LEXSEE 55 BAYLOR L. REV. 453
Copyright (c) 2003 Baylor University
Baylor Law Review
Spring, 2003
55 Baylor L. Rev. 453
LENGTH: 25578 words
ARTICLE: The Tax Court's Jurisdiction Over Due Process Collection Appeals: Is it Constitutional?*
SEC-NOTE-1: * I am extremely grateful to Leandra Lederman for her helpful suggestions on various aspects of this article. I also would like to thank Deborah Geier, Louis Geneva, and Peter Scott for their encouragement and support.
NAME: Diane L. Fahey**
BIO: ** Diane Fahey received her B.A. from Cleveland State University, J.D. from Cleveland-Marshall, and LL.M. in taxation from Georgetown University. After completing her LL.M, Diane Fahey served as an Attorney-Advisor at the United States Tax Court. She will be a visiting professor at Vermont Law School for the 2003-2004 academic year.
SUMMARY:
... I.R.C. sections 6320 and 6330 entitle taxpayers to demand pre-collection hearings before the Internal Revenue Service to review the propriety of its proposed collection action. ... If the taxpayer appeals the appeals officer's determination to the Tax Court, the levy remains suspended unless the underlying tax liability is not in dispute and the Internal Revenue Service shows good cause why the levy should not be suspended. ... The appeals officer did not provide the taxpayer with written verification, but rather, advised the taxpayer that the hearing was limited to discussing the appropriateness of the proposed collection action, to which action the taxpayer offered no alternative. ... However, the taxpayer in the collection hearing situation has not had a pre-assessment review of his deficiency by the Tax Court conducted in accordance with the deficiency procedures set forth in I.R.C. sections 6211-16. ... Additionally, if the taxpayer cannot file a refund suit, and if the Tax Court's determination is not subject to judicial review, then the essential elements of judicial power no longer remain with the Article III courts, thus violating the first element of the Schor test. ... However, in addition to jurisdiction, the second element of the Schor test also addresses a non-Article III tribunal's powers. ...
TEXT:
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I. Introduction
In 1997 and 1998, the Senate Finance Committee held highly publicized hearings on purported abuses by the Internal Revenue Service. n1 The hearings led to the enactment of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA of 1998). n2 The RRA of 1998 added I.R.C. sections 6320 and 6330 to the Internal Revenue Code , the so-called "due process" hearings for collections. n3 I.R.C. sections 6320 and 6330 entitle taxpayers to demand pre-collection hearings before the Internal Revenue Service to review the propriety of its proposed collection action. A taxpayer dissatisfied with the pre-collection hearing is now permitted to appeal the Internal Revenue Service's determination to either the United States Tax Court or the appropriate district court. n4 Congress's enactment of I.R.C. sections 6320 and 6330 represents a dramatic departure from firmly established practice that, after assessment of a tax, any judicial review to which a taxpayer is entitled must be rendered post-collection. Further, prior to the enactment of I.R.C. sections 6320 and 6330 , taxpayers had little right to judicial review of the Internal Revenue Service's collection actions.
Currently, both the Tax Court and the district courts have jurisdiction over appeals from the I.R.C. sections 6320 and 6330 collection hearings. n5 Although the statute is ambiguous, the courts have interpreted it as vesting exclusive jurisdiction with the Tax Court over collection appeals if the Tax Court would have jurisdiction to determine a deficiency for the type of tax [*455] involved. n6 The district courts have exclusive jurisdiction over all other appeals. n7 However, legislation has been introduced in Congress to grant the Tax Court exclusive jurisdiction over all such appeals. n8
The Tax Court is not a court created by Congress under Article III of the United States Constitution, n9 such as a federal district court or a federal court of appeals. Rather, the Tax Court is a specialized court created by Congress pursuant to one of its powers enumerated in Article I of the United States Constitution n10 and the necessary and proper clause also contained therein. n11 Because the Tax Court is a legislative or Article I court, it "is a court of limited jurisdiction, and ... may exercise ... jurisdiction only to the extent authorized by Congress." n12 The Tax Court's primary function has been to serve as a trial court reviewing determinations of deficiencies in income, estate and gift, or certain excise taxes allegedly owed by the taxpayer. n13 In vesting the Tax Court with jurisdiction over collection appeals, n14 Congress changed the Tax Court's traditional role. When the Tax Court reviews appeals from proposed collection actions by the Internal Revenue Service, the Tax Court serves as an appellate court. n15 Unfortunately, Congress failed to specify in the legislation what powers the Tax Court has when reviewing these appeals and what remedies it may fashion. n16 The Tax Court has attempted to fill in the gaps by turning to its authorized jurisdiction and powers with regard to tax deficiency proceedings. n17 This approach has not been successful, with the result that the Tax Court has reversed itself on fundamental issues regarding collection appeals. n18
[*456] Congress needs to clarify and define the Tax Court's role and powers with regard to appeals from collection hearings. However, the solution is not as simple as Congress enacting legislation empowering the Tax Court to fashion remedies or otherwise proceed as it deems fit. If the Tax Court's jurisdiction is too far-reaching or its powers overly broad, Congress runs the risk of violating the principle of separation of powers and encroaching upon the powers of the Article III courts. n19 Although several lower federal courts have held, without significant analysis, that the Tax Court is constitutional, n20 it is unlikely at this late date that the Supreme Court would ever consider whether the congressional grant of power to the Tax Court to conduct deficiency proceedings is an unconstitutional encroachment on the judicial power by the legislature. n21 However, it is conceivable that there could be a split among the circuits regarding the permissible nature and extent of the Tax Court's powers with regard to the Tax Court's review of collection hearings. The United States Supreme Court has struck down as unconstitutional grants of powers to non-Article III tribunals before. For example, after ten years of study, Congress passed the Bankruptcy Reform Act of 1978, n22 which was struck down as an unconstitutional encroachment on the powers of the Article III courts by the Supreme Court in Northern Pipeline Construction Co. v. Marathon Pipe Line Co. n23 The grant of power to the bankruptcy court that was found to offend Article III was relatively modest: the right to adjudicate claims arising under state law. n24
[*457] This article considers whether the Tax Court may be vested with authority to hear appeals from collection hearings and given equitable powers to fashion remedies without violating Article III. Part II reviews the Internal Revenue Service's authority to assess and collect revenue, and the Tax Court's function as a forum for the pre-assessment determination of taxpayer liability. Next, Part II explains the new pre-collection hearing and appeal procedures.
Part III reviews the Tax Court's interpretation of I.R.C. sections 6320 and 6330 , and its attempts to reconcile its limited jurisdiction and powers with the salutory purpose of the new sections. In particular, Part III focuses on the efforts in some of the concurring opinions to articulate a jurisprudence to be used as a tool in reconciling the Tax Court's limited jurisdiction with its new responsibilities.
Part IV considers whether the Tax Court's jurisdiction over collection appeals violates the individual's right to have his claim heard before an independent and impartial judiciary. Part IV then applies the four-factor test enunciated by the Supreme Court in Commodity Futures Trading Commission v. Schor n25 to determine whether this new grant of power to the Tax Court must be struck down as an unconstitutional usurpation of the judicial power by the legislative branch.
The article concludes that the Tax Court may consider the propriety of the Internal Revenue Service's proposed collection actions without violating the individual's right to an impartial and independent adjudicator or raising separation of powers concerns. However, the Tax Court's authority to review on a de novo basis the taxpayer's underlying liability raises due process and separation of powers concerns, and Congress needs to limit and clarify the extent of the Tax Court's jurisdiction over that issue.
II. Assessment and Collection of Tax
A. The Internal Revenue Service's Assessment Authority
Historically, the federal government's tax collectors have enjoyed broad, virtually unchecked collection powers not subject to judicial review. n26 These powers are buttressed by the Anti-Injunction statute n27 [*458] which prohibits a taxpayer from obtaining a court injunction against assessment or collection, subject to a few statutory exceptions contained therein. The United States Supreme Court has also held that a taxpayer may obtain injunctive relief if he can prove two factors: (1) irreparable harm and (2) certainty of success on the merits, a virtually impossible standard to satisfy. n28
The Internal Revenue Service can commence collection proceedings once the tax has been assessed. n29 Assessment is the recording of the taxpayer's tax liability in the office of the Secretary of the Treasury. n30 However, the Tax Court provides an opportunity for pre-assessment judicial review of some tax liabilities. n31 In the case of income, estate and gift, and certain excise taxes, if the Internal Revenue Service determines that there is a deficiency in the tax shown on the return, or if no return was filed, the Internal Revenue Service must send the taxpayer a notice of deficiency. n32 Within ninety days after the notice is mailed, the taxpayer may file a petition with the Tax Court for a de novo re-determination of the deficiency. n33 The Internal Revenue Service is prohibited from assessing or collecting the tax during the ninety-day notice period, and if the taxpayer files a petition with the Tax Court, until the Tax Court's decision is final. n34 If the taxpayer does not file a timely petition with the Tax Court, or if the Tax Court determines that there is a deficiency, the Internal Revenue Service may assess the tax. n35
[*459] The Tax Court is the sole pre-assessment judicial forum available to taxpayers, and, as noted above, is only available to contest income, estate and gift, and certain excise taxes. n36 If the tax is not subject to the Tax Court's jurisdiction, such as a payroll tax or a tax that the taxpayer has acknowledged on his return to be due, the Internal Revenue Service may immediately assess the tax and commence collection. n37
Under certain circumstances, a taxpayer who cannot pay the full amount of the assessed tax, may enter into an agreement with the Internal Revenue Service to pay the tax in installments. n38 A taxpayer may also be able to compromise the amount due. n39 The RRA of 1998 now requires the Internal Revenue Service to enter into installment agreements with taxpayers under certain circumstances. n40 The RRA of 1998 also allows the taxpayer to appeal a rejection of an offer in compromise or installment agreement to the Office of Appeals. n41
B. The Internal Revenue Service's Collection Powers
After the Internal Revenue Service assesses a tax, few of the taxpayer's assets are exempt from seizure or levy to pay the delinquent tax. Even the assets of third parties can be subject to seizure. n42 The collection process generally operates as follows. Within sixty days of assessment, the Internal Revenue Service sends the taxpayer a notice and demand for [*460] payment. n43 If the taxpayer does not pay the tax within ten days, the Internal Revenue Service sends the taxpayer a notice of federal tax lien which attaches to all the taxpayer's real and personal property. n44 In addition, if the taxpayer fails to pay the tax within ten days after notice and demand, the Internal Revenue Service may levy on the taxpayer's property on which there is a federal tax lien, n45 except for certain exempt property. n46 However, the Internal Revenue Service must give the taxpayer written notice of the levy no less than thirty days before the day of levy. n47 As soon as practicable after seizure, the Internal Revenue Service must notify the taxpayer in writing that the property has been seized. n48 The Internal Revenue Service must also give the taxpayer notice as soon as practicable after seizure that the property is to be sold. n49 The sale shall take place not less than ten days nor more than forty days after public notice, unless the goods are perishable. n50 The taxpayer has the right to redeem the property. n51 Alternately, the Internal Revenue Service may choose to file a civil suit in a federal district court to enforce the lien. n52
The Anti-Injunction statute usually prohibits the taxpayer from obtaining an injunction to restrain the Internal Revenue Service from collecting an assessed tax. n53 Other than as provided in I.R.C. sections 6320 and 6330 , discussed below, the only relief from liability to which the taxpayer is entitled after assessment is rendered post-collection. If the taxpayer disputes that he is liable for an assessed tax, he must pay the tax [*461] and then file an administrative claim with the Internal Revenue Service for a refund. n54 If the Internal Revenue Service denies the claim, the taxpayer may then file suit for refund in either the district court or the court of federal claims. n55 However, the suit will address the existence and amount of the taxpayer's liability, but will not address the Internal Revenue Service's collection methods.
C. Justifications for Summary Administrative Proceedings
The Internal Revenue Service's collection powers may appear to be draconian, but they have been deemed necessary to the efficient functioning of our government. In upholding the right of the government to collect taxes by summary administrative proceedings, the courts have recognized the necessity of the federal government being able to rely on a steady stream of revenue free from interference by taxpayers seeking to delay payment by means of suits and injunctions. n56 This policy was articulated by the United States Supreme Court in Den ex dem. Murray v. Hoboken Land & Improvement Co., n57 where the Court noted that no government could afford to permit a delay in the collection of revenue:
It may be added, that probably there are few governments which do or can permit their claims for public taxes, either on the citizen or the officer employed for their collection or disbursement, to become subjects of judicial controversy, according to the course of the law of the land. Imperative necessity has forced a distinction between such claims and all others, which has sometimes been carried out by summary methods of proceeding, and sometimes by systems of fines and penalties, but always in some way observed and yielded to. n58
[*462] Subsequently, in Cheatham v. United States, n59 the Supreme Court recognized that payment as a condition precedent to a taxpayer's suit to contest liability protects the government not only from taxpayer interference with the collection of revenue, but also from a potentially hostile judiciary.
If there existed in the courts, State or National, any general power of impeding or controlling the collection of taxes, or relieving the hardship incident to taxation, the very existence of the government might be placed in the power of a hostile judiciary. Dows v. The City of Chicago, 11 Wall. 108. While a free course of remonstrance and appeal is allowed within the departments before the money is finally exacted, the general government has wisely made the payment of the tax claimed, whether of customs or of internal revenue, a condition precedent to a resort to the courts by the party against whom the tax is assessed. n60
In Phillips v. Commissioner, n61 the Supreme Court also recognized the necessity of the statutory prohibition against injunctions with regard to the collection of tax.
The right of the United States to collect its internal revenue by summary administrative proceedings has long been settled. Where, as here, adequate opportunity is afforded for a later judicial determination of the legal rights, summary proceedings to secure prompt performance of pecuniary obligations to the government have been consistently sustained. Property rights must yield provisionally to governmental need. Thus, while protection of life and liberty from administrative action alleged to be illegal, may be obtained promptly by the writ of habeas corpus, the statutory prohibition of any "suit for the purpose of restraining the assessment or collection of any tax" postpones redress for the alleged invasion of property rights if the exaction is made under color of their offices by revenue officers charged with the general authority to assess and collect the [tax] revenue... . Proceedings more summary in character than that provided [*463] in section 280, and involving less directly the obligation of the taxpayer, were sustained in Murray's Lessee v. Hoboken Land & Improvement Co. It is urged that the decision in the Murray case was based upon the peculiar relation of a collector of revenue to his government. The underlying principle in that case was not such relation, but the need of the government promptly to secure its revenues. n62
The Supreme Court also stated that the creation of the Board of Tax Appeals, where a taxpayer could dispute certain liabilities prior to payment, did not obligate Congress otherwise to provide for pre-collection litigation of tax liabilities. n63 Allowing a taxpayer to contest liability prior to payment was a matter of legislative grace, and Congress could continue to use summary administrative proceedings to collect revenue. n64
There is no substantial relaxation of this principle in the provision that, while an appeal is pending before the Board of Tax Appeals, no proceeding by distraint may be taken, and ... such proceeding may be enjoined ... . The paramount right of the United States to require immediate payment, or surety therefore, is not diminished. n65
Further, the Supreme Court explicitly stated that when property rights are involved, due process is not violated if judicial review is delayed until after collection, as long as the opportunity for judicial review is adequate. n66
Where only property rights are involved, mere postponement of the judicial enquiry is not a denial of due process, if the opportunity given for the ultimate judicial determination of the liability is adequate. Delay in the judicial determination of property rights is not uncommon where it is essential that governmental needs be immediately satisfied. n67
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D. The New Collection "Due Process" Hearings Provisions
1. Administrative Hearing Requirements
I.R.C. sections 6320 and 6330 represent a dramatic departure from long-standing collection practices described above by providing a taxpayer, against whom a tax has been assessed, the opportunity to request judicial review of proposed collection actions. n68 Further, if the Internal Revenue Service takes collection action during the pendency of the judicial review, the Anti-Injunction statute n69 will not bar the taxpayer from obtaining an injunction. n70
I.R.C. sections 6320 and 6330 obligate the Internal Revenue Service to furnish the taxpayer with written notice of his right to a hearing after the lien has been filed and before the levy takes place. n71 The two sections contain similar provisions. Both sections provide that the written notice must either be given in person, left at the dwelling or usual place of business of the taxpayer, or sent by certified or registered mail to the taxpayer's last known address. (If the notice of the right to a levy hearing is sent by certified or registered mail, a return receipt must be attached.) n72 The notice of hearing for the lien must be sent within five business days of the filing of the notice of lien. n73 The notice of hearing for the levy must be sent not less than thirty days before the date of the first levy. n74
The notice of hearing for the lien must include "in simple and nontechnical terms," the amount of unpaid tax, the right of the taxpayer to request an administrative hearing within thirty days after the five day period described above, the administrative appeals available to the taxpayer, the procedures related to such appeals, and the provisions and procedures related to the release of the lien. n75
Similarly, the notice of hearing for the levy must include "in simple and nontechnical terms," the amount of the unpaid tax and the right of the taxpayer to request an administrative hearing within the thirty day period [*465] before the date of the first levy. n76 Further, the levy hearing notice must advise the taxpayer of the Internal Revenue Service's proposed action and the rights of the taxpayer with respect to the proposed action, including a brief statement setting forth (1) the provisions and procedures applicable to the levy and sale of the property, (2) the administrative appeals available to the taxpayer with regard to the levy and sale and the applicable procedures, (3) the alternatives available to the taxpayers which could prevent the levy, such as an installment agreement under I.R.C. section 6159 , and (4) the provisions and procedures relating to redemption of property and release of liens. n77
If the taxpayer requests a lien or levy hearing, the hearing must be held by the Internal Revenue Service's Office of Appeals. The taxpayer is entitled to one hearing regarding the lien or levy with respect to the taxable period to which the unpaid tax specified in the notice relates. The hearing must be held before an impartial officer or employee who has had no prior involvement with respect to the unpaid tax, although the taxpayer may waive this requirement. n78 If the taxpayer receives notices under both sections informing him of his right to a hearing, to the extent it is practicable, the hearings will be held together. n79
I.R.C. section 6320(c) provides that the post-lien hearing before the appeals officer shall be conducted in accordance with the provisions governing I.R.C. section 6330 hearings. n80 However, the guidance provided by I.R.C. section 6330 has proven to be insufficient, leading to appeals to the Tax Court. The confusion has been exacerbated by the statute's failure to provide adequate standards for judicial review and failure to clarify the Tax Court's authority and power to resolve appeals, as shall be discussed later.
I.R.C. section 6330(c)(1) states that the appeals officer must obtain verification that any applicable law or administrative procedure has been met. Unfortunately, the statutory language, legislative history, and regulations are inconsistent regarding when this verification must take place, which has led to confusion as to whether the taxpayer received a [*466] proper hearing. The statute provides that the appeals officer shall obtain the verification "at the hearing." n81 The legislative history also states that the Internal Revenue Service is required to verify at the hearing "that all statutory, regulatory, and administrative requirements for the proposed collection action have been met." n82 However, the regulations do not require the appeals officer to obtain this verification until just prior to issuing his determination. n83 Professor Book suggests that the best course would be for the appeals officer to provide the taxpayer with the verification prior to the hearing, which better enables the parties to resolve their dispute prior to or at the time of the hearing. n84 As shall be discussed below, the Tax Court has been forced to address this issue, but it remains unclear whether the appeals officer's omission to obtain a timely verification can be rectified at the time of judicial review. This is a particularly vexing issue, especially if the Internal Revenue Service furnishes proof to the Tax Court that, in fact, all procedures and laws were met, so that further administrative review and proceedings would be pointless and would only cause further delay in collection. It is unclear whether the Tax Court may rectify the failure, or whether the Tax Court should, and is empowered to, remand the case back to the appeals officer for another, albeit meaningless, hearing.
At the hearing the taxpayer is permitted to raise any relevant issue pertaining to the unpaid tax or the proposed levy, including (1) spousal defenses, (2) challenges to the appropriateness of the collection actions, and (3) offers of collection alternatives, such as an installment agreement, offer in compromise, the posting of a bond, or substitution of other assets. n85 In addition to raising these issues pertaining to collection, the taxpayer may question the underlying tax liability if he did not receive the notice of deficiency or did not otherwise have an opportunity to dispute the tax. n86 As discussed above, a taxpayer receives a notice of deficiency for income, estate and gift, and certain excise taxes. Such notice provides the taxpayer with the opportunity to petition the Tax Court for a redetermination prior to assessment. n87 The statute fails to indicate when a taxpayer will be [*467] considered to have received a notice of deficiency for purposes of I.R.C. sections 6320 and 6330 ; however, the regulations provide that the lack of actual receipt rather than proper mailing is the standard that will be applied. n88 It is not clear whether a bald assertion by a taxpayer that he did not receive a notice is sufficient to enable him to dispute the underlying tax liability at the hearing, especially if the Internal Revenue Service records indicate otherwise. The purpose of the hearings is to ensure that the Internal Revenue Service has not acted in an unduly onerous manner during collection proceedings. n89 To allow a taxpayer to dispute the underlying tax liability merely by asserting failure to receive a notice of deficiency, despite evidence to the contrary, would greatly expand the scope, complexity, and number of pre-collection hearings.
The statute does not define what is meant by "or did not otherwise have an opportunity to dispute such tax liability." n90 Presumably this provision addresses taxes that are not subject to the Tax Court's deficiency procedures such as payroll taxes. n91 It has been interpreted as meaning that the taxpayer did not have the opportunity to dispute the liability at a prior conference with appeals, either before the assessment (for example, during an audit) or after. n92
After the hearing, the appeals officer must issue his determination, which must take into consideration the verification required under I.R.C. section 6330(c)(1) , the issues the taxpayer raised, and whether the proposed collection action balances the need for the efficient collection of taxes with the taxpayer's concern that the collection be no more intrusive than necessary. n93 This vague balancing test acknowledges long-standing case law, which emphasizes how vital the flow of revenue, without undue disruption, is to orderly government, but does not provide any standard for [*468] determining when the manner of collection is too "intrusive" as to be unwarranted. n94 It is difficult to imagine a scenario where collection of a disputed liability is not, to some extent at least, intrusive. Congress has saddled the appeals officer with a difficult task. The appeals officer must balance the objective need of the government for revenue against the taxpayer's subjective preference for another collection method. Neither the statutes nor the regulations provide the appeals officer with standards to apply when weighing efficiency against emotion. n95
2. Judicial Review Provisions
The taxpayer has the right to appeal the determination within thirty days either to the Tax Court or the district court, whichever is appropriate. n96 I.R.C. section 6330(e) provides that if the taxpayer requests a hearing before an appeals officer, the levy actions are suspended during the period that the hearing is pending. If the taxpayer appeals the appeals officer's determination to the Tax Court, the levy remains suspended unless the underlying tax liability is not in dispute and the Internal Revenue Service shows good cause why the levy should not be suspended. n97 Further, if the Internal Revenue Service attempts to levy, the Anti-Injunction statute will not prohibit the taxpayer from obtaining an injunction. n98
The statute does not specify the standard for review on appeal to the Tax Court; however, the legislative history states that if the underlying [*469] liability is in dispute, the review on appeal will be de novo. However, if the collection methods are in dispute, the Tax Court will review the appeals officer's determination under the abuse of discretion standard. n99 The Tax Court has accepted these standards. n100
Neither the statute, nor the legislative history, specifies what powers the Tax Court may exercise or what remedies it may fashion during judicial review. The Tax Court's recent decisions reflect its uncertainty, and the disagreement among its members, as to the Tax Court's authority when reviewing these appeals. An examination of the Meyer, Lunsford, and Nestor cases reveals a court struggling to delineate the parameters of its new appellate role. n101
III. The Tax Court's Interpretation of I.R.C. Sections 6320 and 6330
A. Requirements for Tax Court Jurisdiction
In Meyer, the Tax Court held that an appeals officer's failure to hold a hearing rendered the determination letters invalid, and, therefore, the Tax Court did not have jurisdiction to hear the petitioner's appeal. n102 The Internal Revenue Service issued collection letters to the petitioners for payment of frivolous return penalties for the 1996 and 1997 tax years. n103 Subsequently, the Service sent them final notices of intent to levy, and the petitioners timely requested an I.R.C. section 6330 hearing. n104 However, the appeals officer did not schedule a hearing because his communications with the petitioners led him to believe that they were challenging the collection solely on constitutional grounds. n105 After the appeals officer issued determination letters to petitioners, they wrote to the Appeals Office complaining that they had not received a hearing. n106 The Appeals Office offered to meet with the petitioners, but refused to withdraw the already [*470] issued determination notices. n107 The petitioners appealed to the Tax Court, and the Internal Revenue Service filed motions to dismiss because (1) the appeal was untimely, and (2) the Tax Court did not have jurisdiction over appeals of frivolous return penalties. n108 In response, the petitioners argued that the appeal should be dismissed because the determination letters were invalid and, therefore, the Tax Court did not have jurisdiction. n109 If respondent prevailed because the appeal was untimely, the petitioners would lose the right to appeal to either the Tax Court or the district court, enabling respondent to continue with the collection proceedings. n110 If petitioners prevailed, the respondent could not continue with the collection proceedings, although it was not clear what respondent would have to do to correct the error. It is arguable that respondent would have to reissue the notice of intent to levy and the notice of the right to a hearing, and then hold a collection hearing, if one were requested by the taxpayers.
As a preliminary matter, the Tax Court observed that it "is a court of limited jurisdiction, and we may exercise our jurisdiction only to the extent authorized by Congress." n111 The Tax Court then compared the determination letter to a notice of deficiency. n112 A valid notice of deficiency is the taxpayer's "ticket" to the Tax Court. n113 Without a valid notice of deficiency and a timely petition, the Tax Court does not have jurisdiction over a deficiency action. n114 The Tax Court then reasoned that, by analogy, a valid determination letter and timely appeal are required in order for the Court to exercise jurisdiction over a collection appeal. n115 The appeals officer failed to follow the statute's mandate that a hearing must precede the issuance of a determination letter. n116 Therefore, the determination letters were invalid, and the Tax Court did not have jurisdiction. n117
[*471] One year later, in Lunsford, the Tax Court reversed its holding in Meyer. n118 In Lunsford, the Tax Court held that it did have jurisdiction to consider a collection appeal despite an appeals officer's failure to provide the taxpayer with a timely requested hearing. n119 The Tax Court stated that if it had general jurisdiction over the type of tax at issue, "a "determination' by Appeals and a timely petition are the only requirements for the exercise of our jurisdiction under [ I.R.C.] section 6330 ." n120 However, the judges were very divided over the issue. Only eight of the sixteen judges who heard the case joined in the majority opinion. Three judges concurred in the opinion and five dissented. n121
The circumstances surrounding the Lunsfords' administrative hearing request were similar to those presented in Meyer. The Internal Revenue Service issued a notice of levy to the petitioners who filed a request for a hearing, raising as an issue a supposed lack of a valid summary record of assessment in accordance with the provisions of 26 C.F.R. section 301.6203-1 . n122 The appeals officer sent the petitioners a letter, which [*472] included a Form 4340 and a Certificate of Assessments and Payments, displaying the assessment and its unpaid status. n123 The letter concluded by stating that if the petitioners wished to discuss other issues, such as payment, they should contact the appeals officer, and he would schedule a hearing; otherwise, he would issue a determination letter. n124 The petitioners did not respond, the appeals officer issued the determination, and petitioners appealed. n125
The majority opinion stated that the Tax Court would no longer "look behind the notice of determination" to ascertain its validity. n126 If the notice was facially correct in that it contained a "determination," the Tax Court would exercise jurisdiction. n127 Again, the Tax Court relied on its jurisprudence regarding notices of deficiency to support its position. If a notice of deficiency is facially valid, the Tax Court has jurisdiction. n128 The Tax Court acknowledged the importance of stare decisis, but also recognized that when it had rendered the Meyer decision, the Tax Court was in the "nascent stages" of its I.R.C. section 6330 jurisprudence, and had erred in its judgment, causing needless delay in the resolution of collection cases. n129
After almost a year of experience in dealing with lien and levy cases, we have come to the conclusion that the jurisdictional analysis in Meyer was incorrect and has resulted in unjustified delay in the resolution of cases. Whether there was an appropriate hearing opportunity, or whether the hearing was conducted properly, or whether the hearing was fair, or whether it was held by an impartial Appeals officer, or whether any of the other nonjurisdictional provisions of section 6330 were properly followed, will all be factors that we must take into consideration under section 6330 in deciding such cases. But none of these factors should preclude us from exercising our jurisdiction under section 6330(d), in order [*473] to resolve the underlying dispute in a fair and expeditious manner. n130
Judge Halpern wrote a concurring opinion in which he noted that "review of an administrative action of an agency is not a normal task for us" n131 and argued that the Administrative Procedure Act n132 informs the Tax Court's authority when engaged in judicial review pursuant to I.R.C. section 6330(d)(1) . n133 Judge Halpern stated that although I.R.C. section 6330(d)(1) establishes the Tax Court's jurisdiction to hear appeals from adverse determinations, I.R.C. section 6330(d)(1) does not "specify our remedial powers in such situation." n134 Further, the legislative history n135 did not provide that if the Tax Court found abuse, it was to fashion an alternative. n136 However, he found that the following provisions contained in section 706 of the Administrative Procedure Act regarding a reviewing court's authority to be relevant. n137 "The reviewing court shall ... (2) hold unlawful and set aside agency action, findings, and conclusions found to be - (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law ... (D) without observance of procedure required by law ..." n138
Judge Halpern reasoned that if I.R.C. section 6330 requires a hearing before a determination can be made, then the Tax Court, as a court of review, could set aside the determination as "not in accordance with the law" or "without observance of procedure required by law." n139 However, in order to do so, the reviewing court must have jurisdiction over the matter, which I.R.C. section 6330(d)(1) provides. n140
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B. The Tax Court's Limited Remedial Powers for Collection Appeals
Several months after issuing the Lunsford decision, the Tax Court decided the Nestor case. n141 The facts are relatively simple. The Internal Revenue Service issued to the taxpayer notices of intent to levy and of his right to a hearing. n142 The taxpayer sent the appeals officer a hearing request in which he raised a number of frivolous tax protester arguments and demands. n143 Included among his demands were that the appeals officer furnish the taxpayer at the hearing "verification that "the requirements of any applicable law or administrative procedure have been met,' for example, ... a copy of Form 23C, Summary Record of Assessment, and the "pertinent parts of the assessment' ... ." n144 At the hearing, the taxpayer demanded that the appeals officer provide verification that the requirements of any applicable law or administrative procedure had been met, as required by I.R.C. section 6330(c)(1) . n145 The appeals officer did not provide the taxpayer with written verification, but rather, advised the taxpayer that the hearing was limited to discussing the appropriateness of the proposed collection action, to which action the taxpayer offered no alternative. n146 Subsequently, the appeals officer issued his determination that collection of the tax should proceed. n147 After the hearing, but prior to the Tax Court trial, the appeals officer provided the taxpayer with a Form 4320 reflecting the unpaid assessments. n148
On appeal, the taxpayer argued that the appeals officer's determination to proceed with collection was an abuse of discretion because the taxpayer had not been provided at the hearing with written verification that all applicable laws and administrative procedures had been met. n149 The taxpayer contended that I.R.C. section 6203 , which gives the taxpayer the right to demand written proof of the assessment, is an "applicable law or administrative procedure" within the meaning of I.R.C. section 6330(c)(1) . n150 I.R.C. section 6330(c)(1) obligates the appeals officer at the hearing to verify that the requirements of any applicable law or [*475] administrative procedure had been met; however, the taxpayer had not received proof of assessment under I.R.C. section 6203 either prior to or at the time of the hearing. n151 Therefore, the taxpayer argued, the appeals officer's determination to proceed with collection was an abuse of discretion because the statutory requirements had not been satisfied. n152 The judges did not agree on whether I.R.C. section 6203 is an "applicable law or administrative procedure" within the meaning of I.R.C. section 6330(c)(1) , and, if it was, whether the appeals officer's failure to provide the taxpayer with the record of assessment at the hearing was reversible error. n153
The majority declined to decide whether I.R.C. section 6203 was an "applicable law or administrative procedure" under I.R.C. section 6330(c)(1) , n154 holding that regardless of whether it was, the appeals officer's failure to provide the record of assessment at the hearing had not prejudiced the taxpayer. n155 The Form 4340, which the taxpayer received prior to the Tax Court trial, indicated that the tax had been assessed and remained unpaid. Therefore, the majority held that it was "clear that no bona fide interest would be served by further delaying the collection of petitioner's tax liability." n156
In his concurrence, Judge Swift took the position that the "right of taxpayers under section 6203 is not part of respondent's verification requirements under [ I.R.C.] section 6330(c)(1) ." n157 Further, the verification requirement under I.R.C. section 6330(c)(1) is independent of the taxpayer's right to raise "relevant" issues or "legitimate" concerns under I.R.C. sections 6330(c)(2) and (c)(3). n158 Therefore, the appeals officer had not violated his duties under I.R.C. section 6330(c) by failing to [*476] provide the taxpayer with the record of assessment or by refusing to permit the taxpayer to dispute the assessment at the hearing. n159
In direct contrast to the majority opinion and Judge Swift's concurrence, Judge Foley, in a dissent joined by Judge Chiechi, argued that I.R.C. section 6203 was an "applicable law or administrative procedure." n160 Therefore, the appeals officer's failure to furnish the taxpayer with the record of assessment and refusal to permit the taxpayer to discuss the assessment deprived the taxpayer of his right to raise relevant issues at his hearing. n161 The dissent took the position that the only appropriate remedy was for the taxpayer to be given another hearing, and that the majority did not have the right to ignore the statute's mandates even if another hearing would serve no bona fide interest. n162 Judge Foley argued that compliance with the statute was itself a bona fide purpose. n163
Judge Halpern wrote a concurring opinion in which he adopted a position that provided a theoretical underpinning to the majority's position that any error that might have occurred before the appeals officer could be disregarded as "harmless." n164 He argued that various provisions of the Administrative Procedure Act n165 informed the Tax Court's review of the appeals officer's determination, and that section 706 of the Administrative Procedure Act empowered the Tax Court to disregard errors that do not prejudice the taxpayer. n166 Specifically, Judge Halpern relied on the "rule of prejudicial error" contained in the Administrative Procedure Act:
The reviewing court shall ... (2) hold unlawful and set aside agency action, findings, and conclusions found to be - (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law ... (D) without observance of procedure required by law ...
In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a [*477] party, and due account shall be taken of the rule of prejudicial error. n167
Judge Halpern observed that "the doctrine of harmless error is as much a part of judicial review of administrative action as of appellate review of trial court judgments." n168 He posited that the Tax Court, when deciding appeals from Internal Revenue Service collection determinations, should adopt the jurisprudence that has evolved regarding the parameters of district court and circuit court review of agency action. n169
Judge Halpern's position in his concurring opinions in Lunsford and Nestor is that the Administrative Procedure Act vests the Tax Court with standards for review of agency action that fills in some, but not all of the gaps, left by Congress in defining the ability of the Tax Court to perform meaningful review of a proposed collection action. The Administrative Procedure Act, by itself, cannot vest a court with jurisdiction to review agency action. The jurisdiction must come from some other enabling statute. n170 I.R.C. section 6330 (d)(1) serves as an enabling statute, waiving sovereign immunity for the limited purpose of permitting the Tax Court to review the propriety of the Internal Revenue Service's proposed collection action. However, I.R.C. section 6330 does little else. It simply states, "The person may, within 30 days of a determination under this section, appeal such determination-(A) to the Tax Court." n171 It does not say what the court is supposed to do. It does not provide a standard for review, nor does it authorize the Tax Court to reverse, remand, modify, or affirm the Internal Revenue Service determination.
It is common for the enabling statute to inform the reviewing court as to what action it may take. For example, the Court of Appeals for Veterans' Claims (Veterans' Court), an Article I court, has "exclusive jurisdiction to review decisions of the Board of Veterans' Appeals." n172 The Veterans' Court's scope of review, contained in 38 U.S.C. section 7261 is modeled [*478] after section 706 of the Administrative Procedure Act, n173 and permits the Veterans' Court to "hold unlawful and set aside decisions, findings ... found to be - (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law ... or (D) without observance of procedure required by law." n174 A different section, 38 U.S.C. section 7252 (a), empowers the Veterans' Court to "affirm, modify, or reverse a decision of the Board or to remand the matter, as appropriate." n175
Congress failed to authorize explicitly the Tax Court to take similar action with regard to I.R.C. section 6330(d)(1) appeals. Nowhere in the enabling statute or the legislative history is the Tax Court empowered to affirm, reverse, remand, or modify the Internal Revenue Service's determination. The Tax Court is a court of limited jurisdiction and only has such powers as given to it by Congress. n176 Whether or not the Tax Court has inherent equitable powers has been the subject of debate. n177 I.R.C. section 6330 is essentially concerned with "fairness"-an equitable concept. If the Tax Court were to conclude that a particular collection method were unfair, could the Tax Court modify the Internal Revenue Service's determination and substitute a different collection method? In addition, Professor Book has raised the question as to whether the Tax Court could modify the proposed collection action if the taxpayer's circumstances change between the time of the administrative hearing and the Tax Court's review, rendering what had been a fair collection method into one that has become onerous. n178
Judge Halpern recognized and attempted to address some of these issues by turning to section 706 of the Administrative Procedure Act. n179 Section 706 provides that a "reviewing court shall ... hold unlawful and [*479] set aside agency action." n180 However, it does not provide that a reviewing court can reverse, remand, affirm, or modify. Section 706 authorizes a reviewing court to set aside an agency determination, but does not provide what remedy, if any, the reviewing court may provide. n181 Because I.R.C. section 6330(d)(1) does not provide for the Tax Court to remand or modify the Internal Revenue Service's determination, the Tax Court may be limited merely to stating that the Internal Revenue Service's proposed collection action is improper, with the result that the collection action remains in limbo until the Internal Revenue Service itself decides either to correct its procedural error or desist from collection altogether. n182 This is an unsatisfactory result for all parties concerned. Congress needs to amend I.R.C. section 6330(d)(1) to authorize the Tax Court to fashion a remedy when the proposed collection action is "an abuse of discretion." n183 However, this leads to the question of whether Congress can give the Tax Court these powers without violating Article III of the Constitution. n184
IV. Constitutional Restrictions on the Use of Article I Courts
A. The Tax Court's Evolution From Agency to Article I Court
Article III of the Constitution states that the "judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish." n185 Further, the Justices of the Supreme Court and the inferior federal courts "shall hold their Offices during good Behaviour, and shall, ... receive for their Services, a Compensation, which shall not be diminished during their [*480] Continuance in Office." n186 Article III then lists nine categories of cases, "in Law and Equity," to which the judicial power extends, including "controversies to which the United States shall be a party." n187 The Constitution did not obligate Congress to create inferior federal tribunals, but required that if Congress chose to do so, the judges must have their salary and tenure protected. n188
Read literally, Article III appears to require that the "judicial power" must reside only in federal tribunals whose judges must enjoy tenure and salary protection. n189 However, even the framers of the Constitution did not contemplate that Article III would be interpreted in that way. The first Congress enacted legislation authorizing the executive branch to resolve disputes involving claims to veterans' benefits and customs duties. n190 As far back as 1828, the United States Supreme Court has upheld the use of non-Article III tribunals under certain circumstances. n191 Non-Article III tribunals include both administrative agencies and legislative courts. n192 [*481] Congress usually creates these non-Article III tribunals pursuant to one of its enumerated powers under Article I of the Constitution together with the necessary and proper clause contained therein. n193 Article I courts function as courts in their application of law to facts in order to render opinions; however, their judges do not enjoy salary and tenure protection. Further, they do not have "inherent powers" but only such powers as are given to them by statute. n194
The Tax Reform Act of 1969 changed the Tax Court's status from an independent agency in the executive branch to that of a court of record under Article I of the Constitution. n195 The Board of Tax Appeals (BTA), the predecessor to the Tax Court, was created in 1924 as an independent agency within the executive branch for the purpose of providing pre-assessment review of tax disputes. n196 However, the BTA was not authorized to hand down final decisions, although its findings were taken as prima facie evidence of the facts if the losing party filed suit in the courts. In 1926, Congress passed legislation making the BTA's decisions final, with appeal available to the Circuit Court of Appeals. n197 In 1942, Congress changed the name of the Board of Tax Appeals to the Tax Court of the United States and changed the designation of its Board "members" [*482] to "judges." n198 However, its status remained that of an independent agency in the executive branch. n199
Between 1943 and 1967, legislation was introduced on a number of occasions to change the Tax Court's status to that of an Article III court. n200 The last occasion occurred in 1967 when Representative Wilbur Mills and Senator Russell Long introduced identical bills in the House and Senate. n201 As chances for passing legislation to change the Tax Court's status to an Article III court dimmed, Representative Mills introduced an alternative bill in 1969 giving the Tax Court legislative court status under Article I. n202 The Senate report states that the reason for changing the Tax Court's status to an Article I court was to underscore its independence as an adjudicatory body.
Since the Tax Court has only judicial duties, the committee believes it is anomalous to continue to classify it with quasi-judicial executive agencies that have rulemaking and investigatory functions. The status of the Tax Court and the respect accorded to its decisions are high among those familiar with its work. However, its constitutional status as an executive agency, no matter how independent, raises questions in the minds of some as to whether it is appropriate for one executive agency to be sitting in judgment on the determinations of another executive agency. n203
The terms of office for the Tax Court judges were increased from twelve years to fifteen years, and judges continued to be appointed by the President, with the advice and consent of the Senate. n204
Because the Tax Court is an Article I court, Congress cannot empower the Tax Court in any manner it deems fit or expedient without running the [*483] risk of violating the principle of separation of powers and aggrandizing power to itself at the expense of the judicial branch. In a trio of cases, the Supreme Court attempted to devise standards or tests for determining when a grant of authority to a non-Article III tribunal is an impermissible encroachment on the authority of the Article III courts. n205 In Northern Pipeline, the Supreme Court espoused a categorical test, which the Court abandoned almost immediately in Union Carbide and Schor for a balancing test.
B. Northern Pipeline's Categorical Test
In Northern Pipeline, the Supreme Court held in a plurality decision, that Congress had violated the principle of separation of powers and had encroached on the judicial power by enacting the Bankruptcy Act of 1978 (the Act). n206 The Act established a bankruptcy court in each federal district as an adjunct to the district court. n207 The bankruptcy judges, who did not enjoy tenure or salary protection, n208 were given "jurisdiction over all "civil proceedings arising under Title 11 [the Bankruptcy Title] or arising in or related to cases under Title 11.'" n209 As a result, the bankruptcy judges were "vested with all of the "powers of a court of equity, law, and admiralty,' except that they "may not enjoin another court or punish a criminal contempt not committed in the presence of the judge.'" n210 The bankruptcy court could adjudicate rights arising under both federal and state law. n211
The plurality opinion limited Article I courts to three "historical" exceptions: territorial courts, courts-martial and tribunals adjudicating "public rights" cases. n212 Public rights is a nebulous concept. The term first appeared in Murray's Lessee where the court stated:
We think it proper to state that we do not consider congress can ... withdraw from judicial cognizance any [*484] matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty... . At the same time there are matters, involving public rights, which may be presented in such form that the judicial power is capable of acting on them, and which are susceptible of judicial determination, but which congress may or may not bring within the cognizance of the courts of the United States, as it may deem proper. n213
In Northern Pipeline, the Supreme Court defined public rights cases as suits arising between the government and persons subject to its authority regarding to matters that could have been determined exclusively by the legislative or executive branch. n214 Public rights are created by statute, as opposed to causes of action that existed at common law, in equity, or in admiralty. n215
The plurality also acknowledged that Congress could create adjuncts to the Article III courts as long as the "essential attributes of the judicial power" remained with the Article III court. n216 Here, the Supreme Court found that the bankruptcy court had usurped the essential attributes of judicial power, and, therefore, the court was unconstitutional. n217
C. Schor Analysis of Individual's Right to an Independent Adjudicator
The Northern Pipeline decision was sharply criticized by commentators as unduly restrictive and not in touch with the realities of the administrative state. n218 Shortly thereafter, the Supreme Court in Thomas v. Union Carbide Agricultural Products Co., moved away from Northern Pipeline's categorical approach and adopted a balancing test for addressing Article III concerns. n219 In her opinion, which commanded a majority of five, Justice O'Connor noted that Northern Pipeline only represented the [*485] view of a plurality and stated that "practical attention to substance rather than doctrinaire reliance on formal categories should inform application of Article III." n220 Justice O'Connor then went on to state that the distinction between public and private rights did not provide a bright-line test for determining when the requirements of Article III must be applied.
The Northern Pipeline plurality construed the Court's prior opinions to permit only three clearly defined exceptions to the rule of Article III adjudication: military tribunals, territorial courts, and decisions involving "public" as opposed to "private" rights... .
This theory that the public rights/private rights dichotomy of Crowell and Murray's Lessee v. Hoboken Land & Improvement Co., provides a bright-line test for determining the requirements of Article III did not command a majority of the Court in Northern Pipeline. Insofar as appellees interpret that case and Crowell as establishing that the right to an Article III forum is absolute unless the Federal Government is a party of record, we cannot agree... . Nor did a majority of the Court endorse the implication of the private right/public right dichotomy that Article III has no force simply because a dispute is between the Government and an individual. n221
The Union Carbide Court then balanced Congress's need for speedy administrative resolution of the claims at issue against the danger of encroachment on the judicial power, and found the danger to be minimal. n222
In Commodity Futures Trading Commission v. Schor the Supreme Court elaborated on the balancing test adopted by the majority in Union Carbide. n223 The Court, in another opinion written by Justice O'Connor, stated that Congress's interest in providing for an "inexpensive and expeditious alternative forum" must be weighed against the purposes of Article III. n224 Article III serves to preserve both the litigant's interest in having claims decided by an impartial judiciary and the role of an [*486] independent judiciary within our tripartite system. n225 Therefore, Article III protects both individual and structural interests. n226
With regard to the individual interest, "Article III does not confer on litigants an absolute right to the plenary consideration of every nature of claim by an Article III court." n227 Further, an individual can waive his right to an impartial and independent adjudication by an Article III court. n228 The Court found it important that the petitioner had a choice whether to have his claim heard by the Commodity Futures Trade Commission or to file suit in district court. n229 By choosing to proceed before the Commission, the petitioner effectively waived any right to proceed in district court, and, therefore, could not claim that he was denied due process of law.
Unlike the petitioner in Schor, taxpayers do not have a choice of forum with regard to collection hearings. n230 At the present time, the Tax Court has exclusive jurisdiction over some, and eventually may have jurisdiction over all, collection hearings. A taxpayer is not given the choice of having his claim heard by a judge with salary and tenure protections. However, despite being labeled by Congress as "due process" collection hearings, in fact, they are not. n231 Phrased another way, these hearings are not necessary to satisfy due process with regard to tax collection. There is no evidence that Congress intended to nullify the Cheatham and Phillips decisions that held due process is not offended if a taxpayer's opportunity to dispute his tax liability is provided after collection of the tax. n232 It is a firmly established principle in our tax jurisprudence that due process only requires an opportunity for a post-collection hearing with regard to taxes. n233 It would be strange indeed if Congress intended to repeal the effect of this long-standing case law and make no mention of it in the legislative history [*487] to the Restructuring and Reform Act of 1998. n234 Further, Congress did not repeal the statutory provisions regarding refund procedures in the district court, which permit a taxpayer to file suit for a refund after collection, nor did Congress repeal the Tax Court deficiency proceedings. n235 A taxpayer's right to choose either to file for a pre-assessment determination by an Article I court, or to file for a refund in an Article III court remains intact. n236
It is important to note that a collection hearing conducted in accordance with the I.R.C. section 6330 as presently constituted would not satisfy due process. Due process requires, at a minimum, the right to be heard in a meaningful way at a meaningful time. n237 The taxpayer is afforded such a limited opportunity to protest the tax collection (and if he did not receive the notice of deficiency or otherwise have an opportunity to protest the liability, the opportunity to protest the underlying tax), that it could not possibly be deemed a meaningful opportunity to present his case. The taxpayer does not have the right to subpoena witnesses or records, or to question witnesses under oath. n238 Even more importantly, the taxpayer's hearing is not conducted by an independent adjudicator. n239 In addition, the only record of what transpired at the hearing is the determination letter prepared by the appeals officer some time after the hearing. n240 Regardless of whether an Article III court or the Tax Court was charged with the task of reviewing the taxpayer's opportunity to present fully his case before the [*488] appeals officer, the record is so incomplete that no meaningful judicial review of the proceedings that due process was satisfied could take place to ensure. It is impossible to determine whether the taxpayer received a meaningful opportunity to be heard sufficient for due process purposes.
D. Schor Four Factor Separation of Powers Analysis
With regard to the structural interest, Article III is designed to protect encroachment by the executive or legislative branch on the functions of an independent judiciary. n241 One manner in which the executive or legislative branch can aggrandize their powers by encroaching on the judicial branch's power is by transferring jurisdiction from Article III courts to non-Article III tribunals. n242 When Article III structural interests are at issue, litigants cannot by waiver or consent legitimize an improper transfer of judicial power to a non-Article III tribunal. n243 In Schor, the Supreme Court identified four factors that must be weighed when determining if a delegation of power to a non-Article III tribunal will pass constitutional muster. No single factor should necessarily be given more weight than another nor should any one be determinative of the issue. The four factors are: (1) "the extent to which the "essential attributes of judicial power' are reserved to Article III courts;" (2) "conversely, the extent to which the non-Article III forum exercises the range of jurisdiction and powers normally vested only in Article III courts;" (3) "the origins and importance of the right to be adjudicated" by the non-Article III tribunal; and (4) "the concerns that drove Congress to depart from the requirements of Article III." n244
1. Extent Essential Attributes Remain With an Article III Court
The Tax Court may well become the only court with appellate authority to review the collection hearings. n245 At the present time, the Tax Court has exclusive jurisdiction over some of these hearings, and it remains unresolved whether further appellate review is available in the circuit [*489] courts of appeal. n246 At first glance, this would lead one to conclude that Congress has removed the essential attributes of judicial power from the Article III courts. However, the Tax Court has exclusive jurisdiction over only a small portion of the entire tax collection process. In fact, the Article III courts continue to have paramount jurisdiction over tax collection proceedings to the extent they are subject to judicial review. When Congress enacted the legislation giving the taxpayers the right to demand pre-collection hearings, Congress left intact all other Article III judicial actions that had existed previously. The district courts retain authority to hear suits brought by taxpayers under I.R.C. section 7432 for civil damages if the Internal Revenue Service knowingly or negligently fails to release a tax lien in accordance with I.R.C. section 6325 . I.R.C. section 6325 obligates the Internal Revenue Service to release the lien if the tax liability has been paid, becomes unenforceable, or if the Internal Revenue Service has accepted the taxpayer's bond. The district courts also retain jurisdiction over suits filed by taxpayers under I.R.C. section 7433 for civil damages resulting from the certain unauthorized collection actions by the Internal Revenue Service. n247
Most importantly, the district courts retain jurisdiction over suits for refund. n248 Even if the Internal Revenue Service prevails in the collection hearing in the Tax Court, the taxpayer remains entitled to file suit in the district court for a refund after the tax has been paid, unless the taxpayer availed himself of the deficiency proceedings available in the Tax Court. n249 Although the Tax Court may have jurisdiction over the method of tax collection, the district court has jurisdiction over the fundamental issue of whether the tax is owed. The taxpayer's right to due process before an Article III body remains intact. In addition, Congress left in place the taxpayer's right to file a petition with the Tax Court for pre-assessment and [*490] pre-payment review of income, estate and gift, and certain excise taxes. n250 Although the Tax Court is an Article I court, its decisions are subject to review by the Article III courts of appeals. n251
Even if the Tax Court is given exclusive jurisdiction over the collection hearings, the essential attributes of judicial power remain with the Article III courts as to the taxpayer's ultimate liability. Therefore, this factor in the Schor analysis does not weigh against the Tax Court.
2. Extent of Non-Article III Court's Jurisdiction and Powers
In Schor, the Supreme Court found acceptable the Commodity Futures Exchange Commission's exercise of jurisdiction over a "particularized area of law." n252 In contrast, the Supreme Court in Northern Pipeline found that Congress's grant of jurisdiction to the bankruptcy courts over all civil proceedings, including claims arising under state law, to be overly broad. n253 Congress granted the Tax Court relatively limited jurisdiction over a particularized area of law, as in Schor. The Tax Court's jurisdiction is limited to reviewing the propriety of the Internal Revenue Service's proposed collection action and the underlying tax deficiency if the taxpayer did not receive the notice or did not otherwise have an opportunity to dispute the tax liability. The Tax Court's authority to review the proposed collection action is a relatively modest grant of jurisdiction and would appear to be within the confines that the Supreme Court found acceptable in Schor. n254 Further, a taxpayer has never had a right in either common law [*491] or equity to demand judicial review of a proposed collection. n255 This right was created by Congress which "clearly has the discretion, in defining that right, to ... prescribe remedies; it may also provide that persons seeking to vindicate that right must do so before particularized tribunals created to perform the specialized adjudicative tasks related to that right." n256
The Tax Court's authority to review the underlying tax liability is more problematic. If the taxpayer was entitled to, but did not receive, the notice of deficiency, or if the taxpayer did not otherwise have the opportunity to dispute the tax liability, the Tax Court may review the underlying tax on a de novo basis. n257 I.R.C section 6330(c)(2)(B) does not define when a taxpayer would be deemed to have received the notice. For deficiency proceedings, I.R.C. section 6212(b) provides that the Internal Revenue Service may send the notice of deficiency to the taxpayer's last known address, and I.R.C. section 6213(a) provides that the ninety-day period for filing a petition is triggered by the notice being mailed to the taxpayer's last known address. The ninety-day period runs even if the taxpayer did not actually receive the notice. However, for collection hearing purposes, the regulations provide in effect that "actual receipt" is the standard. n258 The phrase "did not otherwise have an opportunity to dispute such tax liability" has been interpreted as addressing those situations where a taxpayer is not entitled to a notice of deficiency, such as for a payroll tax, and did not have the opportunity to protest the underlying tax during a meeting with the Appeals Office, for example, during an audit. n259
The Tax Court's authority to review the underlying tax liability in these circumstances raises several troubling issues. If the taxpayer can demonstrate that the notice of deficiency was mailed to his last known address, but he did not actually receive the notice, the Tax Court will [*492] review his tax liability on a de novo basis. n260 It is not clear if this would preclude the taxpayer from filing a refund claim later on in the district court. Ordinarily, a taxpayer cannot file a refund claim if his deficiency has been redetermined by the Tax Court. n261 However, the taxpayer in the collection hearing situation has not had a pre-assessment review of his deficiency by the Tax Court conducted in accordance with the deficiency procedures set forth in I.R.C. sections 6211 - 16 . Further, if the Tax Court's collection review decisions are not subject to judicial review by an Article III court, serious due process issues are implicated. n262 Additionally, if the taxpayer cannot file a refund suit, and if the Tax Court's determination is not subject to judicial review, then the essential elements of judicial power no longer remain with the Article III courts, thus violating the first element of the Schor test. However, if the taxpayer can file a refund action, he has been permitted to dispute his underlying tax liability in two different forums, thereby wasting judicial resources. In addition, taxpayers who are not otherwise entitled to avail themselves of the Tax Court's deficiency proceedings, and who did not otherwise have the opportunity to dispute the tax liability, may now have their underlying liability heard in the Tax Court. Again, this is a tremendous waste of judicial resources.
If Congress were to amend I.R.C. section 6330 so that a taxpayer whose underlying tax liability was heard by the Tax Court could not file a refund action, it would be a backdoor way of greatly expanding the Tax Court's jurisdiction and certainly would raise corresponding due process issues. Congress should amend I.R.C. section 6330 and either (1) restrict Tax Court review strictly to the propriety of the Internal Revenue Service's proposed collection action, or (2) clarify both how searching the Tax Court's review of the taxpayer's underlying liability should be and that the taxpayer is not precluded from filing a subsequent refund action. If Congress were to do so, or if case law interprets I.R.C. section 6330 in accordance with the above restrictions, then the second element of the Schor test would be satisfied with regard to the Tax Court's jurisdiction.
[*493] However, in addition to jurisdiction, the second element of the Schor test also addresses a non-Article III tribunal's powers. n263 As noted previously, Congress did not specify what powers the Tax Court could exercise when reviewing appeals from proposed collection actions. n264 The question then becomes what powers the Tax Court may exercise before running afoul of Article III under the second element of the Schor test.
If the Tax Court were to find that the appeals officer had abused his discretion in rejecting an offer of compromise or an installment agreement, I.R.C. section 6330 does not state whether the Tax Court is empowered to modify the offer or installment agreement. Further, if the Tax Court finds that the taxpayer's circumstances have changed between the time of the administrative hearing and the hearing before the Tax Court, so that a previously reasonable offer or installment agreement has become onerous, I.R.C. section 6330 does not state whether the Tax Court may exercise equitable powers and modify the offer or agreement.
Since the statute fails to empower the Tax Court, the question then arises whether the Tax Court may apply equity without running afoul of Article III. n265 If the Tax Court were free to use equity in order to assume jurisdiction over causes of action that are not authorized by statute, it is doubtful that the second element of the Schor test would be satisfied. The Tax Court could use equity to assume jurisdiction over issues beyond the purview of its enabling statute, n266 and thereby create an improper intrusion into the "essential attributes" of the Article III courts. n267 However, equity does not always refer to a court's exercise of jurisdiction, but also to the application of equitable principles to cases that are already properly before it pursuant to its statutory grant of jurisdiction over the subject matter. n268 There is a distinction between a court expanding its jurisdiction through equitable powers and applying equitable principles in disposition of cases that come within its jurisdiction. n269
The existence and extent of the Tax Court's inherent equitable powers has been the subject of debate since its existence as an executive agency. [*494] The Tax Court judges are divided on the issue. The majority believes that the Tax Court has at least some equitable powers despite the lack of statutory authorization, and several judges believe that the Tax Court may exercise the full panoply of equitable powers. n270 The United States Supreme Court has held that the Board of Tax Appeals, the predecessor to the Tax Court and an agency in the executive branch, did not have equitable powers. In Commissioner v. Gooch Milling & Elevator Co., the Board of Tax Appeals was not allowed to give effect to an equitable defense raised by the taxpayer. n271 In Gooch Milling, the taxpayer had discovered that as a result of an error in the valuation of its inventory, the taxpayer had overpaid its taxes for 1935 and underpaid them for 1936. n272 A refund for the 1935 taxes was barred by the statute of limitations, but the taxpayer raised the doctrine of equitable recoupment as an affirmative defense or offset to the 1936 deficiency. n273 The United States Supreme Court held that, absent explicit congressional authorization, the Board of Tax Appeals's limited jurisdiction prohibited it from applying equitable principles. n274
We are not called upon to determine the scope of equitable recoupment when it is asserted in a suit for refund of taxes in tribunals possessing general equity jurisdiction. But its use in proceedings before the Board is governed by the circumscribed jurisdiction of that agency. The Internal Revenue Code, not general equitable principles, is the mainspring of the Board's jurisdiction. Until Congress deems it advisable to allow the Board to determine the overpayment or underpayment in any taxable year other than the one for which a deficiency has been assessed, the Board must remain impotent when the plea of equitable recoupment is based upon an overpayment or underpayment in such other year. n275
Subsequently, in Estate of Mueller v. Commissioner, the Tax Court held that it had jurisdiction to consider the affirmative defense of equitable recoupment when the defense is raised in a case over which the Tax Court [*495] otherwise has jurisdiction. n276 The Sixth Circuit reversed the Tax Court, relying on the Supreme Court's decision in Gooch Milling, and stating that "the Tax Court's jurisdiction cannot extend beyond its statutory confines to encompass an equitable remedy such as recoupment because the Tax Court "is a court of limited jurisdiction and lacks general equitable powers.'" n277
The Tax Court in Estate of Branson v. Commissioner rejected the Sixth Circuit's position, arguing that the Sixth Circuit failed to appreciate the difference between the Board of Tax Appeals and the Tax Court, and that Gooch Milling and its progeny were not controlling. n278
The difference between an agency of the Executive Branch and an Article I court is material to this issue. "The Tax Court's function and role in the federal judicial scheme closely resemble those of the federal district courts, ...[and it] exercises its judicial power in much the same way as the federal district courts exercise theirs." Freytag v. Commissioner, supra at 891. Moreover, in deciding cases over which we have jurisdiction "we have applied the equity-based principles of waiver, duty of consistency, estoppel, substantial compliance, abuse of discretion, laches, and the tax benefit rule." n279 Thus, this Court should be properly viewed as exercising full judicial power within its limited subject matter jurisdiction. n280
Judge Parr was joined in her majority opinion by twelve other judges. n281 Judge Chabot, joined by two other judges, dissented on the ground that the [*496] Tax Court is not the equivalent of a district court and does not possess the powers of a district court. n282 Further, a court does not possess equitable powers merely by virtue of it being a court. n283
Judge Laro wrote a concurrence, in which he was joined by five other judges, with the purpose of emphasizing that the Tax Court not only had equitable powers, but also "is a court of law that has the authority to apply all of the judicial powers of a District Court." n284 Judge Laro also reconciled the Supreme Court's dicta, in Commissioner v. McCoy that the Tax Court lacks "general equitable powers" with the majority's holding. n285 Taken in context, the Supreme Court's position was that the Tax Court could not use equitable principles to expand its subject matter jurisdiction; McCoy did not address the issue of whether the Tax Court could apply equitable principles to cases properly within its jurisdiction. Judge Laro's position has been supported by other courts. n286
Since rendering its decision in Gooch Milling, the United States Supreme Court has not directly addressed the issue of whether the Tax Court has equitable powers, although in United States v. Dalm, the Court stated "we have no occasion to pass upon the question whether Dalm could have raised a recoupment claim in the Tax Court," n287 leaving the door open on the issue.
Because of the uncertainty regarding the Tax Court's equitable powers, Congress needs to delineate the parameters of the Tax Court's authority when resolving appeals from proposed collections. However, equity is a part of the protected core of judicial power reserved to the Article III courts. n288 Although the Supreme Court has never addressed the question of whether Congress can so empower the Tax Court, the Supreme Court takes an expansive view of the Tax Court's proper sphere of judicial power. In Freytag v. Commissioner, n289 the Supreme Court addressed separation of powers concerns with regard to the Tax Court in the context of the [*497] Appointments Clause. n290 In Freytag, the petitioner, who was disappointed in a decision rendered by a special trial judge and adopted by the Chief Judge, contended that the Appointments Clause prohibited the Chief Judge of the Tax Court from appointing special trial judges. n291 The Appointments Clause provides as follows:
He [the President] ... shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the Supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law; but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments. n292
Thus, the Constitution limits congressional discretion to vest power to appoint "inferior Officers" in three sources: the President, Heads of Departments, and Courts of Law. Petitioners argued that a special trial judge is an inferior officer, and that the Tax Court does not fall within any of the Constitution's three repositories of the appointment power because it is not a court of law. n293 Petitioner contended that a court of law is restricted to Article III courts because the Constitution only mentions Article III courts, and nowhere does it refer to Article I or legislative courts. n294
After concluding that an Article I court, which exercises judicial power, is a court of law within the meaning of the Appointments Clause, n295 the Supreme Court examined the Tax Court's functions to define its constitutional status and its role in the constitutional scheme.
The Tax Court exercises judicial, rather than executive, legislative, or administrative, power. It was established by Congress to interpret and apply the Internal Revenue Code in disputes between taxpayers and the Government. By [*498] resolving these disputes, the court exercises a portion of the judicial power of the United States.
The Tax Court exercises judicial power to the exclusion of any other function. It is neither advocate nor rulemaker. As an adjudicative body, it construes statutes passed by Congress and regulations promulgated by the Internal Revenue Service. It does not make political decisions.
The Tax Court's function and role in the federal judicial scheme closely resemble those of the federal district courts, which indisputably are "Courts of Law." Furthermore, the Tax Court exercises its judicial power in much the same way as the federal district courts exercise theirs. n296
Aside from the unresolved concerns involving the Tax Court's authority to review de novo underlying tax liabilities at the collection hearing, it does not appear that Congress has empowered the Tax Court beyond what the Supreme Court defines as the Tax Court's role in the judicial scheme. Further, the Tax Court is sufficiently insulated from the political branches to assuage any separation of powers concerns that might arise from a grant of equitable powers. Therefore, the second element of the Schor test is satisfied.
3. Origins and Importance of the Right Implicated
Although some commentators have questioned whether taxation should properly be included within the category of matters that are labeled "public rights," n297 the Supreme Court does consider taxation a public right. n298 The Schor Court believed that the danger of encroachment on the judicial powers of the Article III courts is significantly reduced when public rights are decided by a non-Article III tribunal. n299 "In essence, the public rights doctrine reflects simply a pragmatic understanding that when Congress selects a quasi-judicial method of resolving matters that "could be [*499] conclusively determined by the Executive and Legislative Branches,' the danger of encroaching on the judicial powers is reduced." n300
Permitting the Tax Courts to resolve disputes regarding the propriety of the collection hearing should not run afoul of the third element of the Schor balancing test as long as the Article III courts retain jurisdiction over refund actions. n301
4. Reasons for Departure from Article III Requirements
Congress enacted I.R.C. sections 6320 and 6330 with the intention of correcting perceived abuses by the Internal Revenue Service during the collection process and protecting taxpayers from onerous collection methods. n302 Congress did not diminish the authority of the Article III courts by enacting this legislation, but merely added an additional level of review before the Internal Revenue Service could take final collection action. The goal of making the government more responsive and more answerable to the public cannot be gainsaid. Whether the scales have been tipped too far in favor of the taxpayers to the detriment of the government's ability to collect revenue remains to be seen. However, it would be difficult for Congress to aggrandize power to itself at the expense of the Article III courts by empowering the Tax Court. As stated by the Supreme Court in Freytag v. Commissioner:
The Tax Court exercises judicial power to the exclusion of any other function. It is neither advocate nor rulemaker. As an adjudicative body, it construes statutes passed by Congress and regulations promulgated by the Internal Revenue Service. It does not make political decisions.
... .
The Tax Court remains independent of the Executive and Legislative Branches Its decisions are not subject to review by either the Congress or the President. n303
Therefore, the fourth element of the Schor test is satisfied.
[*500]
V. Conclusion
The Tax Court's jurisdiction over appeals from proposed collection actions raises concerns about whether Congress is encroaching on the judicial power of the Article III courts. One solution would be for Congress to vest exclusive jurisdiction over these actions in the district court. However, Congress is considering giving the Tax Court exclusive jurisdiction, n304 so such a change is unlikely. Another solution would be for Congress to change the Tax Court's status to that of an Article III court, but Congress has consistently displayed hostility to such a proposal. n305 Therefore, the issue remains whether an Article I court may exercise jurisdiction over these appeals without running afoul of Article III.
Applying the standards promulgated by the Supreme Court in Northern Pipeline, Thomas, and Schor leads to the conclusion that the Tax Court may consider the propriety of the Internal Revenue Service's proposed collection actions without violating the individual's right to an independent adjudicator or raising separation of powers concerns. n306 Prior to enacting I.R.C. sections 6320 and 6330 , the propriety of a proposed collection action was an issue committed entirely to the discretion of the executive branch. Therefore, permitting the Tax Court to review a proposed collection does not intrude on the role of the Article III courts.
However, the Tax Court's authority to review on a de novo basis the taxpayer's underlying liability raises due process and separation of powers concerns. In those situations, the Tax Court is no longer simply reviewing the propriety of a collection method, but is determining the taxpayer's underlying liability. As long as a taxpayer, who has not already availed himself of the Tax Court's pre-assessment deficiency proceedings, is not precluded from bringing a subsequent refund action in the district court, the Tax Court's jurisdiction over these collection issues should pass constitutional muster. The better course would be for Congress to limit appeals from proposed collection actions to review of the propriety of the proposed collection method.
With regard to the appeals that would remain within the Tax Court's jurisdiction, Congress needs to clarify and define what remedial powers the Tax Court may exercise. A review of the Meyer, Lunsford, and Nestor [*501] decisions reveals that the Tax Court is struggling to delineate the parameters of its new, appellate role. This struggle is complicated by the Tax Court's status as an Article I court, and thus, a court of limited jurisdiction without inherent powers. n307 In order for the Tax Court to be able to render meaningful relief when it finds that the Internal Revenue Service has abused its discretion with regard to a proposed collection, Congress must give the Tax Court the necessary tools: the authority to reverse, remand with instructions, or modify.
FOOTNOTES:
n1. Leslie Book, The New Collection Due Process Taxpayer Rights, 86 Tax Notes 1127 (2000).
n2. Pub. L. No. 105-206, 112 Stat. 685 (codified as amended in scattered sections of 26 U.S.C.).
n3. Id. 3401(a), (b), 112 Stat. at 746-49.
n4. Id.
n5. Id.
n6. Goza v. Comm'r, 114 T.C. 176, 181-82 (2000); Moore v. Comm'r, 114 T.C. 171, 175-76 (2000).
n7. Goza, 114 T.C. at 181-82.
n8. Taxpayer Protection and IRS Accountability Act of 2002, H.R. 3991, 107th Cong., 303 (2002); Tax Relief Guarantee Act of 2002, H.R. 586, 107th Cong., 233 (2002).
n9. U.S. Const. art. III, 1 ("The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.").
n10. Id. art. I, 8, cls. 1-17.
n11. Id. cl. 18.
n12. Meyer v. Comm'r, 115 T.C. 417, 420 (2000) (citing in support I.R.C. section 7442 ; Judge v. Comm'r, 88 T.C. 1175, 1180-1181 (1987); Naftel v. Comm'r, 85 T.C. 527, 529 (1985)).
n13. I.R.C. 6211 - 6216 (2000).
n14. Id. 6330(d)(1).
n15. Id.; H.R. Conf. Rep. No. 105-599, at 266 (1998) ("The determination of the appeals officer may be appealed to the Tax Court, or, where appropriate, the Federal district court.").
n16. I.R.C. 6330 .
n17. See Meyer, 115 T.C. at 420.
n18. See, e.g., Lunsford v. Comm'r, 117 T.C. 159, 162-64 (2001).
n19. See, e.g., Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833, 851 (1986).
n20. See, e.g., Simanonok v. Comm'r, 731 F.2d 743, 743 (11th Cir.) (per curiam), reh'g denied, 736 F.2d 1528 (1984).
This issue has been presented to this court before and rejected. See Melton v. Kurtz, 575 F.2d 547 (5th Cir. 1978); Nash Miami Motors, Inc. v. Commissioner, 358 F.2d 636 (5th Cir. 1966). Although these cases were decided before the Supreme Court's decision in Northern Pipeline, Northern Pipeline does not affect the validity of their holdings. The jurisdiction of the tax court is not so far-ranging as to violate Article III. See Redhouse v. Commissioner, 728 F.2d 1249 at 1253 n.2 (9th Cir. 1984).
Id. at 744.
n21. Deborah A. Geier, The Tax Court, Article III, and the Proposal Advanced by the Federal Courts Study Committee: A Study in Applied Constitutional Theory, 76 Cornell L. Rev. 985, 1033 (1991) (questioning whether the Tax Court's jurisdiction over deficiency proceedings would survive constitutional scrutiny).
n22. Pub. L. No. 95-598, 92 Stat. 2549 (codified as amended at 11 U.S.C. 101 -151326 (1982)).
n23. 458 U.S. 50, 87 (1982).
n24. Id. at 84.
n25. 478 U.S. 833, 851 (1986).
n26. Marilyn E. Phelan, A Summary of the Extensive Collection Powers of the Internal Revenue Service, 9 Va. Tax Rev. 405, 406-07 (1990). Although Professor Phelan's article was written prior to enactment of the RRA of 1998, much of her discussion of the Internal Revenue Service's vast collection powers remains timely and is an extremely useful summary of the Internal Revenue Service's summons, enforcement, and collection powers.
n27. I.R.C. 7421(a) (2000) ("Except as provided in sections 6015(e), 6212(a) and (c), 6213(a), 6225(b), 6246(b), 6330(e)(1), 6331(i), 6672(c), 6694(c), and 7426(a) and (b)(1), 7429(b), and 7436 no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person... .").
n28. Bob Jones Univ. v. Simon, 416 U.S. 725, 737 (1974); Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 6-7 (1962).
n29. I.R.C. 6201 , 6203 , 6303 , 6322 .
n30. Id. 6203.
n31. Id. 6214.
n32. I.R.C. 6211 defines "deficiency." I.R.C. 6212 directs the Secretary to send the taxpayer a notice of deficiency.
n33. I.R.C. 6213(a) contains the provisions regarding the time for filing the petition; I.R.C. 6214 provides that the Tax Court then has jurisdiction to determine the deficiency.
n34. I.R.C. 6213(a) . However, the prohibition against assessment and collection is suspended in certain situations, such as when the Internal Revenue Service believes that collection of the tax is in jeopardy. In that situation, the Internal Revenue Service may assess and collect the tax pursuant to I.R.C. 6851 , 6852 , or 6861 .
n35. I.R.C. 6213(c) provides for assessment in the event the taxpayer fails to file a timely petition; I.R.C. 6215 (a) provides that the tax may be assessed after the Tax Court's determination of a deficiency becomes final as provided in I.R.C. 7481 . However, I.R.C. 7482 permits the taxpayer to appeal the Tax Court's decision to the United States Courts of Appeals (other than the United States Court of Appeals for the Federal Circuit) and such review shall be to the same extent as decisions of the district courts in civil actions tried without a jury. The United States Supreme Court may review the appellate court's decision upon certiorari.
n36. 28 U.S.C. 1346 (a)(1) provides that the district court shall have original jurisdiction, concurrent with the court of federal claims over refund actions. Neither court has jurisdiction over pre-assessment deficiency actions.
n37. I.R.C. 6201 .
n38. Id. 6159.
n39. Id. 7122.
n40. Pub. L. No. 105-206, 3467(a), 112 Stat. 685, 769 added I.R.C. 6159(c) to the Internal Revenue Code which requires the Internal Revenue Service to enter into agreements when the amount of liability (exclusive of interest, penalties, and other additions to tax) is less than $ 10,000, the taxpayer has not failed to file a return or pay the tax shown on such return (or entered into an installment agreement to pay the tax) for any of the five preceding years, and is unable to pay the liability in full.
n41. Pub. L. No. 105-206, 3462(c)(1), 112 Stat. 685, 766, added I.R.C. 7122(d)(2) to the Internal Revenue Code which requires the Internal Revenue Service to allow taxpayers to appeal rejections of offers in compromise and installments agreements to the Internal Revenue Service's Office of Appeals. If the taxpayer does not agree with the decision of the Office of Appeals, I.R.C. 6330 allows the taxpayer to demand judicial review of the Office of Appeals' decision with the Tax Court or the appropriate district court.
n42. See Phelan, supra note 26, at 432-52.
n43. I.R.C. 6303 .
n44. Id. 6321. Section 6238(a) of the Omnibus Taxpayer Bill of Rights (the 1988 Taxpayer Bill of Rights), Pub. L. No. 100-647, 102 Stat. 3731, 3743 added 6326 to the Internal Revenue Code which gives a taxpayer the right to file an administrative appeal with the Service after a notice of lien has been filed on the taxpayer's property if there was an error in the filing of the notice of the lien. If the Service determines that the filing of a notice of lien was erroneous, it must immediately issue a certificate of release of the lien.
n45. I.R.C. 6331(a) .
n46. I.R.C. 6334 exempts certain property, such as clothes, books, tools of trade, unemployment benefits, disability benefits.
n47. I.R.C. 6331(d) requires the Internal Revenue Service to give the taxpayer thirty days written notice of the levy. However, the Internal Revenue Service is not required to wait ten days after notice and demand or thirty days after notice of the intent to levy if the Service believes that collection of the tax is in jeopardy.
n48. I.R.C. 6335(a) .
n49. Id. 6335(b).
n50. Id. 6335. I.R.C. 6336 permits the Internal Revenue Service to sell perishable goods before the ten days lapse.
n51. Id. 6337.
n52. Id. 7403. If the Internal Revenue Service filed a civil action to enforce the lien, the taxpayer does not have a right of redemption to the property; however, the merits of all claims and liens upon the property are determined.
n53. Id. 7421(a).
n54. I.R.C. 651l provides that the taxpayer must file an administrative claim for refund three years from when the return was filed or two years from the time the tax was paid, whichever is later. If the taxpayer did not file a return, he must file a claim for a refund within two years from the time the tax was paid.
n55. I.R.C. 7422(a) provides that no civil suit for refund may be commenced unless a taxpayer has first filed an administrative claim for refund. I.R.C. 6532(a) provides that the suit cannot be commenced until six months after the taxpayer filed an administrative claim for a refund, unless the Internal Revenue Service rejects the claim earlier. After the Internal Revenue Service rejects the claim or six months elapse, the taxpayer must file suit within two years of that event.
n56. Murray v. Hoboken Land & Improvement Co., 59 U.S. (18 How.) 272 (1855).
n57. Id.
n58. Id. at 282.
n59. 92 U.S. 85 (1875).
n60. Id. at 89.
n61. 283 U.S. 589 (1931).
n62. Id. at 595-96 (footnotes and citations omitted).
n63. Id. at 599-600.
n64. Id.
n65. Id. at 596 n.6.
n66. Id. at 596-97.
n67. Id. (citation omitted).
n68. See Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105-206, 3401(d), 112 Stat. 685, 750 (providing that the right to a hearing under I.R.C. 6320 and 6330 is effective for collection actions initiated after January 18, 1999).
n69. I.R.C. 7421(a) (2000).
n70. Id. 6330(e).
n71. I.R.C. 6330(f) sets forth an exception for jeopardy and state refund levies. In those two situations, the taxpayer has a right to a hearing within a reasonable time after the levy.
n72. I.R.C. 6320(a)(1) , (2) addresses the notice requirements for lien; I.R.C. 6330(a)(1) , (2) addresses levies.
n73. I.R.C. 6320(a)(2) .
n74. Id. 6330(a)(2).
n75. Id. 6320(a)(3).
n76. Id.
n77. I.R.C. 6330(a)(3) .
n78. I.R.C. 6320(b) sets forth the requirements for liens; I.R.C. 6330(b) addresses levies.
n79. I.R.C. 6320(c) , 6330(c) .
n80. I.R.C. 6320(c) provides that for purposes of post-lien hearings, the provisions of I.R.C. 6330 regarding the conduct of the administrative hearing, judicial review, and suspension of the collections and the statute of limitations apply. However, I.R.C. 6330(d)(2)(B) also permits an appeals officer in a subsequent levy hearing to consider a change in the taxpayer's circumstances. There is no comparable change in circumstance provision for liens.
n81. I.R.C. 6330(c)(1) .
n82. H.R. Conf. Rep. No. 105-599, at 264 (1998).
n83. Treas. Reg. 301.6330-1(e)(1) (2002) ("Prior to issuance of a determination, the hearing officer is required to obtain verification from the IRS office collecting the tax that the requirements of any applicable law or administrative procedure have been met.").
n84. Book, supra note 1, at 1137 (2000).
n85. I.R.C. 6330(c)(2)(A) .
n86. Id. 6330(c)(2)(B).
n87. See supra notes 29-41; see also supra text accompanying notes 29-41.
n88. Treas. Reg. 301.6330-1(e)(3) Q&A E2 ("Receipt of a statutory notice of deficiency for this purpose means receipt in time to petition the Tax Court for a redetermination of the deficiency asserted in the notice of deficiency."). See also Book supra note 1, at 1146.
n89. See Book, supra note 1, at 1130-33.
n90. I.R.C. 6330(c)(2)(B) .
n91. Treas. Reg. 301.6330-1(e)(3) Q&A E2 ("An opportunity to dispute a liability includes a prior opportunity for a conference with Appeals that was offered either before or after the assessment of the liability."). See also Book, supra note 1, at 1147.
n92. See Book, supra note 1, at 1147.
n93. I.R.C. 6330(c)(3) . The statute does not state that the determination must be in writing; however, the legislative history anticipated that the determination would be reduced to writing. H.R. Conf. Rep. No. 105-599, at 266 (1998) ("The conferees expect the appeals officer will prepare a written determination addressing the issues presented by the taxpayer and considered at the hearing."). Treas. Reg. 301.6330-1(e)(3) Q&A E8 provides that the determination will be in writing. ("Taxpayers will be sent a dated Notice of Determination by certified or registered mail.").
n94. See Phillips v. Comm'r, 283 U.S. 589 (1931); Cheatham v. Comm'r, 92 U.S. 85 (1875); Murray v. Hoboken Land & Improvement Co., 59 U.S. (18 How.) 272 (1855).
n95. For example, a taxpayer may wish to retain highly appreciated, marketable stock given to him by his grandmother, which served as collateral enabling him to build a successful business. If the taxpayer wants to retain the stock because of the role it played in his success, and offers to make installment payments instead or asks for more time for payment in order to liquidate other, less sentimental assets, is the appeals officer obligated to honor the taxpayer's request?
n96. I.R.C. 6330(d)(1) . It is beyond the scope of this Article to discuss in depth the confusion regarding the Tax Court's and the district court's respective jurisdictions over I.R.C. 6330 appeals. I.R.C. 6330(d)(1) is ambiguous and capable of two different interpretations. One interpretation, which a majority of the Tax Court have adopted, is that each court has exclusive jurisdiction over certain appeals. The Tax Court has exclusive jurisdiction over the appeal if the Tax Court would have jurisdiction over the underlying tax liability or penalty in a deficiency proceeding. The district court has exclusive jurisdiction over all other taxes and penalties. See Moore v. Comm'r, 114 T.C. 171, 175 (2000); Van Es v. Comm'r, 115 T.C. 324, 328 (2000). In contrast, a minority of the Tax Court judges have argued that the Tax Court has jurisdiction over all collection appeals, with the district court exercising concurrent jurisdiction over the appeal if the underlying tax is one over which the Tax Court would not have jurisdiction under its deficiency proceedings. See Johnson v. Comm'r, 117 T.C. 204, 218-19 (2001) (Beghe, J., dissenting).
n97. I.R.C. 6330(e)(1) , (2).
n98. Id. 6330(e)(1).
n99. H.R. Conf. Rep. No. 105-599, at 266 (1998).
n100. Roberts v. Comm'r, 118 T.C. 365, 369 (2002) (providing for abuse of discretion review if the underlying liability is not in dispute); Davis v. Comm'r, 115 T.C. 35, 39 (2000) (providing for de novo review if the underlying deficiency is in dispute).
n101. Nestor v. Comm'r 118 T.C. 162 (2002); Lunsford v. Comm'r, 117 T.C. 159 (2001); Meyer v. Comm'r, 115 T.C. 417 (2000), overruled by Lunsford, 117 T.C. 159.
n102. 115 T.C. at 423.
N103. Id. at 418.
n104. Id.
n105. Id.
n106. Id.
n107. Id. at 418-19.
n108. Id. at 419.
n109. Id.
n110. If respondent prevailed because the appeal was timely, but filed in the wrong court, petitioners would have thirty days to correct their error and refile in the district court. The collection proceedings would remain suspended.
n111. Meyer, 115 T.C. at 420 (citing in support I.R.C. 7442 ; Judge v. Comm'r, 88 T.C. 1175, 1180 (1987); Naftel v. Comm'r, 85 T.C. 527, 529 (1985)).
n112. Meyer, 115 T.C at 421.
n113. Id.
n114. I.R.C. 6212 , 6213 (2000).
n115. Meyer, 115 T.C. at 421.
n116. Id. at 422-23.
n117. Id.
n118. Lunsford v. Comm'r, 117 T.C. 159, 159 (2001).
n119. Id. at 165.
n120. Id. at 161.
n121. Judge Ruwe wrote the majority opinion in which he was joined by Judges Wells, Cohen, Swift, Gerber, Colvin, Gale and Thorton. Id. at 160-65. Judge Halpern wrote a concurring opinion in which he was joined by Judges Beghe and Whalen, and Thorton who also had voted with the majority. Id. at 165-76 (Halpern, J., concurring). Judge Beghe wrote a concurring opinion in which Judge Halpern joined. Id. at 176 (Beghe, J., concurring). Judge Foley dissented in an opinion in which Judges Chiechi, Laro, Marvel, and Vasquez joined. Id. at 176-81 (Foley, J., dissenting). Judge Vasquez wrote a dissenting opinion in which Judge Foley joined. Id. at 181-82 (Vasquez, J., dissenting).
n122. Id. at 161. Treas. Reg. 301.6203-1 authorizes the district director to assess a tax and must furnish a taxpayer a copy of the assessment upon demand.
The district director and the director of the regional service center shall appoint one or more assessment officers. The district director shall also appoint assessment officers in a Service Center servicing his district. The assessment shall be made by an assessment officer signing the summary record of assessment. The summary record, through supporting records, shall provide identification of the taxpayer, the character of the liability assessed, the taxable period, if applicable, and the amount of the assessment. The amount of the assessment shall, in the case of tax shown on a return by the taxpayer, be the amount so shown, and in all other cases the amount of the assessment shall be the amount shown on the supporting list or record. The date of the assessment is the date the summary record is signed by an assessment officer. If the taxpayer requests a copy of the record of assessment, he shall be furnished a copy of the pertinent parts of the assessment which set forth the name of the taxpayer, the date of assessment, the character of the liability assessed, the taxable period, if applicable, and the amounts assessed.
Treas. Reg. 301.6203-1 (1982).
n123. Lunsford, 117 T.C. at 161.
n124. Id. at 161-62.
n125. Id. at 162.
n126. Id. at 163.
n127. Id. at 163-64.
n128. Id.
n129. Id. at 164.
n130. Id.
n131. Id. at 166.
n132. Administrative Procedure Act, 5 U.S.C. 551 -559, 701-706 (2000).
n133. Lunsford, 117 T.C. at 167.
n134. Id. at 168.
n135. H.R. Conf. Rep. No. 105-599, at 266 (1998).
n136. Lunsford, 117 T.C. at 167, n.3.
n137. Id. at 168.
n138. Administrative Procedure Act, 5 U.S.C. 706. See generally William F. Fox, Jr., Understanding Administrative Law (4th ed. 2000) for an overview of the Administrative Procedure Act.
n139. Lunsford, 117 T.C. at 168.
n140. Id.
n141. Nestor v. Comm'r, 118 T.C. 162, 162 (2002).
n142. Id. at 164.
n143. Id.
n144. Id.
n145. Id.
n146. Id. at 165.
n147. Id.
n148. Id. at 167.
n149. Id. at 166.
n150. Id. at 166-67.
n151. Id. at 166.
n152. Id.
n153. Nine judges joined in the majority opinion which was written by Judge Colvin. Judges Wells, Cohen, Gerber, Ruwe, Whalen, Halpern, and Thornton agreed with the majority. Id. at 165-68. Judge Marvel agreed in the result only. Id. at 168 (Marvel, J., concurring). Judges Swift and Beghe wrote concurring opinions. Id. at 168-71, 175-77 (Swift, J., concurring, Beghe, J., concurring). Judge Halpern wrote a concurring opinion in which he was joined by Judges Whalen and Thorton, all three of whom had joined in the majority opinion. Id. at 171-75 (Halpern, J., concurring). Judge Laro wrote a concurrence in which he was joined by Judges Vasquez and Gale, none of whom joined in the majority opinion. Id. at 177-79 (Laro, J., concurring). Judge Foley dissented and was joined by Judge Chiechi. Id. at 179-80 (Foley, J., dissenting).
n154. See id. at 167.
n155. Id.
n156. Id.
n157. Id. at 169.
n158. See id. at 169-70.
n159. See id. at 170-71.
n160. Id. at 180.
n161. Id.
n162. Id.
n163. Id.
n164. See id. at 171.
n165. 5 U.S.C. 551 -59, 701-06 (2000).
n166. Nestor, 118 T.C. at 173.
n167. Id. at 172-73 (quoting, with emphasis added, 5 U.S.C. 706 (2000)).
n168. Id. at 173 (citing Save Our Heritage, Inc. v. F.A.A., 269 F.3d 49, 61 (1st Cir. 2001)).
n169. Id. at 172.
n170. Califano v. Sanders, 430 U.S. 99, 106 n.6 (1977) (where the Supreme Court reviewed section 702 of the Administrative Procedure Act which provides in pertinent part: "A person suffering legal wrong because of agency action ... is entitled to judicial review thereof." 5 U.S.C. 702 (2000). Although that language might lead one to conclude that 702 independently provides for judicial review of agency action, the Supreme Court held it does not: "We thus conclude that the APA does not afford an implied grant of subject-matter jurisdiction permitting federal judicial review of agency action." Califano, 430 U.S. at 107.).
n171. I.R.C. 6330(d) (2000).
n172. 38 U.S.C. 7252 (a) (2000).
n173. 5 U.S.C. 706 (2000).
n174. 38 U.S.C. 7261 (a)(3) (2000).
n175. 38 U.S.C. 7252 (a) (2000). Examples of other statutes empowering a reviewing court to take appropriate action are (1) I.R.C. 7482(c) which authorizes the court of appeals upon review of a decision of the Tax Court "to affirm or, if the decision of the Tax Court is not in accordance with law, to modify or to reverse the decision ... with or without remanding the case for a rehearing, as justice may require."; (2) 28 U.S.C. 1491 (a)(2) which provides that for the Court of Federal Claims, an Article I court, "in any case within its jurisdiction, ... shall have the power to remand appropriate matters to any administrative or executive body or official with such direction as it may deem proper and just."
n176. Meyer v. Comm'r, 115 T.C. 417, 420 (2000).
n177. Leandra Lederman, Equity and the Article I Court: Is the Tax Court's Exercise of Equitable Powers Constitutional?, 5 Fla. Tax Rev. 357, 377-78 (2001) (arguing that the Tax Court may only exercise limited equitable powers in the absence of statutory authorization).
n178. See Book, supra note 1, at 1149.
n179. See Nestor v. Comm'r, 118 T.C. 162, 172-73 (2002).
n180. 5 U.S.C. 706 (2000).
n181. Id.
n182. I.R.C. 6330(d)(1) (2000).
n183. Id.
n184. The answer cannot be supplied simply by pointing to the power of the Veterans' Court to affirm, modify, or reverse appeals from the Board of Veterans' Appeals, and reasoning that, by analogy, the Tax Court also must be able to reverse, remand, or modify appeals from the Internal Revenue Service. The analogy is not necessarily apt. First, since the inception of the Republic, the courts have eschewed any role with regard to the adjudication of veterans' benefits deeming it to be an area under congressional control. See, e.g., H.R. Rep. No. 100-963, at 9 (1988), reprinted in 1988 U.S.C.C.A.N. 5782, 5790. ("From the beginning of the Republic, the courts and Congress have clashed over the proper way to adjudicate claims for veterans benefits, with the courts more often than not disclaiming any proper role in the adjudication of veterans' benefit claims."). Second, the Veterans' Court reviews denials and grants of benefits from the government to the citizen. The Tax Court reviews duties a citizen owes to the government. See Geier, supra note 21, at 1007.
n185. U.S. Const. art. III, 1.
n186. Id.
n187. U.S. Const. art. III, 2, cl. 1.
n188. See generally Erwin Chemerinsky, Federal Jurisdiction, 1.1 - 1.4.6 (3d ed. 1999) (explaining Article III's provisions and the early history of the federal courts).
n189. See Richard H. Fallon, Jr., Of Legislative Courts, Administrative Agencies, and Article III, 101 Harv. L. Rev. 916, 919-21 (1988). Professor Fallon posits that there are three problems with literalism: (1) The early history indicates that Congress did not construe Article III literally. The first Congress vested power in the executive to hear disputes regarding customs and veterans benefits. (2) Literalism raises policy concerns in our modern administrative state. At the time the Constitution was adopted, the federal government was very limited in its functions. However, our modern government has created entitlements and assumed responsibility for enforcing a broader range of legal rights. Literalism would frustrate these interests that Congress has sought to advance through the use of non-article III tribunals. (3) A literal reading of Article III is incompatible with, and would lead to the rejection of, an enormous amount of case law and current practice (although stare decisis is entitled to less deference with regard to constitutional issues).
n190. See, e.g., Act of Sept. 29, 1789, ch. 24, 1 Stat. 95 for military benefits; Act of Sept. 1, 1789, ch. 11, 1 Stat. 55 for customs duties.
n191. Am. Ins. Co. v. Canter, 26 U.S. (1 Pet.) 511, 546 (1828). See Lederman, supra note 177, at 363. Professor Lederman notes that it is arguable that the United States Supreme Court recognized the legitimacy of legislative courts even earlier in Marbury v. Madison, 5 U.S. (1 Cranch) 137, 162 (1803), where the Court recognized the right of William Marbury to his five-year term as a Justice of Peace for the District of Columbia, thereby allowing the exercise of judicial power without life tenure.
n192. See Fallon, supra note 189, at 921-26. Professor Fallon explains that non-Article III tribunals follow two models: the legislative court model, or the adjunct or administrative agency model, each justified by a different line of cases. The legislative court model was first recognized in American Ins. Co. v. Canter, 26 U.S. (1 Pet.) 511, 546 (1828), in which Chief Justice Marshall held that Congress could create non-Article III territorial courts. Subsequently, the model was expanded to include courts-martial, see Toth v. Quarles, 350 U.S. 11, 17 (1955). The model was also expanded to include courts to resolve issues involving public rights. See N. Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 67-70 (1982). (The concept of public rights was first articulated in Murray v. Hoboken Land & Improvement Co., 59 U.S. (18 How.) 272, 284 (1855); however, that case did not address the issue of whether a non-Article III tribunal could decide those issues). Although Congress usually provides for judicial review of legislative courts' decisions, in fact, the legislative court model does not require judicial review because it is not hearing matters that are within the province of an Article III court. For example, customs. The adjunct or administrative agency model can be traced back to Crowell v. Benson, 285 U.S. 22, 51 (1932), where administrative agency resolution of private disputes was permitted because the essential attributes of judicial power remained vested in the Article III court and the agency's findings of fact and law were subject to judicial review. The administrative agency does not function as an independent tribunal but as an adjunct to the Article III court.
n193. U.S. Const. art. I, 8, cls. 1-18. Although non-article III tribunals usually are created pursuant to Congress's enumerated powers under Article I, this is not always the case. For example, territorial courts are created pursuant to Congress's power under Article IV, section 3 of the Constitution, which provides that "Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States." U.S. Const. art. IV, 3, cl. 2.
n194. See Lederman, supra note 177, at 369 n.61 (citing in support In re Hessinger & Assocs., 192 B.R. 211, 215 (Bankr. N.D. Ca. 1996) ("Because the bankruptcy courts are creatures of Article I, they have no "inherent' powers and their jurisdiction is limited to that expressly granted by Congress.")).
n195. Pub. L. No. 91-172, 951, 83 Stat. 487, 730-36 (codified at I.R.C. 7441 (2000)).
n196. Revenue Act of 1924, Pub. L. No. 68-176, ch. 234, 900, 43 Stat. 253, 336.
n197. Revenue Act of 1926, Pub. L. No. 69-20, ch. 27, 1001(a), 1002, 44 Stat. 9, 109-10.
n198. Revenue Act of 1942, Pub. L. No. 77-753, ch. 619, 504(a), 56 Stat. 798, 957.
n199. I.R.C. 1100 (1942).
n200. See A Proposal to Give the Tax Court Article III Status: Hearings on S. 204 Before the Senate Subcomm. on Improvements in Judicial Machinery of the Senate Comm. on the Judiciary, 90th Cong. 13-19 (1968) (describing the history of the Tax Court, and containing a chronology of the legislation introduced since 1924 to change the status of the Tax Court to an Article III court).
n201. Id. at 11. Representative Wilbur Mills (D. Ark.) introduced H.R. 10,100, 90th Cong. (1967) and Senator Russell Long (D. La.) introduced S. 2041, 90th Cong. (1967).
n202. H.R. 13,494, 91st Cong. (1969). See also Geier, supra note 21, at 990-94 (providing a more detailed explanation of the Tax Court's evolution to an Article I court and the obstacles to congressional consideration of Article III status).
n203. S. Rep. No. 91-552, at 302 (1969), reprinted in 1969 U.S.C.C.A.N. 2341.
n204. 1969 U.S.C.C.A.N. 2343; The Tax Reform Act of 1969, Pub. L. No. 91-172, 952(b), 83 Stat. 487, 730.
n205. See Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833 (1986); Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568 (1985); N. Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982).
n206. N. Pipeline, 458 U.S. at 87; see also The Bankruptcy Act of 1978, 28 U.S.C. 1471 (1982).
n207. N. Pipeline, 458 U.S. at 53.
n208. See id. at 53.
n209. Id. at 54; 28 U.S.C. 1471 (b) (1976 ed., Supp. IV).
n210. N. Pipeline, 458 U.S. at 54.
n211. Id. at 54.
n212. Id. at 64-65 with regard to territorial courts; id. at 66 with regard to courts-martial; and id. at 67-70 with regard to "public rights."
n213. Murray v. Hoboken Land & Improvement Co., 59 U.S. (18 How.) 272, 284 (1855).
n214. N. Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 67-68 (1982) (citing Crowell v. Benson, 285 U.S. 22, 50 (1932) and Ex parte Bakelite Corp., 279 U.S. 438, 458 (1929)).
n215. N. Pipeline, 458 U.S. at 83. But see Geier, supra note 21, at 1007 (arguing that the concept of "public rights" should be confined to a government-created benefit, the administration of government-regulated activity among private persons, or sovereign immunity, and not to a government-created duty such as the obligation to pay a tax).
n216. Id. at 77-79 (citing Crowell, 285 U.S. at 51).
n217. Id. at 84-87.
n218. See Fallon, supra note 189, at 929 n.88.
n219. 473 U.S. 568, 589-90 (1985).
n220. Id. at 587.
n221. Id. at 585-86 (internal citations omitted).
n222. Id. at 589-91.
n223. 478 U.S. 833, 839-40 (1986).
n224. Id. at 855-57.
n225. Id. at 848.
n226. Id.
n227. Id.
n228. Id. at 848-49.
n229. Id. at 849.
n230. The Tax Court has interpreted I.R.C. 6330(d) (2000) as providing that the taxpayer should file his petition with the Tax Court if the underlying tax is one over which the Tax Court would ordinarily have jurisdiction (e.g., income, estate and gift tax, and certain excise taxes); otherwise, the taxpayer should file with the district court. See, e.g., Johnson v. Comm'r, 117 T.C. 204, 208-10 (2001); Moore v. Comm'r, 114 T.C. 171, 175 (2000).
n231. I.R.C. 6320 (2000) is located in Part I - Due Process For Liens, in Subchapter C of Chapter 64, Subtitle F - Procedure and Administration of the Internal Revenue Code; I.R.C. 6330 (2000) is located in Part I - Due Process For Collections, in Subchapter D of Chapter 64, Subtitle F.
n232. Phillips v. Comm'r, 283 U.S. 589, 595 (1931); Cheatham v. United States, 92 U.S. 85, 88-89 (1875).
n233. See Phillips, 283 U.S. at 595; Cheatham, 92 U.