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Initial Take on the Kuretski Language in the PATH Law

Posted on Dec. 19, 2015

In yesterday’s post summarizing some of the procedural provisions in PATH, I noted that the legislation in Section 441 (new Code Section 7441) includes a post-Kuretski “clarification” that the Tax Court is not an executive agency. In this brief post, guest poster Professor Bryan Camp offers his initial take on that provision. Les

I don’t see how the new Congressional language changes anything.  By that I mean I don’t see how the language affects what the Tax Court does, can do, will do, nor how its decisions are reviewed by Article III courts.  I don’t see how it affects what taxpayers do or what the Service does.  The language does, however, allow academics to write new articles!

Of course the Tax Court is not an “agency” of the Executive branch.  Agencies exercise a blend of rulemaking and adjudication.  The Tax Court just adjudicates.  It’s a court.  As the Supreme Court said in Freytag, the Tax Court performs a judicial function.  Specifically, it’s an Article I court established by Congress per the Necessary and Proper Clause as part of Congress’ exercise of the taxing power.

As the D.C. Cir. opinion in Kuretski pointed out, just because Congress created the Court by exercising Article I powers and not by exercising Article III powers does not make the Tax Court part of the “Legislative branch” because it does not perform the functions of writing statutes.  And, since it was NOT created per the requirements of Article III, it’s not part of the “Judicial branch” and it does not perform the function of exercising “judicial power” which is a term of constitutional art.

So the Kuretski court decided the Tax Court had to be “located” within the Executive branch.  Congress now just says it is not an “agency” within the Executive branch and is “independent” of the Executive branch.

So the Tax Court is not an Independent Agency (whatever that means, as recently discussed).  So let’s call it an “Independent Court” (whatever that means, as I am sure will be discussed ad nauseum).   Hell, let’s just call it a “Banana.”

“Where” it is located in some organizational chart is not relevant to what powers it can exercise or how it fits into the constitutional distribution of powers.  What IS relevant is whether the Tax Court’s powers impermissibly entrench on some branch’s powers.  And whether it does THAT depends on what its powers ARE and THIS language does not affect those powers.

The debate about the constitutional placement of the Tax Court reflects, in part, a larger debate about the nature of the structural Constitution.  First, there are the Trinitarians.  They read Articles I, II, and III as creating solid walls between the three great Departments of government, sort of like three big offices.  You gots your Legislative office here, your Executive office there, and your Judicial office over there there.  Just as a human cannot physically be in more than one office at once, neither can any governmental entity “be” in more than one of those rooms, nor can any person be an “official” of more than one office.  So every governmental entity and governmental employee must be in one room or another.

Next up are the Unitarians.  They see the Constitution as building a Great Room, not three offices separated by walls.  In the Great Room are three power centers: legislative, executive, and judicial.  There are no walls but each group of governmental actors has its own work space and own function.  There is plenty of room to build new cubicles and the key idea is that no working group take over what another working group is supposed to be doing.  It is not so important where each cubicle is physically located in the room as it is what each occupant is doing.

Finally, there are the Fourth Branchers.  They use a more organic metaphor: the tree.  Yes, you’ve all heard of the Three Branches of Government.  These folks take that metaphor and suggest that there is room on the Constitutional trunk for new little branches to grow.  So “Independent Agencies” can be seen as “fourth” branches.  Not only do they not fit comfortably in any of the three “offices” as conceived of by the Trinitarians, they also combine functions (rulemaking and adjudication) and so cannot be easily located in the Great Room of the Unitarians.

I think under any of these models, this language does no work change.  Some Trinitarians on an Administrative Law listserv have suggested that this language will ensure that when OTHER federal statutes refer to “Executive Agencies” those statutes will now be more obviously inapplicable to the Tax Court than before.  But they agree with me that this language does not (or should not) impact what the Tax Court does or how it performs its function of adjudicating disputes between taxpayers and the Service.

The language changes nothing except to now create busy work for a lot of folks who should not have to waste their time on it.

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