The D.C. Circuit recently held that the president’s removal power over Tax Court judges does not violate the constitutional principle of separation of powers because the Tax Court is part of the executive branch.  The ruling seems to conflict with the Supreme Court’s decision in Freytag v. Commissioner, 501 U.S. 868 (1991), which held that the Tax Court exercises judicial power.  The circuit court limited its holding to appointment clause questions, but the decision could still have wide-ranging implications.  Once potential problem is that the standards of review provisions of the Administrative Procedure Act may no longer apply if the Tax Court is an executive agency rather than part of the judicial branch.

See Kuretski v. Commissioner, No. 13-1090 (D.C. Cir. 2014)

Posted by David Staggs, Associate Editor, Wealth Strategies Journal