The Tax Prof Blog reports on In Kuretski v. Commissioner, No. 13-1090 (D.C. Cir. June 20, 2014), in which a unanimous panel of the D.C. Circuit rejected a challenge to a Tax Court decision that was based on the argument that the power given to the President by section 7443(f) of the Internal Revenue to remove Tax Court judges for “inefficiency, neglect of duty, or malfeasance in office” is a constitutionally impermissible infringement on the judicial power exercised by the Tax Court. The D.C. Circuit held that this removal power does not violate the constitutional separation of powers between the executive branch and the judiciary because, in the D.C. Circuit’s view, the Tax Court is part of the executive branch.
This holding undoubtedly has many significant consequences beyond the specific issue in the case. One very worrisome potential implication is the effect this holding could have on the application of the judicial review provisions of the Administrative Procedure Act when the Tax Court in deficiency proceedings is considering a challenge by a taxpayer to the validity of IRS action such as the issuance of regulations. The APA judicial review provisions (5 U.S.C. §§ 701 to 706) apply when a court reviews agency action.