IRS Plays Cat and Mouse With Tax Court on Its Constitutional Status

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Frequent guest blogger Carl Smith provides an update on what’s happening at the Tax Court and the Supreme Court in Kuretski. Keith

The Supreme Court is scheduled to first consider whether to grant cert. in Kuretski v. Commissioner, 755 F.3d 929 (D.C. Cir. 2014), at its internal conference tomorrow, May 14.  Cases are often relisted for later conferences, so there is no certainty that tomorrow’s conference will definitively determine Kuretski‘s fate.  Kuretski is the case where the D.C. Circuit held that the President’s removal power over Tax Court judges at section 7443(f) does not violate the Separation of Powers because the President traditionally has the right to remove Executive Branch officers, and the Tax Court is an Executive Branch agency, not a court holding a portion of the judicial power of the United States.  That ruling is clearly in some tension with — perhaps even irreconcilable with (if you agree with the taxpayers’ lawyers, of whom I am one) — the Supreme Court’s ruling in Freytag v. Commissioner, 501 U.S. 868 (1991), that the Tax Court is one of the “Courts of Law” for purposes of the Appointments Clause because it has no Executive functions and exercises a portion of the judicial power of the United States.

As I noted in two posts from January of this year (found here and here), attorney Joseph A. DiRuzzo, III and his colleagues at Fuerst Ittleman David & Joseph, PL in Miami decided not to wait to see whether the Supreme Court grants cert. in Kuretski, and instead sought Tax Court vehicles to create a possible Circuit split on the issue presented in Kuretski in the not unlikely event cert. is not granted there. I had previously reported that Fuerst Ittleman lawyers had made pre-trial motions on the section 7443(f) issue in five Tax Court dockets.  As of today, they have made such motions in seven dockets.  This is to report a little gamesmanship going on at the IRS about these seven dockets:  To date, in none of the dockets has the IRS filed a response to the motions, and court-ordered responses are overdue in three dockets.


In four of the Tax Court dockets, the Tax Court judges assigned to the cases have not ordered the IRS to file responses to the section 7443(f) motions.  Perhaps these judges are not eager to address the issue.

But, in three dockets, 14604-12 (Meggs), 17784-12 (Battat), and 24872-14L (Elmes), Chief Judge Thornton had ordered the IRS to file responses to the motions by March 9 (a generous amount of time).  The IRS later sought an additional extension of time to respond until May 8 (this past Friday) — citing the need to coordinate the issue at the highest levels of Counsel.  Judge Thornton granted those motions to extend the time to respond.

On April 2, the Solicitor General filed his opposition to a grant of cert. in Kuretski.  See blog post of April 8 for the text.  In the response, the Solicitor General agreed with the D.C. Circuit that the Tax Court is really still an Executive Agency, not a court holding a portion of the judicial power of the United States.

You would think that, having expressed its position to the Supreme Court, the government would now be willing to state the same position to the Tax Court.  But, you would be wrong.

Last Wednesday (May 6), the IRS filed motions in the three dockets for a second extension to file responses to the taxpayers’ motions concerning section 7443(f)’s constitutionality.  The IRS sought extensions to June 8 — a month.  The ground for the extensions was that the Supreme Court would likely decide on the Kuretski cert. petition later this month — not that the IRS had not yet drafted the responses or needed more time or that the IRS was unaware of the Solicitor General’s position on the Tax Court.

Last Thursday (May 7), Fuerst Ittleman lawyers filed objections to these motions for further extensions of time to file responses.

As of the close of business Friday, May 8 — the due date for the responses, if the extension is not granted — the Chief Judge had issued no order concerning these second extension requests.  You would think, then, that by the close of business that day, the IRS would file its responses in the three dockets — having not yet obtained any further extension of Friday’s due date.  But, you would again be wrong.

Doing something that I have never seen it in my 30 years of practice, the IRS deliberately ignored the fact that it had not obtained a further extension of time to file the responses, and it filed none.  Indeed, as of the time of this post, the Tax Court has neither ruled on the IRS extension request motions nor has the IRS filed the required responses.

What’s going on here?

Obviously, the IRS doesn’t want to face the emotional repercussions of arguing to the Tax Court judges that they are mere appointees of an Executive Agency.  In Freytag and related litigation, the IRS never argued that the Tax Court was an Executive “Department”.  See First Western Government Securities v. Commissioner, 94 T.C. 549 (1990), affd. sub nom. Samuels, Kramer & Co. v. Commissioner, 930 F.2d 975 (2d Cir. 1991), where the IRS argued that the Tax Court was one of the “Courts of Law” under the Appointments Clause, but the DOJ, during the appeal, and in Freytag itself, argued that the Tax Court was, instead, an Executive “Department”. Then, in 2012 and 2013, the IRS refused to make any argument on the merits of the section 7443(f) motion in the Kuretski case (making instead only standing and justiciability arguments).  Only to the D.C. Circuit did the DOJ made the argument that the Tax Court was an Executive Agency.

I will keep you posted on further developments in Kuretski and the Fuerst Ittleman cases in the coming days.


Carlton Smith About Carlton Smith

Carlton M. Smith worked (as an associate and partner) at Roberts & Holland LLP in Manhattan from 1983-1999. From 2003 to 2013, he was the Director of the Cardozo School of Law tax clinic. In his retirement, he volunteers with the tax clinic at Harvard, where he was Acting Director from January to June 2019.


  1. Jason T. says

    Something more strange is afoot with the 7443(f) issue than what Carl reveals.

    If Chief Counsel followed Tax Court protocol, then it first sought the Fuerst Ittleman attorneys’ views on its time extension requests. And if those attorneys objected to those requests, Chief Counsel noted the objection in each of its motions. Why, then, did the Fuerst Ittleman attorneys need to file objections? In doing so, the firm has done its clients an extreme disservice.

    When it filed its objections, the Fuerst Ittleman attorneys chose to treat Carl’s presidential appointments argument as more important than the merits of their respective clients’ cases. The Tax Court will not deny Chief Counsel additional time to make what would be an important response to a sensitive issue. Even if it did, that would not mean the Tax Court would grant the Fuerst Ittleman attorneys’ dismissal motions.

    The conduct that the Fuerst Ittleman attorneys exhibited last week violates the concept of litigation fair play. They have now inclined the Tax Court to resolve any doubt on any issue against their clients.

    First DeGenova, now Fuerst Ittleman. Carl should be cautious because “a man is known by the company he keeps.”

    • Carl Smith says

      Jason T. does not know the underlying facts of these three cases or the strategy of the Fuerst Ittleman lawyers either in making these motions under section 7443(f) or opposing a second IRS extension to respond to them. Nor do I know the facts of the cases or the strategy for filing the motions or if there are any unstated reasons for opposing further extensions to respond. (I have only last week read both the IRS extension motions and the responses to those motions — both furnished to me by attorneys at Fuerst Ittleman.) So, it is not appropriate for Jason T. to condemn the actions of the Fuerst Ittleman lawyers.

      Further, it is common practice for the attorney for either side to object to repeated extension requests on filing dates — particularly to point out when no good reasons for extensions are stated. Remember here that, depending on the docket, 4 or almost 5 months’ time to respond has already been allowed by the Court (and with no objection by the taxpayers until this further extension request). And, even though the attorney making any motion notes the objection of the other side (as was done here), the person making the motion is not expected to (and here did not) explain the basis for the objection to the motion. It is normal for a person objecting to a motion to file a paper explaining the person’s reasons for the objection.

      Jason T. should not be using this forum for making personal attacks on lawyers.

  2. Jason T. says

    When one can read between the lines in a case, he has a duty to sound the alarm when he views any serious counsel missteps. His doing so credits the entire legal profession.

    Our clients are generally unable to hold us to account for our (in)actions. We must do ourselves that mutual favor. And I believe that fair adversarial litigation practice, and Tax Court Rule 50, bars the Fuerst Ittleman attorneys’ motion “strategy.”

    Carl tells us Chief Counsel’s time-extension motions properly noted the Fuerst Ittleman attorneys’ objections. Those motions therefore comply with Tax Court Rule 50(a). With knowledge that the petitioners object to the motions, the Tax Court MAY take action “after directing that a written response be filed.” Tax Court Rule 50(b)(1).

    As Rule 50 demonstrates, and as my experience reveals, it is not “normal” for a party to file an unsolicited motion objection. In fact, before electronic filing, it was not uncommon for the Tax Court clerk to return one as “premature.”

    There is no apparent reason for the Fuerst Ittleman attorneys to file unsolicited motion objections on such a sensitive issue as the Tax Court’s constitutional status. If there was one, then Carl would have at least been able to discern it and suggest it to us.

    I seek only to warn those involved about the train wreck that will likely arise from these 7443(f) cases. In other words, the Tax Court is unhappy now; the Fuerst Ittleman clients shall be unhappy later.

  3. George Smith says

    TC is an Article I tribunal that has limited judicial type powers, no different than a hearing under APA or could be. TC is part of the agency from which a petitioner can adjudicate further inside the agency if specific conditions are met i.e. notice of deficiency.

    Of course, TC is not judicial review either as defined in the APA as there is no final order to review and TC is not an Article III court from which judicial review can take place under APA. TC is simple an informal part of adjudication, the agency must still give the taxpayer a hearing under APA from which a final order can be produced which then could be judicial reviewed by an Article III, if desired. Not sure how the IRS can produce a final order when in most probability as status determination was never made nor notice given.

    Thompson exposed the problem/scam with the process in Thompson v. Comissioner (2004), in which a pro se refused to file tax returns, refused to give information and stood his ground, and easily won.

    TC was setup as an informal process to settle specific matters, not sure why these people think its an Article III court.

  4. Anonymous says

    Isn’t IRS in contempt of court?

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