Wherefore Art Thou Tax Court? (6/29/26; 7/1/26)

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; and Trump v. Cook, SC Slip Op. here and GS here. 

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.”

Tax Procedure Book Errata - Correct Status of the Tax Court (1/2/17)

Book Outline Section	Nature of Update	Location for current editions
Ch. 2 III.B.2. Article I Courts	Correct the status of the Tax Court as an Article I court independent of the judicial system subject to Article III and independent of the executive branch.  Prior to this change, the text in the current version indicated that the Tax Court was within the executive branch of Government.  It is not.  An error that should have been corrected previously.	Student Ed. P. 70 Practitioner Ed. p. 101

Change the paragraph on the United States Tax Court to read as follows:

               The United States Tax Court is an Article I court independent of the Article III judicial system and independent of the executive branch.  § 7441.  n339 The Tax Court has jurisdiction over tax related claims only.  Generally, the Tax Court has jurisdiction to redetermine deficiencies proposed by the IRS and resolve certain other disputes with the IRS. The Tax Court is the principal court in which tax controversies are litigated.
   n339 See Burns, Stix Friedman & Co. v. Commissioner, 57 T.C. 392, 395 (1971); and Freytag v. Commissioner, 501 U.S. 868, 890-892 (1991. In 2015, in response to the Kuretski case (cited below in the footnote), Congress added this sentence to § 7441: “The Tax Court is not an agency of, and shall be independent of, the executive branch of the Government;” that sentence codifies a clause from Freytag v. Commissioner, p. 891 “[t]he Tax Court remains independent of the Executive * * * Branch[es].” The President does have the power to power to remove Tax Court judges “for inefficiency, neglect of duty, or malfeasance in office, but for no other cause.”  § 7443(f).  Two key cases have held that the President’s limited power to remove Tax Court judges does not violate separation of powers principles (although the two cases reach the conclusion for different reasons).  Battat v. Commissioner, 148 T.C. ___, No. 2 (2017) (holding that the interbranch removal power did not implicate Article III because the Tax Court does not exercise Article III judicial power; Battat also has a good discussion of the history of the Tax Court from its inception as the Board of Tax Appeals to its current status); and Kuretski v. Commissioner, 755 F.3d 929 (D.C. Cir. 2014) (holding before the amendment noted above, that the Tax Court was an executive branch court that could permissibly be subject to Presidential removal); see also Byers v. United States Tax Court, 2016 U.S. Dist. LEXIS 135596 (D. D.C. 2016) (holding that the Tax Court is a court exempt from FOIA and containing a good discussion of the status of the Tax Court).  See also Brant J. Hellwig, The Constitutional Nature of the United States Tax Court, 35 Va. Tax Rev. 269 (2015).