Wherefore Art Thou Tax Court? (6/29/26)

In two cases today, the Court held that

• The general rule is that (i) the President can fire executive agency personnel at will even if the statute says that they can only be removed for cause or for some other similarly worded reason  Trump v. Slaughter, 609 U. S. ___ (2026) (stating the general rule); but
• An exception to the general rule in the case  of members of the Board of Governors of the Federal Reserve where the statute requires “for cause” removal. Trump v. Cook, 609 U. S. ____ (2026) (stating the exception).

The opinions may be viewed and downloaded here: Trump v. Slaughter, SC Slip Op. here and GS here [to come]; and Trump v. Cook, SC Slip Op. here and GS here [to come]. 

Of course, the general rule (concocted under the “unitary executive” theory) and the exception require a definition of an executive agency subject to the respective rule and exception. In other words, it is not clear that Cook states a single exception applicable to the Federal Reserve. 

In the tax world, the Tax Court is potentially implicated in this brouhaha. Consider the following statutory text:

26 U.S. Code § 7441 – Status
There is hereby established, under article I of the Constitution of the United States, a court of record to be known as the United States Tax Court. The members of the Tax Court shall be the chief judge and the judges of the Tax Court. The Tax Court is not an agency of, and shall be independent of, the executive branch of the Government.

26 U.S. Code § 7443 - Membership
* * * *
(f)Removal from office
Judges of the Tax Court may be removed by the President, after notice and opportunity for public hearing, for inefficiency, neglect of duty, or malfeasance in office, but for no other cause.

A strict textual reading of § 7441 specifically states that the Tax Court is not an executive body (agency in administrative law lingo). The President has the power to appoint Tax Court Judges, “by and with the advice and consent of the Senate, solely on the grounds of fitness to perform the duties of the office.”  § 7443(b). (That may suggest that politics should not be involved, but babies come in baskets (although politics is involved some of the Tax Court Judges are exceptional on the metric of “fitness to perform”).) Then, once the Senate has advised and consented, the President alone has the power to remove Tax Court Judges but only, to repeat, “after notice and opportunity for public hearing, for inefficiency, neglect of duty, or malfeasance in office, but for no other cause.”

So, is the President’s power to remove subject to Slaughter’s general rule or Cook’s exception (or a Cook-type exception)?

I have just revised my working draft for the 2026 editions of my Federal Tax Procedure book, due on SSRN in early August. Basically, the revision states the propositions above, so I don't believe that providing the revised text of the book now would be helpful to readers. I expect that there will be more revisions before the book is finalized in early August.

Although I often do not think often about (or indeed much of) Justice Thomas' opinions (of the Court, concurring, or dissenting), I think that on the subject of this blog the following from his Cook dissent is worth copying and pasting for whatever it is worth (pp. 22 of dissent (p. 61 of pdf)-p. 23 (p. 62 of pdf), bold face in footnote supplied by JAT):

The Court’s interpretation is also inconsistent with “congressional practice.” Id., at 243 (opinion of ROBERTS, C. J.). Congress has enacted dozens of statutes that require notice and a hearing before an officer can be removed. They all do so “in explicit terms.” Ibid. These statutes, for instance, provide that an officer “may be removed by the President only upon notice and hearing,” 5 U. S. C. §7104(b) (emphasis added), or that “[a]ny such . . . removal may be made only after notice and opportunity for a hearing,” 17 U. S. C. §802(i) (emphasis added).n4 A month before the for-cause removal protection was restored to the Federal Reserve Act, [*23; *62 of pdf] many other statutes, including the Federal Reserve Act, that do not require notice or a hearing.n5 Congress of course has many reasons not to require notice and a hearing, including that they can cause delay and uncertainty, can waste resources, and can empower the Judiciary at the expense of the political branches. 

   n4 Other examples abound. See 5 U. S. C. §7521 (limiting agency’s power to effect “a removal” of an administrative law judge to “good cause established and determined by the Merits Systems Protection Board on the record after opportunity for hearing before the Board”); 10 U. S. C. §942(c) (“Judges [of the Court of Appeals for the Armed Forces] may be removed from office by the President, upon notice and hearing, for—(1) neglect of duty; (2) misconduct; or (3) mental or physical disability”); 15 U. S. C. §7217(d)(3) (“The Commission may . . . remove from office . . . a member of the Board, if the Commission finds, on the record, after notice  [*24*; *62* of pdf] and opportunity for a hearing, that such member” met certain criteria); 16 U. S. C. §1852(b)(6)(B) (“The Secretary may remove for cause any member . . . found by the Secretary, after notice and an opportunity for a hearing . . . to have committed an act prohibited by section 1857(1)(O) of this title”); 22 U. S. C. §4106(e) (“The Chairperson may remove any other Board member, upon written notice, for corruption, neglect of duty, malfeasance, or demonstrated incapacity to perform his or her functions, established at a hearing, except where the right to a hearing is waived in writing”); §4135(d) (“The Secretary of State may, upon written notice, remove a Board member for corruption, neglect of duty, malfeasance, or demonstrated incapacity to perform his or her functions, established at a hearing (unless the right to a hearing is waived in writing by the Board member)”); 26 U. S. C. §7443(f ) (“Judges of the Tax Court may be removed by the President, after notice and opportunity for public hearing, for inefficiency, neglect of duty, or malfeasance in office, but for no other cause”); 28 U. S. C. §152(e) (“Before any order of removal may be entered, a full specification of charges shall be furnished to such bankruptcy judge who shall be accorded an opportunity to be heard on such charges”); §176(b) (“Before any order of removal may be entered, a full specification of the charges shall be furnished to the judge involved, and such judge shall be accorded an opportunity to be heard on the charges”); §631(i) (“Before any order or removal shall be entered, a full specification of the charges shall be furnished to the magistrate judge, and he shall be accorded by the judge or judges of the removing court, courts, council, or councils an opportunity to be heard on the charges”); 31 U. S. C. §703(e) (“A Comptroller General or Deputy Comptroller General . . . may be removed at any time by . . . joint resolution of Congress, after notice and an opportunity for a hearing, only for” five specified causes); §751(d) (“A member may be removed by a majority of the Board . . . only for inefficiency, neglect of duty, or malfeasance in office. A member subject to removal shall be given notice and an opportunity for a hearing before the Board unless the member waives the opportunity in writing”); 38 U. S. C. §7101(b)(2) (“Any such removal may only be made after notice and opportunity for hearing”); §7253(f )(2) (“Before a judge may be removed from office under this subsection, the judge shall be provided with a full specification of the reasons for the removal and an opportunity to be heard”). 

   n5 See 12 U. S. C. §3013(a) (“Any member appointed by the President may be removed for cause by the President”); 14 U. S. C. §309(c)(1) (“An officer may be removed from the position of Director for cause at any time”); 39 U. S. C. §202(a)(1) (“The Governors . . . may be removed only for cause”); §502(a) (“The Commissioners . . . may be removed by the President only for cause”); 48 U. S. C. §1424b (“[A] judge for the District Court of Guam . . . shall hold office for the term of ten years . . . unless sooner removed by the President for cause”); §1614(a) (“[T]wo judges for the District Court of the Virgin Islands . . . shall hold office for terms of ten years . . . unless sooner removed by the President for cause”); §1821(b)(1) (“[A] judge for the District Court for the Northern Mariana Islands . . . shall hold office for the term of ten years . . . unless sooner removed by the President for cause”); §2121(e)(5)(B) (“The President may remove any member of the Oversight Board only for cause”); 49 U. S. C. §49106(c)(6)(C) (“A member appointed by the President may be removed by the President for cause”).

One further item, a side point, is the engagement of majority opinion with Justice Thomas' about that ubiquitous legal concept of dicta. I have added that tiff to a footnote about dicta in the working draft:

   fn ___ In determining the effect of prior judicial interpretations, it is important to distinguish between interpretations that are (i) holdings necessary to the result in the case (sometimes called judicial precedent) and (ii) other holdings, not necessary to the result, which are sometimes called obiter dictum or just dictum (or, in the plural obiter dicta or dicta). (I often use “dicta” generically without intending to distinguish between singular and plural.) Only the former are deemed “controlling” precedent either by the same court or by lower courts; the latter are not controlling but may be persuasive (particularly if uttered by the same court or a higher-level court). There is some considerable nuance as to how to distinguish the two categories. A good article that goes into the detail is Michael Abramowicz & Maxwell Stearns, Defining Dicta, 57 Stan. L. Rev. 953 (2005); see also Pierre Laval, Judging Under the Constitution: Dicta About Dicta, 81 N.Y.U. L. Rev. 1249 (2006). For a more accessible and shorter discussion, I recommend Paul J. Watford, Richard C. Chen and Marco Basile, Book Review: Crafting Precedent: The Law of Judicial Precedent, 131Harv. L. Rev. 543, 575-576 (2017), which discusses the concepts presented in Bryan A. Garner, et al., The Law of Judicial Precedent 62-70 (Thomson Reuters 2016). One of the problems of this distinction between holdings and dicta is making the distinction. Cf. Trump v. Cook, 609 U. S. ____ [*22], ___ n. 3 (2026) (where the Opinion of the Court and Justice Thomas dissenting disagree about whether text in an earlier opinion  was dicta or not; see Opinion of Court, p. 20 (“Perhaps recognizing the Government’s bind, JUSTICE THOMAS would simply discard the rule announced in Reagan and Shurtleff as “a single line of dicta"; and Justice Thomas [*22; *61 of pdf] says: “The Court characterizes the one line in Reagan and Shurtleff as not dicta, but a holding. It was dicta.”)