Today my colleague Stephanie Hoffer and I will be presenting our paper, “The Death of Tax Court Exceptionalism,” which is forthcoming in the Minnesota Law Review, at the University of Kentucky College of Law Faculty Workshop.
Stephanie and I have already blogged about this paper elsewhere (here, here, and here), but I wanted to highlight a terrific response to our article by Leandra Lederman. This workshop should be particularly fun for us, as Professor Lederman will be presenting her reply to our piece, and we will then be responding to it. Here’s the abstract for her response:
Stephanie Hoffer and Christopher Walker’s excellent Minnesota Law Review article, The Death of Tax Court Exceptionalism, http://ssrn.com/abstract=2393412, analyzes the topical and important question of whether the Administrative Procedure Act (APA) governs the standard and scope of review the Tax Court applies to Internal Revenue Service (IRS) decisions. The APA contains provisions for court review of agency decisions but the Tax Court has repeatedly stated that the APA does not apply to it. As a result, the Tax Court has accorded less across-the-board deference to the IRS than APA standards call for.
Professors Hoffer and Walker argue that the Tax Court should cease taking this exceptional position and instead apply the APA. I have long advocated for the abandonment of tax insularity, and the Tax Court’s history makes it of particular concern in this regard. As an Article I court that at one time was an independent agency, it is unclear even in which branch of government this tribunal belongs. The Tax Court is isolated from other courts and judicial institutions such as the Administrative Office of U.S. Courts and the U.S. Judicial Conference, although it is no longer subject to the provisions that govern administrative agencies.
As a result, the question of whether the APA’s “reviewing court” provisions apply to the Tax Court is not as doctrinally obvious as one might imagine, as this Reply demonstrates. Yet, this is primarily a symptom of the larger problem of the Tax Court’s insularity and unclear position in the federal government. Although it would be helpful for the Tax Court to implement APA procedures even without making other structural changes, a piecemeal approach is not particularly efficient. Recent case law suggests that litigants will continue to raise issues about the Tax Court’s unusual structure as long as it is different from other courts. The broad point of this Reply is therefore that it is past time to classify the Tax Court’s place in the federal scheme and treat the court like the judicial body that it is.
As I have noted elsewhere, excceptionalism in administrative law is not unique to tax; agency-specific deviations from general administrative law principles have been documented in a number of regulatory contexts including antitrust, environmental protection, federal communications, intellectual property, national labor relations, and social security. So the lessons learned from tax exceptionalism may well have broader applicability to other areas where exceptionalism pervades administrative law.