Where is the Tax Court located?

0 Flares Filament.io 0 Flares ×

Two academic LITCs have openings for practitioners wishing to transition to academia, beginning in the summer 2023. The Janet R. Spragens Federal Tax Clinic at American University Washington College of Law seeks a Practitioner in Residence with at least 3 years of experience. For more information, see the job posting here. The University of Connecticut School of Law seeks a Teaching Fellow for its Tax Clinic. The job posting is here.

Today’s guest blogger, Ben Chanenson, has his hand in almost every blog post but you never see his name. He is my wonderful research assistant and a 1L at the University of Chicago. He assists in putting together posts, running down facts and the law, and otherwise doing all the things necessary to make the blog work. After reading our posts for most of the past year, he has written his own excellent post raising again the question of where the Tax Court sits within our tripartite system of government. The impetus for today’s post is a recent decision by the Court of Appeals for Veterans Claims – another Article I court which must struggle with its own place in our system. Keith

Next year will mark the centennial anniversary of the Board of Tax Appeals, a predecessor to the Tax Court. Shortly after its creation, J. Gilmer Korner, one of the original members of the Board, explained at the ABA annual meeting where in the government the Board was located. Ninety-nine years later, artificial intelligence can pass law school exams, but we lack a definitive answer on where the Tax Court is located.


The Past:

The Supreme Court held in Freytag v. Commissioner, 501 U.S. 868 (1991) that the Tax Court “exercises a portion of the judicial power of the United States.” In a concurring opinion joined by Justices O’Connor, Kennedy, and Souter, Justice Scalia wrote that the Tax Court “exercises the executive power of the United States.” Decades later, the D.C. Circuit embraced the Freytag concurrence at the expense of the majority and concluded in Kuretski v. Commissioner, 755 F.3d 929 (D.C. Cir. 2014) that the Tax Court was an independent executive branch agency. The next year, Congress passed the Protecting Americans from Tax Hikes Act of 2015 (PATH), where they responded to Kuretski. PATH added the following sentence to 26 U.S. Code § 7441, “The Tax Court is not an agency of, and shall be independent of, the executive branch of the Government.” This language did little to resolve the debate. In fact, shortly after its passage, Professor Bryan Camp wrote in PT that “I don’t see how the new Congressional language changes anything.” Academics, such as Professor Leandra Lederman, continue to write about the problem.

In Battat v. Commissioner, 148 T.C. 32 (2017), the Tax Court held that it was not an executive agency, but the Court did not explain where it was located in the government. Presently, the Tax Court website simply states that the Court “is a court of law exercising judicial power independent of the Executive and Legislative Branches.”

The debate over the location of the Tax Court has even reached the U.S. Court of Appeals for Veterans Claims. Yes, you read that right. In dueling concurring opinions on the proper location of the Court of Appeals for Veterans Claims in Prewitt v. McDonough, 36 Vet. App. 1 (U.S. 2022), Judge Falvey and Judge Jaquith dipped their toes into the over thirty-year odyssey on how to properly situate the Tax Court.

Prewitt v. McDonough:

As part of his appeal of a disability benefits denial, pro se litigant and Vietnam War veteran George D. Prewitt Jr argued that the Court of Appeals for Veterans Claims is “unconstitutionally structured and therefore cannot render a valid decision on his benefits claims.” The Court denied his petition because he failed to “show that he is entitled to extraordinary relief.” 

The Court’s opinion is less than four pages and does not go into depth on the Court’s placement in the government. Judge Falvey and Judge Jaquith believed a more thorough explanation was necessary, so they each filed concurring opinions. Due to the similarities between the Tax Court and the Court of Appeals for Veterans Claims, the concurring opinions touched on not only Freytag but also Kuretski and Battat.

Judge Falvey writes that:

[A] continued reading of Freytag as concluding that we exercise “the judicial power of the United States” does not appear to survive later Supreme Court decisions specifying that only Article III courts possess such power. See Stern, 564 U.S. at 484, 503 (holding that “the judicial power of the United States” may be vested only in Article III courts whose judges enjoy lifetime tenure and salary protections) … And later Supreme Court decisions have confirmed that only life-tenured Article III judges may exercise such power. See Oil States Energy Servs., LLC v. Greene’s Energy Grp., 138 S. Ct. 1365, 1372-73 (2018) (“Congress cannot ‘confer the Government’s “judicial power” on entities outside of Article III.'” (quoting Stern, 546, U.S. at 484)) …

Judge Falvey goes on to criticize the Tax Court’s decision in Battat. 

Much like the Tax Court, this Court exercises a form of administrative “judicial power” in the sense of examining facts and applying law, but not in the sense of Article III’s “judicial power of the United States.” Although the other concurrence relies on Battat v. Commissioner of Internal Revenue, 148 T.C. 32 (2017), to “persuasively rebut[]” Kuretski, post at 23-24, Battat accomplishes no such thing. Putting aside the relative authoritative value of the Court of Appeals for the D.C. Circuit versus the Tax Court, Battat made much the same error that the other concurrence makes here—ignoring the constraints of Article III, Section 1, to assert that an Article I court exercises the judicial power of the United States. See 148 T.C. at 53 (“While the Tax Court exercises a portion of the judicial power of the United States, . . . it has jurisdiction to adjudicate only public rights disputes, . . . and thus does not exercise that portion of the judicial power that is reserved for Article III judges.”). Contra Battat, the Constitution reserves all judicial power of the United States to Article III judges. U.S. CONST. art. III, § 1; Oil States, 138 S. Ct. at 1372-73; Stern, 564 U.S. at 484, 503.

Judge Jaquith responds that:

My colleague also throws shade on Freytag by endorsing the interpretation of it in Kuretski v. Commissioner of Internal Revenue. Rejecting a taxpayer’s erroneous assertion that Tax Court judges exercise Article III judicial power, Kuretski said that the Freytag Court “used the phrase ‘judicial power’ in ‘an enlarged sense,’ not in the particular sense employed by Article III.” 755 F.3d 929, 941, 410 U.S. App. D.C. 287 (D.C. Cir. 2014). The use of the words “in ‘an enlarged sense'” might be a fair characterization of Freytag if Kuretski—and then my colleague—did not define “‘in an enlarged sense'” as encompassing “‘all those administrative duties the performance of which involves an inquiry into the existence of facts and the application to them of rules of law.'” Kuretski, 755 F.3d at 941 (quoting Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. 272, 280, 15 L. Ed. 372 (1855)). That definition distorts and diminishes Freytag. The “enlarged sense” characterization comes from Justice Scalia’s partial concurrence, not the majority opinion. Freytag, 501 U.S. at 909-10 (Scalia, J., concurring in part). The Freytag holding quite specifically and thoroughly sets out that Article I courts, such as the Tax Court, that perform exclusively judicial functions exercise the judicial power of the United States and are “Courts of Law” within the meaning of the Appointments Clause. Id. at 888-92. Freytag thus covers this Court, as we have previously held…

Judge Jaquith argues that by determining that the Court of Appeals for Veterans Claims is located in the executive branch, Judge Falvey is opting for “”doctrinaire reliance on formal categories” over substance by contending that this Court’s status as an Article I tribunal “means that the Court wields executive power” rather than judicial power, and therefore cannot be in the judicial branch.”

As Judge Jaquith sees it, the Court of Appeals for Veterans Claims’:

[C]reation story is the same as that of the federal circuit courts and district courts—by Congress, under Article I—except we were created nearly 200 years later and our creation does not confer Article III’s tenure and salary protection. Proper consideration of this Court’s place in the judicial hierarchy recognizes that it is an inferior court that was created to provide, and actually provides, independent judicial review by Article I judges with statutory tenure and salary protections that approach those for Article III judges. And the difference in such protections is neither corrosive nor branch determinative, but tolerable for a narrower class of cases that warrant special attention. It is the assertion that judges wield executive power, and vice versa, that is the affront to separation of powers.

The Future:

The D.C. Circuit had an oral argument in Crim v. Commissioner last November. Keith wrote about this case last May. In this case, Joe DiRuzzo has asked the Court to overrule Kuretski. We will provide an update when the Court issues a decision, and the seemingly never-ending saga continues.


  1. Bryan Camp says

    And don’t forget that the Texas Tech University School of Law LITC is also looking for a Director for its Clinic! Just sayin’…. Here’s a good description and link to the job posting: https://taxprof.typepad.com/taxprof_blog/2023/02/texas-tech-looking-to-hire-litc-director.html. Tax Court has one session in Lubbock each year.

  2. Bryan Camp says

    Excellent post Ben. Nicely captures the meat of the disagreements.

  3. Buck Masters says

    The article exemplifies the fatal inconsistency of what the government says versus what they do. When a witness demonstrates such behavior, it is deemed unreliable, if not perjury since logic dictates; if one is true the other cannot be. It is called; mutually exclusive. In like fashion, the tax court is wherever a petitioner chooses, as it should be, since government can be sued anywhere there is a federal facility, now belied by code that makes centuries of common law on venue [long, a matter of convenience, that could be waived] now a matter of jurisdiction, when seeking a refund in district court. This is an issue that the scholars here should thoroughly explore, and explain, if at all possible.

Comment Policy: While we all have years of experience as practitioners and attorneys, and while Keith and Les have taught for many years, we think our work is better when we generate input from others. That is one of the reasons we solicit guest posts (and also because of the time it takes to write what we think are high quality posts). Involvement from others makes our site better. That is why we have kept our site open to comments.

If you want to make a public comment, you must identify yourself (using your first and last name) and register by including your email. If you do not, we will remove your comment. In a comment, if you disagree with or intend to criticize someone (such as the poster, another commenter, a party or counsel in a case), you must do so in a respectful manner. We reserve the right to delete comments. If your comment is obnoxious, mean-spirited or violates our sense of decency we will remove the comment. While you have the right to say what you want, you do not have the right to say what you want on our blog.

Speak Your Mind