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Media Alerts - Kuretski v. Commissioner of the IRS
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June 23, 2014
  Kuretski v. Commissioner of the IRS
Headline: D.C. Circuit holds U.S. Tax Court is part of the Executive Branch, and President's authority to remove Tax Court judges is constitutional.

Area of Law: Constitutional Law, Separation of Powers

Issue(s) Presented: Whether the President's authority to remove Tax Court judges for cause is a violation of constitutional separation of powers.

Brief Summary: Appellants, Peter and Kathleen Kuretski, failed to pay federal income taxes for the 2007 tax year. After assessing penalties and interests, the IRS attempted to collect the unpaid amount through a levy on the couple's home. In July, 2010, after failed attempts to reach a settlement with the IRS, the Kuretskis received notice that their request for a compromise and an abatement of penalties has been rejected. The Kuretskis unsuccessfully appealed that notice. A month later, they filed a motion for reconsideration and a motion to vacate in the Tax Court, claiming for the first time that the Tax Court exercised judicial power under Article III of the Constitution, rendering 26 U.S.C. ยง 7443(f), which enables the President to remove Tax Court judges for cause, a violation of constitutional separation of powers. The Tax Court denied both motions, declining to address the Article III because the Kuretskis had, without explanation, failed to raise it until after the court's initial decision. The Kuretskis appealed, and both parties stipulated that the United States Court of Appeals for the District of Columbia Circuit was the proper venue for review.

After determining that the Kuretskis had standing to raise the claim, the D.C. Circuit affirmed the Tax Court decision on both constitutional and non-constitutional grounds. Appellants' principal contention on appeal was that, because the Tax Court exercises "judicial power" under Article III of the Constitution, or, alternatively, because it is part of the Legislative Branch, the federal statute authorizing the President to remove Tax Court judges for cause "leaves those judges in an unconstitutional bind" because they "must fear removal from an actor in another branch."

The D.C. Circuit rejected that argument, concluding that the Tax Court is part of the Executive Branch. Applying the "public rights" doctrine, which allows Congress to constitutionally assign cases involving "public rights" to non-Article III tribunals, the court determined that it is "settled" that internal revenue and taxation fall into the "public rights" category. The court concluded that "Congress undisputedly exercised that option when it initially established the Tax Court as an Executive Branch agency rather than an Article III tribunal" and was unpersuaded by the Kuretskis' argument that the 1969 Tax Reform Act converted the Tax Court into an Article III court.

Addressing Freytag v. Comm'r, 501 U.S. 868 (1991), in which the Supreme Court held that the Tax Court was a "Court of Law" that "exercises a portion of the judicial power of the United States," the D.C. Circuit emphasized that Freytag dealt with the scope of the Appointments Clause and that the Court had clarified that "the judicial power of the United States is not limited to the judicial power defined under Article III."

Finally, the D.C. Circuit rejected the Kuretskis' alternative argument that the Tax Court functions as part of the Legislative Branch. While the court agreed that the Tax Court could be characterized as an Article I legislative court, it held that the court was not part of the Legislative Branch and its judges did not exercise "legislative powers" under Article I. While, under Freytag, the Tax Court has some measure of independence from the Executive Branch and exercises "something other than executive power," the court concluded that the Tax Court exercised its authority as part of the Executive Power and that its judges remain Executive Branch officers subject to presidential removal.

For the full opinion, please see

Panel: Srinivasan, Edwards, and Sentelle

Argument Date: November 26, 2013

Date of Issued Opinion: June 20, 2014

Docket Number: 13-1090

Decided: Affirmed

Case Alert Author: Albertine Guez

Counsel: Tuan N. Samahon, Carlton M. Smith, Frank Agostino, and John P.L. Miscione for appellants. Bethany B. Hauser, Teresan E. McLaughlin for appellee.

Author of Opinion: Srinivasan

Case Alert Circuit Supervisors: Elizabeth Beske, Ripple Weistling

    Posted By: Ripple Weistling @ 06/23/2014 10:22 AM     DC Circuit  

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