he Tax Court remains independent of the Executive * * * Branch[es]“.
Discussion
Like the taxpayers in Kuretski, petitioners contend that the Tax Court is not within the executive branch and that the President‘s authority under section
A. Disqualification Is Not Required.
Petitioners seek rulings that all Tax Court Judges must recuse themselves from deciding any further cases because, according to petitioners, section 7443(f) is unconstitutional. We disagree here that recusal is required and below at Part B that section 7443(f) is unconstitutional.
Courts have occasionally been presented with issues in which all judges of the court have a conflict of interest or are alleged to be biased, and, because it is necessary for the work of the court to proceed, have not recused themselves. See United States v. Will, 449 U.S. 200, 213-216 (1980) (judicial salaries) (“The Rule of Necessity has been consistently applied in this country in both state and federal courts.“); Evans v. Gore, 253 U.S. 245 (1920) (taxation of judicial incomes), overruled by United States v. Hatter, 532 U.S. 557, 571 (2001); Guinn v. Finesilver, 48 F.3d 1232 (10th Cir. 1995); In re Complaint of Doe, 2 F.3d 308 (8th Cir. 1993) (recusal not required where a party sues judges who have heard that party‘s case); In re N.M. Nat. Gas Antitrust Litig., 620 F.2d 794, 795 (10th Cir. 1980); In re Va. Elec. Power Co., 539 F.2d 357, 360 (4th Cir. 1976) (utility rates); Cupp v. Commissioner, 65 T.C. 68, 86-87 (1975) (recusal not required in a Tax
The Rule of Necessity has been expressed through a maxim of law that where all are disqualified, none are disqualified. Evans, 253 U.S. at 252-255. We conclude that under the Rule of Necessity we may properly act on petitioners’ motion. There is indeed a necessity that we do so. Every case before us involves the issue that petitioners here present, and either we must suspend our activity in every case (thereby effectively granting petitioners’ motion), or we must go about our business (thereby effectively denying it). We cannot avoid thе question by the recusal of one Judge in the instant case.
B. Procedures for Removal of Tax Court Judges for Cause Do Not Violate Separation of Powers Principles.
In this part we conclude that regardless of the branch location of the Tax Court, provisions authorizing removal of Tax Court Judges are constitutional.
1. Public Rights Doctrine
Although it is universally understood that our system has three branches of Government, the U.S. Constitution does not use “branch” in that context. Instead of identifying three branches of Government, the text of the Constitution identifies three “Power[s]“--i.e., it vests “[a]ll legislative Powers * * * in a Congress”
Beyond what the Constitution expressly permits (such as appointment), Congress may not authorize the President to impede exercise by the Article III courts of “the judicial Power of the United States“.
Article III, section 1, vests the power to adjudicate certain disputes solely in courts whose judges have lifetime appointments. The scope of this exclusive judicial рower has been construed to be “matter[s] which, from * * * [their] nature, * * * [are] the subject of a suit at the common law, or in equity, or admiralty“; and
The adjudication of public rights disputes may, for example, be assigned by Congress to Article I judges. N. Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 73-74 (1982) (Brennan, J., plurality opinion). While the Tax Court exercises a portion of the judicial power of the United States, Freytag v. Commissioner, 501 U.S. at 890, it has jurisdiction to adjudicate only public rights disputes, see infra pp. 37-38, and thus does not exercise that portion of the judicial power that is reserved for Article III judges.
In considering the constitutionality of section 7443(f), the question that arises is: “Does providing to the President the authority to remove Tax Court Judges give the President any unconstitutional power to interfere with the Article III judicial power of the United States?” The answer is no; it gives the President no such unconstitutional power.
In Am. Ins. Co. v. 356 Bales of Cotton, 26 U.S. (1 Pet.) 511 (1828), the Supreme Court observed that Article IV bestowed upon Congress alone a comрlete power of government over territories not within the States and acknowledged Congress’ authority to create courts for those territories that are not
The Supreme Court has upheld the validity of statutes which authorize Article I courts and administrative agencies to decide public rights disputes. Id. at 67-68. In Murray‘s Lessee, 59 U.S. (18 How.) at 284, the Court stated: “[T]here are matters, involving public rights, which may be presented in such form that the judicial power is capable of acting on them, and which are susceptible of judicial determination, but which Congress may or may not bring within the cognizance of the courts of the United States, as it may deem proper.” Because the sovereign could not be sued at common law (under which the sovereign was immune), “public rights” cases against the Government are not among the “suit[s] at the common law, or in equity, or admiralty” that constitute the exclusive sphere of the Article III courts. Id. The Court later expanded on this as follows:
This [рublic rights] doctrine may be explained in part by reference to the traditional principle of sovereign immunity, which recognizes that the Government may attach conditions to its consent
to be sued. * * * But the public-rights doctrine also draws upon the principle of separation of powers, and a historical understanding that certain prerogatives were reserved to the political Branches of Government. The doctrine extends only to matters arising “between the Government and persons subject to its authority in connection with the performance of the constitutional functions of the executive or legislative departments,” * * * and only to matters that historically could have been determined exclusively by those departments * * *. The understanding of these cases is that the Framers expected that Congress would be free to commit such matters completely to nonjudicial executive determination, and that as a result there can be no constitutional objection to Congress’ employing the less drastic expedient of committing their determination to a legislative court or an аdministrative agency. [N. Pipeline Constr. Co., 458 U.S. at 67-68 (quoting Crowell v. Benson, 258 U.S. 22, 50 (1932)).]
The Supreme Court has not definitely established in all respects the distinction between public rights and private rights, see, e.g., Stern v. Marshall, 564 U.S. 462, 490 (2011); however, generally speaking, controversies “between the government and others” involve public rights and thus may be removed from Article III courts and delegated to Article I courts or administrative agencies for their determination, N. Pipeline Constr. Co., 458 U.S. at 69-70 (quoting Ex Parte Bakelite Corp., 279 U.S. 438, 451 (1929)).
The Tax Court‘s jurisdiction is limited to the adjudication of public rights disputes.33 The Tax Court decides only disputes between the sovereign and the
Separation of powers concerns may be implicated if Presidential removal power could interfere with “the constitutionally assigned mission of” the judicial branch. Mistretta v. United States, 488 U.S. 361, 411 n.35 (1989). But if the President sought to exercise the power to remove a Tax Court Judge, the President would not thereby be affecting any matter within the portion of the “judicial Power of the United States” that is necessarily exercised by Article III judges. The Tax Court handles no such matters, and the separation of powers is therefore not implicated.
Interbranch removal is not necessarily constitutionally impermissible. In Bowsher v. Synar, 478 U.S. 714 (1986), the Supreme Court considered whether the assignment by Congress to the Comptroller General of the United States (a legislative branch official, removable for cause by Congress) of certain executive functions (e.g., reducing spending by each agency in implementing a sequester) under the Balanced Budget and Emergency Deficiency Control Act of 1985 violated the doctrine of separation of powers. The Supreme Court held that Congress had violated separation of powers principles in providing that executive authority to an official subject to removal by the Congress. Id. at 735-736. However, in discussing its holding in Bowsher in a later case, the Supreme Court said: “Nothing in Bowsher, however, suggests that one Branch may never exercise removal power, however limited, over members of another Branch. Indeed, we already have recognized that the President may remove a judge who serves on an Articlе I court.” Mistretta, 488 U.S. at 411 n.35;35 McAllister v. United States, 141 U.S. 174, 185 (1891).
The authority of the President to remove only for cause, like the removal provisions upheld in Mistretta, Morrison v. Olson, 487 U.S. 654, 688 (1988), and Humphrey‘s Ex‘r v. United States, 295 U.S. 602, 630 (1935), is specifically crafted to prevent the President from exercising “coercive influence” over the public official who may be removed from office only for good cause. Mistretta, 488 U.S. at 411.
The removal statutes,
There is no statutory requirement that the President await action by or defer to action by the Judicial Conference in the removal of a Tax Court Judge. However, it appears reasonable to expect that, if the President were to consider a removal action under section 7443(f), there would at a minimum be interest in whether the Judicial Conference had found cause for removal. In any event, none of those issues arose before 2015 when the sole statutory provision relating to removal of Tax Court Judges referred to the President.
The Supreme Court has said that the terms “inefficiency“, “neglect of duty“, and “malfeasance” are very broad and could sustain removal for any number of actual or perceived transgressions. Bowsher, 478 U.S. at 728-730. However, even
C. Petitioners’ Request a Remedy Because of an Appearance of Bias.
In addition to voicing objections to section 7443(f), petitioners object to several features of Tax Court litigation, such as the burden of proof, sec. 7491; Welch v. Helvering, 290 U.S. 111 (1933); limitation of reimbursement of litigation costs, sec. 7430; the lack of jury trials, see Rule 74(c) (allowing the taking of depositions requested by one party without the consent of the other party only as an extraordinary procedure and when approved by the Court); Wickwire v. Reinecke, 275 U.S. 101, 105-106 (1929); Swanson v. Commissioner, 65 T.C. 1180, 1181, 1182 (1976). Petitioners contend that thesе features of Tax Court litigation are so flawed that the Tax Court should immediately suspend adjudication of all cases. Petitioners provide no legal justification (other than their
D. Conclusion
The Court of Appeals in Kuretski had available at least two alternative routes for deciding the taxpayer‘s contentions. First, it could have decided (as it did) that the Tax Court is within the executive branch, thus mooting the separation of powers issue. Alternatively, without reaching the branch issue, it could have decided whether interbranch removal violates separation of powers principles irrespective of the Tax Court‘s branch status.
We have the same choice in acting on petitioners’ motion. In contrast to the approach taken by the Court of Appeals in Kuretski, we hold in Part B, supra pp. 33-42, that Presidential authority to remove Tax Court Judges for cause does not violate sepаration of powers principles. We so conclude because, even though Congress has assigned to the Tax Court a portion of the judicial power of the United States, Freytag v. Commissioner, 501 U.S. at 890, the portion of that power assigned to the Tax Court includes only public law disputes and does not include matters which are reserved by the Constitution to Article III courts.
The 1969 Act sec. 951, 83 Stat. at 730, deleted from section 7441 the prior longstanding designation of the Tax Court as an “agency” and the provision that the Tax Court is “in the Executive Branch of Government“. The deletion of words is properly considered in determining the meaning of statutes. See Wells, 519 U.S. at 492-493.37 In Freytag the Supreme Court clearly stated the Tax Court‘s relationship to the three powers (executivе, legislative, and judicial) identified in the Constitution. That is, in defining the Tax Court‘s “constitutional status and its role in the constitutional scheme“, the Supreme Court said the Tax Court exercises only judicial power and does not exercise executive, legislative, or administrative
An appropriate order will be issued.
Notes
See also H.R. Conf. Rept. No. 91-782, at 341 (1969), 1969-3 C.B. 644, 682. This provision prevented inconvenience to the parties and the public by ensuring the continuity of cases pending before the Tax Court. It did not diminish the constitutional significance of the establishment of the Tax Court under Article I. Burns, Stix Friedman & Co. v. Commissioner, 57 T.C. 392, 395 (1971).The United States Tax Court established under the amendment made by section 951 is a continuation of the Tax Court of the United States as it existed prior to the date of enactment of this Act * * * no loss of rights or powers, interruption of jurisdiction, or prejudice to matters pending in the Tax Court of the United States before the date of enactment of this Act shall result from the enactment of this Act.
The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordаin and establish. The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour, and shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in Office.
[The President] * * * shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the Supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments. [
U.S. Const. art. II, sec. 2, cl. 2. ]
One of the purposes of this bill is to make it abundantly clear in the law that the Court of Military Appeals is a court, although it is a court under article I of the Constitution. There has been some claim that the court, having been put under the Department of Defense for administrative purposes, is in effect an administrative agency. If it had such status, it would not be able to question any of the provisions of the Manual for Courts-Martial since the manual had been promulgated by Presidential order. The bill makes it clear that the Court of Military Appeals is a court and does have the power to question any provision of the manual or any executive regulation or action as freely as though it were a court constituted under Article III of the Constitution. [H.R. Rept. No. 90-1480, at 2 (1968), 1968 U.S.C.C.A.N. 2053, 2054; in substantial accord S. Rept. No. 90-806, at 1-2 (1968).]