Judges: GUSTAFSON
Attorneys: Carlton M. Smith , for petitioner. * Briefs amicus curiae were filed by A. Lavar Taylor as counsel for the Center for the Fair Administration of Taxes. Matthew D. Lucey , for respondent.
Filed: Jul. 26, 2010
Latest Update: Nov. 21, 2020
Summary: LARRY E. TUCKER, PETITIONER v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT Docket No. 3165–06L. Filed July 26, 2010. P filed income tax returns for 2000, 2001, and 2002 that reported tax due; but he did not pay the tax. The Internal Revenue Service (IRS) assessed the tax and issued to P a notice of the filing of a tax lien (NFTL). P timely requested a collection due process (CDP) hearing, which is to be ‘‘con- ducted by an officer or employee’’ of the IRS Office of Appeals, I.R.C. sec. 6320(b)(
Summary: LARRY E. TUCKER, PETITIONER v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT Docket No. 3165–06L. Filed July 26, 2010. P filed income tax returns for 2000, 2001, and 2002 that reported tax due; but he did not pay the tax. The Internal Revenue Service (IRS) assessed the tax and issued to P a notice of the filing of a tax lien (NFTL). P timely requested a collection due process (CDP) hearing, which is to be ‘‘con- ducted by an officer or employee’’ of the IRS Office of Appeals, I.R.C. sec. 6320(b)(3..
More
LARRY E. TUCKER, PETITIONER v. COMMISSIONER OF
INTERNAL REVENUE, RESPONDENT
Docket No. 3165–06L. Filed July 26, 2010.
P filed income tax returns for 2000, 2001, and 2002 that
reported tax due; but he did not pay the tax. The Internal
Revenue Service (IRS) assessed the tax and issued to P a
notice of the filing of a tax lien (NFTL). P timely requested
a collection due process (CDP) hearing, which is to be ‘‘con-
ducted by an officer or employee’’ of the IRS Office of Appeals,
I.R.C. sec. 6320(b)(3), and which is to conclude with a ‘‘deter-
mination by an appeals officer’’, I.R.C. sec. 6330(c)(3). P’s CDP
hearing was conducted by a settlement officer in the IRS
Office of Appeals, and after the CDP hearing a team manager
in that office issued to P a notice of determination upholding
the NFTL. P filed with the Tax Court a timely appeal pursu-
ant to I.R.C. sec. 6330(d)(1). After initial proceedings, this
Court ordered a remand to the Office of Appeals for further
consideration. A second CDP hearing was conducted by
another settlement officer, and the team manager issued a
supplemental notice of determination again upholding the
NFTL. The team manager and both settlement officers had
been hired by the Commissioner pursuant to I.R.C. sec.
7804(a) and were not appointed by the President or the Sec-
retary of the Treasury. P moved for a second remand so that
a CDP hearing could be conducted by, and a notice of deter-
mination issued by, an officer appointed by the President or
the Secretary of the Treasury, in compliance with the
Appointments Clause. See U.S. Const., art. II, sec. 2, cl. 2.
Held: An ‘‘officer or employee’’ or an ‘‘appeals officer’’ under
I.R.C. sec. 6320 or 6330 is not an ‘‘inferior Officer of the
United States’’ for purposes of the Appointments Clause. P’s
motion to remand will be denied.
Carlton M. Smith, for petitioner.*
Matthew D. Lucey, for respondent.
*The following students assisted Professor Smith: Tanyika Brime, Anya Ferris, Lisa Gordon,
Marisa Harris, Samir Ismayilov, Shay Moyal, Cheryl Scher, Elisa Vega, Scott Weese, and Jer-
emy Zenilman.
Briefs amicus curiae were filed by A. Lavar Taylor as counsel for the Center for the Fair Ad-
ministration of Taxes. The following students assisted Professor Taylor: Joe Bosik, Habbib
Hanna, and Kelly Regan.
114
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00001 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 115
CONTENTS
Background ............................................................................................. 117
Discussion ................................................................................................ 119
I. The Appointments Clause ............................................................ 120
A. The purposes of the Appointments Clause ............................. 120
B. The distinctions in the Appointments Clause: ‘‘Officers’’,
‘‘inferior Officers’’, and non-officer employees .................... 122
1. ‘‘Principal’’ officers vs. ‘‘inferior’’ officers ............................. 122
2. ‘‘Officers’’ vs. non-officer employees ..................................... 123
C. Modes of appointment under the Appointments Clause ....... 125
D. Appointment of revenue personnel in the late 18th century 126
1. The Department of the Treasury ......................................... 127
2. External revenue collection .................................................. 127
3. Internal revenue collection ................................................... 129
E. Subsequent appointment of internal revenue personnel ...... 133
II. The Internal Revenue Service Office of Appeals ....................... 134
A. The legal basis for the Office of Appeals ................................ 134
B. A brief history of the Office of Appeals .................................. 135
C. ‘‘Appeals Officers’’ in the Office of Appeals ............................ 136
1. The Pre-CDP Role of the ‘‘Appeals Officer’’ ........................ 136
2. ‘‘Collection Due Process’’ procedures added to the Code
in 1998 ............................................................................... 137
3. Post-CDP hearing procedures .............................................. 140
4. The tax administration context of the CDP ‘‘officer or
employee’’ ........................................................................... 149
5. The administrative law context of the CDP ‘‘officer or
employee’’ ........................................................................... 151
III. The status of the CDP ‘‘officer or employee’’ and ‘‘appeals
officer’’ under the Appointments Clause .............................. 152
A. Whether the position is ‘‘established by Law’’ ....................... 152
1. Creation by statute ............................................................... 152
2. Creation by regulation .......................................................... 156
B. Whether the CDP function could constitute an ‘‘office’’ ........ 159
1. Whether the CDP provisions created a ‘‘continuing’’
position ............................................................................... 160
2. Whether the CDP hearing officer has ‘‘significant
authority’’ ........................................................................... 160
Conclusion ............................................................................................... 165
OPINION
GUSTAFSON, Judge: This case is an appeal, pursuant to sec-
tion 6330(d)(1), 1 by which petitioner Larry E. Tucker seeks
this Court’s review of a determination by the Office of
1 Unless otherwise indicated, all section references are to the Internal Revenue Code (‘‘Code’’,
26 U.S.C.).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00002 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
116 135 UNITED STATES TAX COURT REPORTS (114)
Appeals of the Internal Revenue Service (IRS) to sustain the
filing of a notice of lien in order to collect Mr. Tucker’s
unpaid income taxes for the years 2000, 2001, and 2002.
That determination was made after the Office of Appeals
conducted a collection due process (CDP) hearing pursuant to
section 6330(c) and a supplemental CDP hearing pursuant to
a remand of this Court. The determination was reflected in
an initial ‘‘Notice of Determination Concerning Collection
Action(s) Under Section 6320 and/or 6330’’ and in a ‘‘Supple-
mental Notice of Determination Concerning Collection
Action(s) Under Section 6320 and/or 6330’’. We will eventu-
ally review the merits of that collection determination. 2
Currently before us, however, is Mr. Tucker’s motion for
remand. That motion presents a question not about Mr.
Tucker’s tax liabilities nor about the collection decisions of
the Office of Appeals in this case but about the constitutional
validity of that Office’s staffing of CDP proceedings that it
conducts pursuant to section 6330(c). The settlement officers
who conducted Mr. Tucker’s CDP hearings and the team man-
ager who signed and issued the notices of determination
were all hired by the Commissioner of Internal Revenue
pursuant to section 7804(a) and were not appointed by the
President or the Secretary of the Treasury. Mr. Tucker con-
tends, however, that the ‘‘appeals officer’’ in section 6330(c)
is an ‘‘Officer of the United States’’ who, according to the
Appointments Clause of Article II, Section 2, of the U.S. Con-
stitution, must be appointed either by the President or by
one of ‘‘the Heads of Departments’’ (in this case, the Sec-
retary of the Treasury). Because the settlement officers who
handled Mr. Tucker’s CDP proceeding were not so appointed,
Mr. Tucker contends that he has not yet been given the CDP
hearing that Congress mandated, and he asks us to remand
the matter for a valid hearing before a duly appointed officer.
We will deny Mr. Tucker’s motion to remand. We hold that
the ‘‘officer or employee’’ in section 6320(b)(3) or 6330(b)(3),
also referred to as an ‘‘appeals officer’’ in section 6330(c)(1)
and (3), is not an ‘‘Officer of the United States’’ subject to the
2 In addition to the motion to remand that we address in this Opinion, there are also pending
before us both respondent’s motion for summary judgment asking the Court to sustain the sup-
plemental notice of determination and Mr. Tucker’s cross-motion for summary judgment asking
that we hold that the supplemental notice reflected an abuse of discretion by the Office of Ap-
peals. Those cross-motions address the merits of the CDP determination, and we do not decide
them in this Opinion.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00003 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 117
Appointments Clause, for two reasons: First, there is no
office ‘‘established by Law’’ to which the clause applies; and
second, the CDP hearing officer does not exercise the ‘‘signifi-
cant authority’’ that defines an ‘‘office’’ according to the rel-
evant case law.
Background
The facts pertinent to Mr. Tucker’s motion to remand can
be stated very succinctly: He properly requested a CDP
hearing pursuant to section 6320, and the employees of the
Office of Appeals who conducted his CDP hearings and issued
his notices of determination were not appointed by the Presi-
dent or the Secretary of the Treasury.
Those facts can be elaborated in somewhat more detail
without any dispute, on the basis of the pleadings, the par-
ties’ motion papers, and the supporting exhibits attached
thereto.
Tax years 2000, 2001, and 2002
Mr. Tucker failed to timely file tax returns for 2000, 2001,
and 2002. In June 2003 he filed untimely Forms 1040, ‘‘U.S.
Individual Income Tax Return’’, for those years, but he failed
to pay any of the income tax liability shown on those returns.
The IRS assessed the income tax liabilities that Mr. Tucker
had self-reported but not paid. Almost a year later, on May
8, 2004, the IRS sent to Mr. Tucker a ‘‘Final Notice—Notice
of Intent to Levy and Notice of Your Right to a Hearing’’,
pursuant to sections 6330(a)(1) and 6331(d)(1), advising him
of the IRS’s intent to levy upon his property. Mr. Tucker did
not timely request a hearing under section 6330 with respect
to that notice. On July 22, 2004, the IRS sent to Mr. Tucker
a ‘‘Notice of Federal Tax Lien Filing and Your Right to a
Hearing’’, pursuant to section 6320(a)(1), advising him that
the IRS had filed a notice of tax lien against him. Both
notices reflected the income tax liabilities for 2000, 2001, and
2002.
CDP hearing
In response to the lien notice (but not the earlier notice of
levy), Mr. Tucker submitted to the IRS on August 11, 2004,
a Form 12153, ‘‘Request for a Collection Due Process
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00004 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
118 135 UNITED STATES TAX COURT REPORTS (114)
Hearing’’. The CDP hearing was held as a telephone con-
ference on May 31, 2005, between an IRS settlement officer
and Mr. Tucker and his counsel; and subsequently, numerous
letters were exchanged between the settlement officer and
Mr. Tucker’s counsel.
Mr. Tucker’s OIC
On July 25, 2005, Mr. Tucker’s counsel sent to the settle-
ment officer a Form 656, ‘‘Offer in Compromise’’ (OIC), that
proposed to settle Mr. Tucker’s income tax liabilities for
1999, 2000, 2001, 2002, and 2003 for $36,772 payable in
monthly payments of $317 over 116 months. In a letter dated
November 18, 2005, the settlement officer rejected the OIC.
The notice of determination, and the commencement of this
case
On January 9, 2006, a team manager in the Office of
Appeals issued to Mr. Tucker a ‘‘Notice of Determination
Concerning Collection Action(s) under Section 6320 and/or
6330’’, which determined to uphold the filing of a tax lien as
to Mr. Tucker’s income tax liabilities for 2000, 2001, and
2002. In response, Mr. Tucker timely filed a petition with
this Court.
Previous Tax Court proceedings, remand to the Office of
Appeals, and supplemental notice of determination
After filing his petition, Mr. Tucker filed a motion for sum-
mary judgment on June 9, 2006. Respondent opposed that
motion and filed a motion for remand on July 17, 2006. By
our order of July 27, 2006, we denied Mr. Tucker’s motion for
summary judgment and granted respondent’s motion to
remand the case to the IRS’s Office of Appeals for further
consideration of Mr. Tucker’s July 2005 OIC and for issuance
of a supplemental notice of determination no later than
October 16, 2006.
The Office of Appeals then assigned a settlement officer
(i.e., a different settlement officer from the one who had con-
ducted Mr. Tucker’s initial CDP hearing) to conduct a supple-
mental CDP hearing and to reconsider Mr. Tucker’s July 2005
OIC. The supplemental CDP hearing was held as a telephone
conference on September 11, 2006, between the settlement
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00005 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 119
officer and Mr. Tucker’s counsel. On September 12, 2006, the
same team manager who had issued the first notice of deter-
mination issued a ‘‘Supplemental Notice of Determination
Concerning Collection Action(s) Under Section 6320 and/or
6330’’, which determined to reject Mr. Tucker’s July 2005 OIC
and to uphold the filing of a tax lien as to Mr. Tucker’s
income tax liabilities for 2000, 2001, and 2002.
The hiring of the settlement officers and team manager
Respondent concedes that, to date, no appeals officer,
settlement officer, or team manager in the Office of Appeals
has been appointed by the President, with or without the
advice and consent of the Senate, or by the Secretary of the
Treasury. Instead, the Office of Appeals personnel who were
involved in Mr. Tucker’s case were all hired by the Commis-
sioner pursuant to section 7804(a).
Mr. Tucker’s motion to remand
In response to the supplemental notice of determination,
on November 21, 2006, Mr. Tucker filed an amendment to
petition with this Court in order to appeal the supplemental
notice of determination. On November 29, 2007, respondent
filed a motion for summary judgment asking the Court to
sustain the supplemental notice of determination. Mr. Tucker
filed a cross-motion for summary judgment on February 27,
2008, and filed a motion for remand on September 2, 2008.
We reserve the issues raised by the parties’ cross-motions for
summary judgment, and we now address Mr. Tucker’s
motion for remand.
Discussion
To consider the applicability of the Appointments Clause to
the ‘‘officer or employee’’ under sections 6320(b)(3) and
6330(b)(3), we first analyze the origin and purposes of the
Appointments Clause, then describe generally the Office of
Appeals and its CDP function, and then apply Appointments
Clause analysis to the role of the CDP ‘‘officer or employee’’.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00006 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
120 135 UNITED STATES TAX COURT REPORTS (114)
I. The Appointments Clause
A. The purposes of the Appointments Clause
The framers of the United States Constitution divided the
power of the Federal Government among three branches—
legislative, executive, and judicial—as a safeguard against
tyranny. The former British colonies had experienced (in the
words of the Declaration of Independence) ‘‘a long train of
abuses and usurpations’’ by the British monarch, including
the abuse that ‘‘He has erected a multitude of New Offices,
and sent hither swarms of Officers to harass our people and
eat out their substance.’’ The framers guarded against this
particular instance of tyranny—i.e., the power both to erect
offices and to send out the officers—in the so-called Appoint-
ments Clause in Article II, Section 2, of the Constitution,
which provides for the appointment of ‘‘Officers of the United
States’’:
[The President] shall nominate, and by and with the Advice and Consent
of the Senate, shall appoint Ambassadors, other public Ministers and Con-
suls, 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 Presi-
dent alone, in the Courts of Law, or in the Heads of Departments.
The Constitution itself provided explicitly for the appoint-
ment of very few Federal officials, and it left to future polit-
ical process the creation of the great majority of ‘‘Officers of
the United States’’ in the executive and the judiciary. It pro-
vided that their offices would be ‘‘established’’ by the Con-
gress but ‘‘appoint[ed]’’ by persons outside the Congress.
The Appointments Clause has four related but distinct
purposes. First, as we have already noted, the clause is a
safeguard against Congress’s taking to itself the power to
create and fill governmental offices—a reflection of the sepa-
ration-of-powers framework of the U.S. Constitution. See
Freytag v. Commissioner, 501 U.S. 868, 878 (1991); The Fed-
eralist No. 47 (James Madison), No. 77 (Alexander Ham-
ilton).
Second, the Appointments Clause protects the power of the
executive by ‘‘preventing the diffusion of the appointment
power’’, that is, by ‘‘forbid[ding] Congress to grant the
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00007 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 121
appointment power to inappropriate members of the Execu-
tive Branch’’. Freytag v. Commissioner, supra at 878, 880; see
also Weiss v. United States, 510 U.S. 163, 188 n.3 (1994)
(Souter, J., concurring) (‘‘if Congress, with the President’s
approval, authorizes a lower level Executive Branch official
to appoint a principal officer, it again has adopted a more dif-
fuse and less accountable mode of appointment than the Con-
stitution requires’’). When Congress establishes an ‘‘inferior
Officer’’ in the Executive Branch, it can vest the appointment
power for that officer no further from the President than the
Head of a Department whom the President himself has
appointed. There is, so to speak, only one degree of separa-
tion between any duly appointed officer and the President,
thus maintaining the locus of executive power in the Presi-
dent himself.
Third, the Appointments Clause has a closely related
democratic purpose: ‘‘by limiting the appointment power’’ to
the President and his own immediate and principal
appointees, 3 the Framers sought to ‘‘ensure that those who
wielded it were accountable to political force and the will of
the people.’’ Freytag v. Commissioner, supra at 884. 4 James
Madison argued in The Federalist No. 39 that, because of the
Appointments Clause, the ‘‘officers of the Union, will * * *
be the choice, though a remote choice, of the people them-
selves’’.
Fourth:
This disposition was also designed to assure a higher quality of appoint-
ments: The Framers anticipated that the President would be less vulner-
able to interest-group pressure and personal favoritism than would a
collective body. ‘‘The sole and undivided responsibility of one man will
naturally beget a livelier sense of duty, and a more exact regard to reputa-
tion.’’
3 The Constitutional Convention did not accept a proposal by James Madison that ‘‘ ‘Superior
Officers below Heads of Departments ought in some cases to have the appointment of the lesser
offices.’ ’’ Freytag v. Commissioner, 501 U.S. 868, 884 (1991) (quoting 2 Records of the Federal
Convention of 1787, at 627–628 (M. Farrand ed. 1966)). Non-officer employees may be hired by
‘‘Superior Officers below Heads of Departments’’ (e.g., by the Commissioner of Internal Rev-
enue), but under the Appointments Clause as promulgated by the Convention and ratified by
the States, ‘‘Officers of the United States’’ may not be so hired.
4 See also Edmond v. United States, 520 U.S. 651, 663 (1997) (the Appointments Clause was
‘‘designed to preserve political accountability relative to important Government assignments’’);
Freytag v. Commissioner, 501 U.S. at 907 (Scalia, J., concurring) (‘‘the heads of departments
* * * possess a reputational stake in the quality of the individuals they appoint; and * * * they
are directly answerable to the President, who is responsible to his constituency for their appoint-
ments and has the motive and means to assure faithful actions by his direct lieutenants’’).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00008 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
122 135 UNITED STATES TAX COURT REPORTS (114)
Edmond v. United States, 520 U.S. 651, 659 (1997) (quoting
The Federalist No. 76, at 387 (Alexander Hamilton, M. Beloff
Ed. 1987)).
B. The distinctions in the Appointments Clause: ‘‘Officers’’,
‘‘inferior Officers’’, and non-officer employees
1. ‘‘Principal’’ officers vs. ‘‘inferior’’ officers
The rules of the Appointments Clause apply to ‘‘all other
Officers of the United States’’ (emphasis added), i.e., to offi-
cers other than those whose appointment is provided else-
where in the Constitution. As a result, ‘‘all persons who can
be said to hold an office * * * were intended to be included
within one or the other of these modes of appointment’’.
United States v. Germaine, 99 U.S. 508, 510 (1879) (emphasis
added). As a general rule, then, all ‘‘officers’’ must be nomi-
nated by the President and confirmed by the Senate.
The Appointments Clause makes an explicit distinction of,
and includes an exception for, ‘‘inferior Officers’’. The case
law applying this exception distinguishes these ‘‘inferior offi-
cers’’ from ‘‘principal officers’’. The term ‘‘principal officer’’ is
not in the Appointments Clause but is borrowed from the
immediately preceding clause (i.e., U.S. Const. art. II, sec. 2,
cl. 1), which provides that ‘‘The President * * * may require
the Opinion in writing, of the principal Officer in each of the
executive Departments, upon any Subject relating to the
Duties of their respective Offices’’. The Constitution thus con-
ceives of ‘‘principal officers’’, who must in every case be nomi-
nated by the President and confirmed by the Senate, and
‘‘inferior Officers’’, for whom an exception is allowed. In the
case of these inferior officers, ‘‘Congress may by Law vest’’
their appointment, ‘‘as they [in Congress] think proper, in
the President alone, in the Courts of Law, or in the Heads
of Departments.’’ Id. cl. 2 (emphasis added).
‘‘The line between ‘inferior’ and ‘principal’ officers is one
that is far from clear, and the Framers provided little guid-
ance into where it should be drawn.’’ Morrison v. Olson, 487
U.S. 654, 671 (1988). But in this case Mr. Tucker contends
only that appeals officers are inferior officers, not that they
are principal officers, so that the principal-inferior distinction
is not at issue.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00009 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 123
2. ‘‘Officers’’ vs. non-officer employees
A distinction implicit in the Appointments Clause is
between ‘‘Officers’’, to whom the clause applies, and those
employees who are not officers, to whom it does not apply.
‘‘The line between ‘mere’ employees and inferior officers is
anything but bright’’, Landry v. FDIC, 204 F.3d 1125, 1132
(D.C. Cir. 2000), 5 but it is the line that must be drawn in
this case. The Supreme Court has broadly defined the term
‘‘Officer of the United States’’ as ‘‘any appointee exercising
significant authority pursuant to the laws of the United
States’’, Buckley v. Valeo, 424 U.S. 1, 126 (1976), and ‘‘all
appointed officials exercising responsibility under the public
laws of the Nation’’, id. at 131. The Court has explained,
however, that the term ‘‘does not include all employees of the
United States * * *. Employees are lesser functionaries
subordinate to officers of the United States’’. Id. at 126
n.162. 6
Mr. Tucker does not dispute the existence of this sub-
officer category of ‘‘lesser functionaries’’; he does not argue
that all Federal employees are officers who must be
appointed. However, lest it be thought that the lack of
explicit warrant in the Constitution suggests that non-officer
employees cannot properly exist in the Executive Branch, or
that they cannot be numerous, it should be noted that the
5 See Jerry L. Mashaw, ‘‘Recovering American Administrative Law: Federalist Foundations,
1787–1801’’, 115 Yale L. J. 1256, 1268 (2006) (‘‘these Federalist-era state builders were not oper-
ating with a twenty-first-century kit of administrative understandings either. The idea of ‘office,’
for example, was highly ambiguous—an unsettled blend of public and private stations. This am-
biguity made the legal structure of office-holding problematic along multiple dimensions, from
the way ‘officers’ should be remunerated, to whether and how they were subject to hierarchical
direction and control by administrative superiors, to the means and extent to which they should
be legally responsible in court’’); id. at 1319.
6 Officers of the United States are also ‘‘employees’’ for some purposes—e.g., employment
taxes. See sec. 3401(c). However, the case law interpreting the Appointments Clause uses the
term ‘‘employee’’ to refer to non-officers, and we follow that usage here. The case law also uses
the term ‘‘lesser functionary’’ from Buckley v. Valeo, 424 U.S. 1, 126 n.162 (1976). Whatever its
apparent connotation, that phrase simply starts with the word ‘‘functionary’’—which com-
prehends principal officers and inferior officers, see Ex parte Siebold, 100 U.S. 371, 397–398
(1880) (‘‘as the Constitution stands, the selection of the appointing power, as between the func-
tionaries named, is a matter resting in the discretion of Congress’’)—and observes that employ-
ees subordinate to those functionaries are ‘‘lesser functionaries’’. The Buckley court distin-
guished ‘‘Officers of the United States’’, who are subject to the Appointments Clause, from non-
officer employees who fill ‘‘ ‘offices’ in the generic sense’’, 424 U.S. at 138. That is, not every
employee with the word ‘‘officer’’ in his job title is subject to the Appointments Clause, see Steele
v. United States, 267 U.S. 505, 507 (1925) (‘‘the expression ‘civil officer of the United States duly
authorized to enforce, or assist in enforcing, any law thereof,’ as used in the Espionage Act, does
not mean an officer in the constitutional sense’’), and Mr. Tucker does not contend that ‘‘appeals
officers’’ are subject to the Appointments Clause simply because of their job title.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00010 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
124 135 UNITED STATES TAX COURT REPORTS (114)
same question could arise with respect to the other two
branches of Government. The Constitution has no explicit
provision whatever that authorizes Senators, Representa-
tives, or congressional committees to hire employees of any
sort, whether officers, inferior officers, or lesser functionaries,
but it would be absurd to interpret the constitutional silence
on this matter as a bar to the legislature’s hiring personnel
necessary for its constitutionally mandated functions. 7 For
many years congressional employees were few in number—
but there were always at least a few: By 1792 the list of per-
sonnel for the House included the clerk of the House of Rep-
resentatives, a principal clerk, two engrossing clerks, a chap-
lain, a sergeant-at-arms, a door-keeper, and an assistant
door-keeper, and the list for the Senate included the sec-
retary of the Senate, two clerks, a door-keeper, and an assist-
ant door-keeper 8—a total of thirteen, none of whom were
explicitly authorized in the Constitution. Currently, the total
employment of the Senate and House numbers in the thou-
sands. 9
For the judicial branch the Constitution does include an
explicit provision for subordinate personnel, in that the
Appointments Clause itself provides that ‘‘Congress may by
Law vest the Appointment of such inferior Officers, as they
think proper, in * * * the Courts of Law’’. That is, it is
explicit that ‘‘the Courts of Law’’ may appoint ‘‘inferior Offi-
cers’’. The Judiciary Act of 1789, enacted by the first Con-
gress, provided for clerks of court and marshals, 10 and the
7 As one mundane example, Article I, Section 5, Clause 3 of the Constitution requires each
House to keep and publish ‘‘a Journal of its Proceedings,’’ a function hard to imagine Congress
accomplishing without staff.
8 See ‘‘List of Civil Officers of the United States, Except Judges, With Their Emoluments, For
the Year Ending October 1, 1792’’, at 59 (Feb. 27, 1793), printed in I Documents, Legislative
and Executive, of the Congress of the United States, at 57–58 (Gales & Seaton, 1834) (herein-
after, ‘‘1792 Roll’’). Treasury Secretary Alexander Hamilton submitted the 1792 Roll to the Sen-
ate with the statement that it constituted ‘‘statements of the salaries, fees, and emoluments
* * * of the persons holding civil offices or employments under the United States’’. Id. at 57.
A decade later, in 1802, the combined staff consisted of 14 persons. See ‘‘Roll of the Officers,
Civil, Military, and Naval, of the United States’’, at 302 (Feb. 17, 1802), printed in I Documents,
Legislative and Executive, of the Congress of the United States, at 260–319 (Gales & Seaton,
1834) (hereinafter, ‘‘1802 Roll’’). Treasury Secretary Albert Gallatin transmitted the list to the
President with the statement that it was ‘‘the list of the several officers of Government * * *
as compiled in this or received from the other Departments.’’ President Thomas Jefferson trans-
mitted it to Congress and called it ‘‘a roll of the persons having office or employment under the
United States.’’
9 See U.S. Office of Personnel Management, Federal Employment Statistics, http://
www.opm.gov/feddata/html/2009/March/table2.asp.
10 Act of Sept. 24, 1789, ch. 20, secs. 7, 27, 1 Stat. 76, 97.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00011 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 125
1792 Roll, at 59–60, does show such personnel on the list.
However, the courts had to maintain courthouses, keep
records, and collect fees, 11 functions for which additional
employees beyond ‘‘inferior Officers’’ would seem to be inevi-
table, if not initially then at least eventually. Currently the
Judicial Branch employs thousands of non-officers. 12
In any event, the courts have acknowledged the practical
necessity for and the propriety of non-officer employees in all
three branches, including the executive. Therefore, in this
case we do not decide whether such employees are constitu-
tionally possible (they are), but whether CDP ‘‘officer[s] or
employee[s]’’ are properly among their number.
C. Modes of appointment under the Appointments Clause
The Appointments Clause provides three modes of appoint-
ment for executive officers—i.e., by Presidential nomination
and Senate confirmation, by the President alone, or by the
Head of a Department. 13 However, as we noted above in part
I.B.1, while the Appointments Clause does allow an exception
for inferior officers to be appointed by the President alone or
by the Secretary, the terms of that exception are that ‘‘Con-
gress may by Law vest the Appointment’’ (emphasis added)
in the President alone or the Head of a Department. Where
Congress has not made any such exception ‘‘by Law’’, then
11 Id.
secs. 3, 5, 1 Stat. 73, 75; Act of Sept. 29, 1789, ch. 21, sec. 2, 1. Stat. 93.
12 See U.S. Office of Personnel Management, Federal Employment Statistics, http://
www.opm.gov/feddata/html/2009/March/table2.asp.
13 For purposes of the Appointments Clause, a department is a ‘‘ ‘freestanding, self-contained
entity in the Executive Branch’ ’’. Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561
U.S. ll, ll, 130 S. Ct. 3138, 3162 (2010) (quoting Freytag v. Commissioner,
501 U.S. 868,
915 (1991) (Scalia, J., concurring in part and concurring in judgment)). The parties agree that
the ‘‘Department’’ at issue is the Department of the Treasury (created not in Title 26 of the
United States Code but in Title 31 (‘‘Money and Finance’’), chapter 3), whose head is its Sec-
retary. Respondent does not contend that the IRS itself is a Department nor that the Commis-
sioner is a ‘‘Head’’ who can make appointments under the exception in the Appointments
Clause. The IRS operates not under the direct supervision of the President but ‘‘under the su-
pervision of the Secretary of the Treasury.’’ Sec. 7801(a); see Freytag v. Commissioner, supra
at 886 (‘‘the term ‘Department’ refers only to ‘‘ ‘a part or division of the executive government,
as the Department * * * of the Treasury,’ ’’ expressly ‘creat[ed]’ and ‘giv[en] . . . the name of
a department’ by Congress. Germaine, 99 U.S. at 510–511. * * * Accordingly, the term ‘Heads
of Departments’ does not embrace ‘inferior commissioners and bureau officers.’ Germaine, 99
U.S. at 511’’); Donaldson v. United States,
400 U.S. 517, 534 (1971) (‘‘the Internal Revenue Serv-
ice is organized to carry out the broad responsibilities of the Secretary of the Treasury under
§ 7801(a) of the 1954 Code for the administration and enforcement of the internal revenue
laws’’); LaSalle Rolling Mills, Inc. v. U.S. Dept. of Treasury, 832 F.2d 390, 392 (7th Cir. 1987)
(‘‘the IRS * * * is an agency of the Treasury Department’’).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00012 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
126 135 UNITED STATES TAX COURT REPORTS (114)
the default rule applies. 14 Section 7804(a) authorizes the
Commissioner to appoint IRS personnel ‘‘[u]nless otherwise
prescribed by the Secretary’’. We assume that, by that statu-
tory phrase, Congress has, for purposes of the Appointments
Clause, ‘‘vest[ed]’’ in the Secretary the power to appoint IRS
personnel if he chooses to so ‘‘prescribe’’. Therefore, if a given
IRS position (such as a CDP hearing officer) were found to con-
stitute an ‘‘inferior Office[ ]’’ requiring constitutional appoint-
ment, then the Secretary could presumably prescribe that
the Secretary would appoint personnel to fill that office, and
the requirements of the Appointments Clause would be ful-
filled. However, respondent does not contend that the Sec-
retary has made any such prescription or has appointed any
personnel in the Office of Appeals. Consequently, their hiring
does not conform to the Appointments Clause.
D. Appointment of revenue personnel in the late 18th
century
To apply the Appointments Clause to internal revenue per-
sonnel who are affected by the 1998 CDP provisions, we take
instruction from the manner in which internal revenue per-
sonnel were appointed and hired in the years immediately
after the Constitution was ratified. Of course, the earliest
Congresses and executive administrations were not infallible
in their adherence to the Constitution, and their example
cannot be followed uncritically; but we do properly note ‘‘the
early practice of Congress’’, Free Enter. Fund v. Pub. Co.
Accounting Oversight Bd., 561 U.S. ll, ll, 130 S. Ct.
3138, 3162 (2010), particularly where it concerns revenue
personnel, who were by no means an outlying example of
early Federal employment. On the contrary, in that era rev-
enue collection was a significant and conspicuous Federal
effort—both quantitatively and qualitatively. 15 Nonetheless,
14 See Edmond v. United States, 520 U.S. at 660 (‘‘The prescribed manner of appointment for
principal officers is also the default manner of appointment for inferior officers’’); see also Weiss
v. United States, 510 U.S. 163, 187 (1994) (Souter, J., concurring) (‘‘any decision to dispense with
Presidential appointment and Senate confirmation is Congress’s to make’’).
15 In the early years of the Republic, external and internal revenue employees were more than
half the Federal civilian workforce. See Leonard D. White, The Federalists: A Study in Adminis-
trative History 123 (1948). Revenue statutes make up, by pages, roughly 40 percent of the first
volume of Statutes at Large. ‘‘The revenue statutes were the most complexly articulated admin-
istrative system devised by the early Congresses’’. Mashaw, supra at 1278.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00013 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 127
very few internal revenue personnel were appointed under
the Appointments Clause.
1. The Department of the Treasury
The Act that established the Department of the Treasury
on September 2, 1789, created only six offices—the Secretary,
an Assistant to the Secretary, a Comptroller, an Auditor, a
Treasurer, and a Register. 16 Nine days later Congress
authorized the Secretary to ‘‘appoint such clerks * * * as
* * * [he] shall find necessary’’. 17 The organizing Act
charged the Secretary ‘‘to superintend the collection of the
revenue’’, 18 a function that would obviously require a
numerous staff. However, in 1792 the entire staff of the
Treasury Department—from Secretary down to ‘‘messenger
and office-keeper’’—consisted of 110 persons.
The personnel actually employed in the collection of rev-
enue were much more numerous and fell into two categories,
external and internal. The manner of appointment used in
these two categories was notably distinct.
2. External revenue collection
Before establishing the Treasury Department, Congress
had already provided five weeks earlier, in July 1789, for
some of the personnel necessary for collection of ‘‘external
revenue’’, i.e., duties on imports. 19 Congress had provided
that for each port ‘‘a naval officer, collector [20] and surveyor
16 Act of Sept. 2, 1789, ch. 12, 1 Stat. 65 (1789). Except for the Assistant to the Secretary,
who was to ‘‘be appointed by the said Secretary’’, the statute is not explicit as to who appoints
these officers, so the default rule of the Appointments clause applied. The position of Assistant
to the Secretary was later replaced by the Commissioner of the Revenue, who was made respon-
sible for ‘‘collection of the other revenues of the United States’’ (i.e., other than ‘‘duties on impost
and tonnage’’). See Act of May 8, 1792, ch. 37, sec. 6, 1 Stat. 280.
17 See Act of Sept. 11, 1789 (‘‘An Act for establishing the Salaries of the Executive Officers
of the Government, with their Assistants and Clerks’’), ch. 13, sec. 2, 1 Stat. 68; Act of May
8, 1792, ch. 37, sec. 11, 1 Stat. 281 (‘‘the Secretary of the Treasury be authorized to have two
principal clerks’’). Consistent with this statutory authorization, the 1792 Roll, at 57–58, lists the
officials whose offices were named in the organizing statute, and also lists several ‘‘messengers’’
and ‘‘office-keepers’’.
18 Act of Sept. 2, 1789, ch. 12, sec. 2, 1 Stat. 65; see also Act of June 5, 1794, ch. 48, sec.
4, 1 Stat. 376, 378 (‘‘the duties aforesaid shall be received, collected, accounted for, and paid
under and subject to the superintendence, control and direction of the department of the treas-
ury, according to the authorities and duties of the respective offices thereof ’’); Act of May 8,
1792, ch. 37, sec. 6, 1 Stat. 280 (‘‘the Secretary of the Treasury shall direct the superintendence
of the collection of the duties on impost and tonnage as he shall judge best’’).
19 Act of July 31, 1789, ch. 5, secs. 5, 6, 8, 1 Stat. 36–37.
20 These Presidentially appointed external revenue ‘‘collectors’’ were different from the internal
Continued
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00014 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
128 135 UNITED STATES TAX COURT REPORTS (114)
shall be appointed’’, presumably by the President. 21 It was
the duty of the collector ‘‘to employ proper persons as
weighers, gaugers, measurers and inspectors * * *, together
with such persons as shall be necessary to serve in the boats
* * * with the approbation of the principal officer of the
treasury department’’. 22
The next year, 1790, Congress provided that, for the collec-
tion of import duties, ‘‘there shall be established and
appointed, districts, ports and officers’’, with one or more dis-
tricts in every State. 23 The Presidentially appointed posts of
‘‘collector, naval officer and surveyor’’ were retained in this
regime, and once again they were to employ ‘‘weighers,
gaugers, measurers and inspectors’’, id. sec. 6, 1 Stat. 154,
presumably with the approval of the Secretary as the pre-
vious year’s statute had required. 24
In 1799 Congress authorized the President to build as
many as ten ships called ‘‘revenue cutters’’, each to be
manned by ‘‘one captain or master, and not more than three
lieutenants or mates, first, second, and third, and not more
revenue ‘‘collectors’’ authorized in 1798 and appointed by ‘‘supervisors’’, as discussed infra p.
131.
21 Act of July 31, 1789, ch. 5, sec. 1, 1 Stat. 29. The statute does not state by whom the ‘‘naval
officer, collector and surveyor’’ would be appointed. However, the preamble to the 1802 Treasury
Roll, at 261, describes ‘‘[t]he officers employed in the collection of the external revenue’’ as fall-
ing into three groups, one of which consisted of ‘‘collectors, naval officers, [and] surveyors’’ who
are said to have been ‘‘appointed by the President’’. The statute also allowed for ‘‘other person[s]
specially appointed by either’’ the naval officer, collector, or surveyor to search, seize, and secure
concealed goods. Act of July 31, 1789, ch. 5, sec. 24, 1 Stat. 43 (emphasis added). However, we
infer that those ‘‘special’’ appointments were occasional and temporary; and if so then they did
not constitute ‘‘offices’’. See infra part III.B.1.
22 That position of ‘‘principal officer’’ was established a month later as Secretary of the Treas-
ury. See also, to the same effect, Act of Mar. 2, 1799, ch. 22, sec. 21, 1 Stat. 642. Consistent
with the 1789 statute, the preamble to the 1802 Treasury Roll states that ‘‘port inspectors,
weighers, and gaugers’’ are ‘‘appointed by the collectors, with the approbation of the Secretary
of the Treasury’’. We assume that, by virtue of this required ‘‘approbation’’ of the Secretary,
these appointments satisfied the Appointments Clause as among those appointments that Con-
gress ‘‘vest[ed] * * * in the Heads of Departments’’. See 4 Op. Atty. Gen. 162 (1843) (‘‘approba-
tion’’ of the Secretary required for ‘‘inspectors of the customs’’ in Act of Mar. 3, 1815, ch. 94,
sec. 3, 3 Stat. 232, constituted appointment by the Secretary for purposes of the Appointments
Clause).
23 Act of Aug. 4, 1790, ch. 35, sec. 1, 1 Stat. 145.
24 The collector, naval officer, and surveyor were also authorized to name a ‘‘deputy’’ who
would serve ‘‘in cases of occasional and necessary absence, or of sickness, and not otherwise’’,
id. sec. 7, 1 Stat. 155, and would serve in the case of their disability or death ‘‘until successors
shall be duly appointed’’, id. sec. 8. See also, to the same effect, Act of June 5, 1794, ch. 49,
secs. 1, 12, 1 Stat. 378, 380; Act of Mar. 2, 1799, ch. 22, sec. 22, 1 Stat. 644. Because the depu-
ties’ positions were only temporary, we assume that they were not ‘‘offices’’ within the meaning
of the Appointments Clause, see infra part II.B.1, and that the clause is therefore not implicated
even where those non-appointed deputies were (temporarily) given substantial authority and
discretion.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00015 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 129
than seventy men, including non-commissioned officers, gun-
ners and mariners.’’ 25 (Emphasis added.) The statute pro-
vided that the President appointed the ‘‘officers’’ of the rev-
enue cutters, such as the captains or masters, but did not
appoint the numerous others, such as the non-commissioned
officers. 26 The same statute authorized the local collectors to
‘‘provide and employ such small open row and sail boats, in
each district, together with the number of persons to serve
in them, as shall be necessary for the use of the surveyors
and inspectors in going on board of ships or vessels and
otherwise, for the better detection of frauds’’, but to do so
‘‘with the approbation of the Secretary’’, which we take to
constitute an appointment by the Secretary. 27 Cf. supra note
24.
Thus, almost all of the persons employed for external rev-
enue collection under the early statutes either were
appointed by the President or the Secretary, or else were
temporary (i.e., the deputies, occasional inspectors, and per-
sons ‘‘specially appointed’’). The only permanent non-
appointed positions referenced in the statutes were the ‘‘non-
commissioned officers, gunners and mariners’’ for revenue
cutters. 28
Thus the Department of the Treasury and its external rev-
enue staff were virtually all ‘‘appointed’’. However, the
internal revenue personnel (the predecessors of today’s IRS)
were treated differently, as we now show.
3. Internal revenue collection
In 1792 Congress established the office of the Commis-
sioner of the Revenue, who was responsible for collection of
internal revenue. See supra note 16. In the previous year
Congress had already provided that the United States was
divided into fourteen districts for the purpose of collecting
Federal revenue, both internal and external, and it had
25 Act
of March 2, 1799, ch. 22, secs. 97 and 98, 1 Stat. 699.
26 Id.
sec. 99, 1 Stat 700. The preamble to the 1802 Roll, at 261, describes ‘‘[t]he officers em-
ployed in the collection of the external revenue’’ as falling into three groups, one of which con-
sisted of, inter alia, ‘‘masters and mates of revenue cutters’’ who are said to have been ‘‘ap-
pointed by the President’’.
27 Id. sec. 101, 1 Stat. 700. The statute also authorized the collectors to hire temporary and
occasional inspectors. Id. secs. 14, 19, 38, 53, 1 Stat. 636, 640, 658, 667.
28 Id. secs. 97 and 98. The 1802 Roll does not list ‘‘non-commissioned officers, gunners and
mariners’’ but does refer, at 261, to ‘‘bargemen employed by collectors’’. We infer that the 1802
Roll’s ‘‘bargemen’’ are these employees named in the statute.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00016 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
130 135 UNITED STATES TAX COURT REPORTS (114)
authorized for each district ‘‘a supervisor’’ and ‘‘inspectors’’
who were to be appointed by the President with the advice
and consent of the Senate. 29 However, that 1791 Act had
also provided ‘‘[t]hat the supervisor of each district shall
appoint proper officers to have the charge and survey of the
distilleries within’’ the district, 30 with no requirement that
the Secretary’s approval be obtained.
A 1794 internal revenue statute that imposed duties on
carriages provided for duties to ‘‘be levied, collected, received
and accounted for, by and under the immediate direction of
the supervisors and inspectors of the revenue, and other offi-
cers of inspection’’. 31 A similar act in 1796, also imposing
duties on carriages, referred to ‘‘officers or persons employed
under’’ the supervisors and inspectors. 32 In 1798 the super-
visors were authorized to hire clerks. 33 These ‘‘proper offi-
cers’’ (authorized in 1791), ‘‘other officers of inspection’’
(authorized in 1794), ‘‘officers or persons employed under’’
them (referred to in 1796), and clerks (authorized in 1798)
were thus not appointed by the President nor by the Head
of a Department.
In July 1798 Congress imposed a direct tax of $2 million,
apportioned among the States, to be assessed on ‘‘dwelling
houses, lands and slaves’’. 34 In the same month Congress
provided for the appointment of additional internal revenue
personnel to perform the necessary enumerations and valu-
ations. Act of July 9, 1798 (‘‘An Act to provide for the valu-
ation of Lands and Dwelling-Houses, and the enumeration of
Slaves within the United States’’), ch. 70, sec. 1, 1 Stat. 580.
For revenue purposes Congress subdivided the States into
various ‘‘divisions’’, id., and provided that the President
would appoint a ‘‘commissioner’’ for each division, id. sec. 3,
29 Act
of Mar. 3, 1791, ch. 15, sec. 4, 1 Stat. 199.
30 Id.
sec. 18, 1 Stat. 203 (emphasis added); see also Act of June 5, 1794, ch. 48, sec. 3, 1 Stat.
377 (referring to ‘‘the several officers of inspection acting under’’ the supervisors).
31 Act of June 5, 1794, ch. 45, sec. 2, 1 Stat. 374.
32 Act of May 28, 1796, ch. 37, sec. 11, 1 Stat. 481.
33 Act of July 11, 1798, ch. 71, sec. 2, 1 Stat. 592; see also Act of Apr. 6, 1802, ch. 19, sec.
5, 2 Stat. 150. In 1805 the Secretary was authorized to employ clerks to serve under the direc-
tion of the supervisor of the district of South Carolina. See Act of Jan. 30, 1805, ch. 11, sec.
1, 2 Stat. 311.
34 Act of July 14, 1798 (‘‘An act to lay and collect a direct tax within the United States’’), ch.
75, secs. 1 and 2, 1 Stat. 597, 598. Section 8 of Article I of the Constitution permits Congress
‘‘To lay and collect Taxes’’; but before the ratification of the 16th Amendment, ‘‘No capitation,
or other direct, Tax shall be laid, unless in proportion to the Census or Enumeration herein be-
fore directed to be taken.’’
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00017 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 131
1 Stat. 584. (Each of the commissioners was authorized to
appoint a clerk, id. sec. 5; and as is noted below, each
commissioner was authorized in 1800 to appoint his own
‘‘assistant’’.) The commissioners within the several States
were authorized collectively to ‘‘divide their respective states
into a suitable and convenient number of assessment dis-
tricts, within each of which they shall appoint one respect-
able freeholder to be principal assessor, and such number of
respectable freeholders to be assistant assessors, as they shall
judge necessary for carrying this act into effect’’. Id. sec. 7
(emphasis added). These assessors and assistant assessors
(appointed not by the President or the Secretary but by the
Presidentially appointed commissioners) were ‘‘to value and
enumerate the said dwelling-houses, lands and slaves’’, id.
sec. 8, 1 Stat. 585, in order to establish the tax base against
which the tax would be collected. One commentator observed:
The tax on land, dwellings, and slaves (1798) * * * involved a wide area
of official discretion. It required a valuation of property * * * for which
Congress formulated some general rules that left the assessment largely
to the judgment of local assessors—but subject to an administrative
review.
Leonard White, The Federalists: A Study in Administrative
History, 452 (1948).
For the collection itself, the 1798 Act provided that the
supervisors (Presidentially appointed) were ‘‘authorized and
required to appoint such and so many suitable persons in
each assessment district within their respective districts, as
may be necessary for collecting the said tax’’. Act of July 14,
1798, ch. 75, sec. 4, 1 Stat. 599. If a property owner did not
pay the tax upon demand, then the ‘‘collector’’ (again,
appointed not by the President or the Secretary but by the
Presidentially appointed supervisors) 35 could ‘‘proceed to col-
lect the said taxes, by distress and sale of the goods, chattels
or effects of the persons delinquent’’. Id. sec. 9, 1 Stat. 600.
Another statute from 1798 allowed a property owner who
disputed a valuation to appeal the matter to the principal
assessor. Act of July 9, 1798, ch. 70, secs. 19 and 20, 1 Stat.
588. (No provision is made for a further appeal to the Presi-
dentially appointed commissioner, but the commissioner did
35 The 1802 Roll, at 261, confirms that the ‘‘collectors and auxiliary officers [were] appointed
by the supervisors’’.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00018 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
132 135 UNITED STATES TAX COURT REPORTS (114)
have the power ‘‘to revise, adjust and vary the valuations
* * * as shall appear to be just and equitable’’. Id. sec. 22,
1 Stat. 589. 36) The right of appeal from an assessor’s valu-
ation did have an exception: Where a property owner had
submitted a property list that a court found to be ‘‘false and
fraudulent’’, the assessor was authorized to make a valuation
and enumeration ‘‘from which there shall be no appeal’’.
This 1798 Act provided for an additional official appointed
neither by the President nor by the Secretary: The super-
visors and inspectors (i.e., created in the 1791 and 1794 Acts)
were authorized ‘‘to depute one skilful and fit person, in each
assessment district, to be surveyor of the revenue’’. Id. sec. 24
(emphasis added). 37 A ‘‘surveyor of the revenue’’ was a posi-
tion different from the ‘‘surveyors’’ appointed by the Presi-
dent pursuant to the original 1789 Act. The principal duties
of the surveyor of the revenue were: (1) to preserve ‘‘the
records of the lists, valuations and enumerations’’ made
pursuant to the Act; (2) to make appropriate charges and
credits when property was sold; (3) to apportion value when
property was divided; (4) to value and assess newly built
houses; and (5) subject to the approval of the (Presidentially
appointed) inspector of the survey, to reduce valuations when
property was damaged or destroyed. Id. sec. 25. (In 1800 the
surveyor of the revenue was also empowered, when property
had been omitted from the lists, to ‘‘make a list and valu-
ation thereof ’’. 38)
In 1800 the Presidentially appointed commissioners were
permitted to hire ‘‘such assistants as they shall find nec-
essary, and appoint for that purpose’’, i.e., for the purpose of
completing additions to or reductions of assessments that the
commissioner has directed. 39
In sum, the early internal revenue statutes authorized the
employment not only of Presidentially appointed supervisors
and inspectors but also of the following personnel who were
not appointed by the President or the Secretary (and whose
positions were not temporary, like the deputies’):
36 See,
to the same effect, Act of Jan. 2, 1800, ch. 3, sec. 1, 2 Stat. 4.
37 See
also Act of Jan. 30, 1805, ch. 11, sec. 2, 2 Stat. 312.
38 Act of May 13, 1800, ch. 60, sec. 1, 2 Stat. 80.
39 Act of Jan. 2, 1800, ch. 3, sec. 2, 2 Stat. 4 (emphasis added). See also, to the same effect,
Act of May 10, 1800, ch. 53, sec. 2, 2 Stat. 72.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00019 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 133
• ‘‘proper officers to have the charge and survey of the
distilleries’’, Act of Mar. 3, 1791, ch. 15, sec. 18;
• ‘‘officers or persons employed under’’ the supervisors
and inspectors, Act of May 28, 1796, ch. 37, sec. 11;
• ‘‘clerks’’ hired by the supervisors and commissioners,
Act of July 11, 1798, ch. 71, sec. 2; Act of Apr. 16, 1802, ch.
19, sec. 5;
• ‘‘principal assessors’’ and ‘‘assistant assessors’’, Act of
July 9, 1798, ch. 70, sec. 7;
• ‘‘collectors’’, Act of July 14, 1798, ch. 75, secs. 4, 9;
• ‘‘surveyors of the revenue’’, Act of July 9, 1798, ch. 70,
sec. 24; and
• ‘‘assistants’’ to the commissioners, Act of Jan. 2, 1800,
ch. 3, sec. 2.
The 1802 Roll, at 280–288, lists 16 supervisors and 24
inspectors, thus totaling 40 Presidentially appointed internal
revenue personnel. It also lists 40 clerks, 361 collectors, 34
collectors’ clerks, and 102 ‘‘Auxiliary officers’’ (apparently a
generic term for the other personnel authorized in the stat-
utes). The ‘‘collectors and auxiliary officers, appointed by the
supervisors’’, id. at 261 (emphasis added), are significantly
more numerous than the Presidentially appointed super-
visors and inspectors.
E. Subsequent appointment of internal revenue personnel
In his first inaugural address, President Thomas Jefferson
called for the repeal of the original internal revenue taxes,
and that repeal took place in 1802. 40 Thereafter there were
four iterations of the internal revenue tax, before the modern
regime that is still in place today; 41 and the pattern of
appointments that had been set for internal revenue in the
late 18th century was followed in those four subsequent
internal revenue statutes. That is, non-appointed personnel
hired by persons inferior to the Secretary of the Treasury
had more than ministerial responsibility in internal revenue
statutes enacted during the War of 1812, 42 during the Civil
40 SeeAct of Apr. 6, 1802, ch. 19, 2 Stat. 148.
41 SeeLucius A. Buck, ‘‘Federal Tax Litigation and the Tax Division of the Department of Jus-
tice’’, 27 Va. L. Rev. 873, 875–877 (1941).
42 See Act of July 22, 1813, ch. 16, secs. 3, 8, 20–22, 3 Stat. 26, 27, 30, 31 (Assistant Assessors
could correct fraudulent property lists without any taxpayer appeal right; Deputy Collectors
could seize and sell personal and real property).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00020 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
134 135 UNITED STATES TAX COURT REPORTS (114)
War and Reconstruction, 43 after the ratification of the 16th
Amendment, 44 and in connection with the first World War. 45
The pattern set in the late 18th century persists today:
The general authority of the Secretary of the Treasury is
described in 31 U.S.C. sec. 321 (2006), and it does not include
employment or appointment of internal revenue personnel.
‘‘The Secretary of the Treasury is authorized to appoint
* * * such attorneys and other officers and employees as he
may deem necessary’’ in the Customs Service for external
revenue collection, 19 U.S.C. sec. 2072(a) (2006); but the Sec-
retary does not generally make appointments for internal
revenue collection. Rather, ‘‘the Commissioner of Internal
Revenue is authorized to employ such number of persons as
the Commissioner deems proper for the administration and
enforcement of the internal revenue laws’’. Sec. 7804(a).
II. The Internal Revenue Service Office of Appeals
A. The legal basis for the Office of Appeals
The Office of Appeals is a component of the IRS within the
Department of the Treasury. The Office of Appeals was not
created by the CDP provisions at issue here (i.e., sections
6320 and 6330), which were added to the Internal Revenue
43 See Act of Aug. 5, 1861, ch. 45, secs. 11, 34, 51, 12 Stat. 296, 303, 310 (Assistant Assessors
are described with less detail; Assistant Collectors could levy upon property and could arrest
and imprison taxpayers who refused to testify); Act of July 1, 1862, ch. 119, secs. 3, 5, 9, 12
Stat. 433–435 (Assistant Assessors and Deputy Collectors with powers similar to those in 1813);
Act of June 30, 1864, ch. 173, secs. 8, 10, 13, 14, 52, 118, 13 Stat. 224–227, 242, 282 (Assistant
Assessors and Deputy Collectors were given powers similar to those in 1862 (but arrest power
was replaced with summons authority and power to apply to a judge for arrest for contempt),
and both could also administer oaths and take evidence; Assistant Assessor could adjust taxable
income upward ‘‘if he shall be satisfied’’ that income was understated, with appeal of any such
increase to the assessor); Act of Mar. 3, 1865, ch. 78, 13 Stat. 480 (Assistant Assessor can adjust
taxable income upward ‘‘if he has reason to believe’’ that income is understated); Act of July
13, 1866, ch. 184, secs. 4, 9, 14 Stat. 99, 126, (Assistant Assessors could give permits for cigar-
making; Deputy Collectors could hold cotton until tax on it had been paid); Act of Mar. 2, 1867,
ch. 169, secs. 19, 20, 14 Stat. 482 (any internal revenue officer could be authorized to seize prop-
erty and could seize barrels if they had reason to believe that taxes on them had not been paid);
Act of July 14, 1870, ch. 255, sec. 36, 16 Stat. 271 (weighers, gaugers, measurers, and inspec-
tors).
44 See Act of Oct. 3, 1913, ch. 16, 38 Stat. 169, 179 (a Deputy Collector could demand that
a taxpayer show cause why the income amount on the return should not be increased and, if
no return or a false or fraudulent return had been provided, could make a return based on the
best information he could obtain, which return was then to be held prima facie good and suffi-
cient for all legal purposes).
45 See Act of Sept. 8, 1916, ch. 463, secs. 16–22, 39 Stat. 774–776 (Deputy Collector had pow-
ers similar to those in 1913); Act of Feb. 24, 1919, ch. 18, sec. 1317, 40 Stat. 1146–1148 (Deputy
Collector had powers similar to those in 1913 and 1916, and could administer oaths and take
evidence).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00021 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 135
Code in 1998, nor by the several other provisions of the Code
that mention the Office of Appeals. 46 Rather, all these statu-
tory provisions presume its prior existence. In its current
form the Office of Appeals exists pursuant to section 7804(a),
which provides:
SEC. 7804. OTHER PERSONNEL.
(a) APPOINTMENT AND SUPERVISION.—Unless otherwise prescribed by the
Secretary, the Commissioner of Internal Revenue is authorized to employ
such number of persons as the Commissioner deems proper for the
administration and enforcement of the internal revenue laws, and the
Commissioner shall issue all necessary directions, instructions, orders, and
rules applicable to such persons.
Congress thus provided that, except as the Secretary other-
wise prescribes, it is the Commissioner and not the Secretary
who shall ‘‘employ’’ (not ‘‘appoint’’) other personnel in the
Internal Revenue Service. 47 Pursuant to this congressional
mandate, the Commissioner established the Office of Appeals
and employed personnel to staff that office. The stated mis-
sion of the Office of Appeals is to resolve tax controversies
without litigation. This mission as well as the operating
directives and guidelines of the Office of Appeals are set
forth in the Internal Revenue Manual (IRM). 48
B. A brief history of the Office of Appeals
The first precursor to the Office of Appeals was established
by statute—i.e., by the Revenue Act of 1918, ch. 18, 40 Stat.
1057. Then known as the Advisory Tax Board, it had the
authority only to offer its recommendation on cases sub-
mitted to it by the Commissioner. The Advisory Tax Board
was soon replaced by the Committee on Appeals and Review,
46 See secs. 6015(c)(4)(B)(ii)(I) (innocent spouse relief), 6603(d)(3)(B) (deposits), 6621(c)(2)(A)(i)
(interest rates), 7122(e)(2) (taxpayer appeal of denial of offer-in-compromise), 7123 (Appeals dis-
pute resolution procedures), 7430(c)(2), (c)(7), (g)(2) (reasonable administrative and litigation
costs), 7522(b)(3) (content of letter of proposed deficiency), 7612(c)(2)(A) (protection of confiden-
tial information on taxpayer software). Mr. Tucker describes section 7122(e) as if it provides for
a ‘‘right to appeal * * * to an Appeals Officer’’, but the statute mentions no officer.
47 One exception to this general rule is present in 5 U.S.C. sec. 9503(a) (2006), which author-
izes the Secretary of the Treasury to appoint up to 40 individuals to critical administrative,
technical, and professional positions in the IRS before July 23, 2013, provided that such individ-
uals were not IRS employees before June 1, 1998, and that their appointments are limited to
no more than 4 years.
48 According to the Internal Revenue Manual (IRM), ‘‘The Appeals Mission is to resolve tax
controversies, without litigation, on a basis which is fair and impartial to both the Government
and the taxpayer and in a manner that will enhance voluntary compliance and public confidence
in the integrity and efficiency of the Service.’’ IRM pt. 8.1.1.1(1) (Oct. 23, 2007).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00022 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
136 135 UNITED STATES TAX COURT REPORTS (114)
which was given the authority to hear administrative
appeals from taxpayers and redetermine their deficiencies
pursuant to the Revenue Act of 1921, ch. 36, 42 Stat. 227.
The name and structure of the appeals function of the IRS
has changed several times since then, 49 but its mission to
resolve tax controversies without litigation has remained the
same. See IRS Document 7225, History of Appeals, 60th
Anniversary Edition 3–6 (Nov. 1987).
However, in the Internal Revenue Service Restructuring
and Reform Act of 1998 (RRA), Pub. L. 105–206, 112 Stat.
685, Congress enacted provisions that directly addressed the
appeals function. One of the four required features of the
plan of reorganization that the IRS was to undertake was
that it ‘‘ensure an independent appeals function within the
Internal Revenue Service’’. Id. sec. 1001(a)(4), 112 Stat. 689.
Explicit reference to the Office of Appeals was added to the
Code not only in the new CDP procedures in sections 6320
and 6330 but also in sections 6015(c)(4)(B)(ii)(I), 7122(d)(2)
(now designated (e)(2)), 7123, 7430(c)(2) and (g)(2)(A), and
7612(c)(2)(A).
C. ‘‘Appeals Officers’’ in the Office of Appeals
1. The Pre-CDP Role of the ‘‘Appeals Officer’’
The position of ‘‘Appeals Officer’’ has existed within the
Office of Appeals since 1978. IRS Document 7225, supra at 3–
5. Mr. Tucker does not argue that any Office of Appeals’ per-
sonnel were ‘‘inferior Officers’’ before the passage of the RRA,
but he asserts that as a result of the RRA those positions pos-
sessed authority that may be consitutionally exercised only
by an ‘‘officer of the United States’’.
The position of ‘‘Appeals Officer’’—as well as earlier posi-
tions within the Office of Appeals and its predecessors—had
the authority to make deficiency determinations and hear
collection-related appeals long before the passage of the RRA,
which enacted the CDP regime. The appeals function had the
49 The Committee on Appeals and Review was abolished on June 2, 1924, in favor of creating
the Board of Tax Appeals because it was thought that a judicial tribunal would better serve
taxpayers. IRS Document 7225, History of Appeals, 60th Anniversary Edition 3 (Nov. 1987).
However, in response to the rapidly growing docket of the Board of Tax Appeals, the Special
Advisory Committee was formed as a part of the Commissioner’s office to reprise the role of the
Committee on Appeals and Review. Id. This Court is the successor to the (statutory) Board of
Tax Appeals, and the Office of Appeals is the successor to the Special Advisory Committee. See
id.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00023 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 137
authority to redetermine deficiencies since 1921. IRS Docu-
ment 7225, supra at 3. And it had the authority to hear
collection-related appeals under the collection appeals pro-
gram (CAP) since 1996. 50 IRM pt. 8.24.1.1.1 (May 27, 2004).
‘‘CAP is an administrative review program not required by
statute.’’ Offiler v. Commissioner, 114 T.C. 492, 494 (2000).
In 1996 the IRS created CAP to provide taxpayers with the
right to appeal lien, levy, and seizure actions. IRM pt.
8.24.1.1.1(1) (May 27, 2004). In 1997 CAP was expanded to
implement the Taxpayer Bill of Rights 2, Pub. L. 104–168,
110 Stat. 1457 (1996), in order to provide taxpayers with the
right to appeal the proposed termination of installment
agreements. IRM pt. 8.24.1.1.1(2) (May 27, 2004); see also sec.
7122(e)(2). Although Congress did not codify CAP, the legisla-
tive history of the RRA shows that Congress was aware of CAP
when it enacted the CDP regime (discussed below). See S.
Rept. 105–174, at 92 (1998), 1998–3 C.B. 537, 628.
2. ‘‘Collection Due Process’’ procedures added to the Code
in 1998
If a taxpayer fails to pay any Federal income tax liability
after notice and demand, chapter 64 of the Code provides two
means by which the IRS can collect the tax: First, section
6321 imposes a lien in favor of the United States on all the
property of the delinquent taxpayer, and section 6323(f)
authorizes the IRS to file notice of that lien; second, section
6331(a) authorizes the IRS to collect the tax by levy on the
taxpayer’s property. 51
However, in 1998 Congress added to chapter 64 of the
Code certain provisions (in subchapter C, part I, and in sub-
50 Today both CAP and the CDP regime (discussed below) are administered by the Office of
Appeals. IRM pt. 8.24.1.1.1 (May 27, 2004). As a result, a taxpayer may be eligible to request
either a CAP or CDP hearing with respect to a lien or levy. Id. However, taxpayers are eligible
for CAP hearings in more circumstances than CDP hearings. Publication 1660, Collection Ap-
peal Rights 3 (rev. 03–2007). For example, a taxpayer is eligible for a CAP hearing when a CDP
hearing is unavailable because the taxpayer already had a CDP hearing or failed to timely re-
quest such a hearing. IRM pt. 8.24.1.1.1(6) (May 27, 2004).
51 Although this case involves only an Office of Appeals determination to sustain a notice of
lien and not a determination to proceed with a levy, the function of the ‘‘appeals officer’’ that
pertains to levies should be considered in determining the nature of that position. Cf. Freytag
v. Commissioner, 501 U.S. at 882 (‘‘The fact that an inferior officer on occasion performs duties
that may be performed by an employee not subject to the Appointments Clause does not trans-
form his status under the Constitution. If a special trial judge is an inferior officer for purposes
of * * * [some of his duties], he is an inferior officer within the meaning of the Appointments
Clause and he must be properly appointed’’).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00024 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
138 135 UNITED STATES TAX COURT REPORTS (114)
chapter D, part I) as ‘‘Due Process for Liens’’ and ‘‘Due
Process for Collections’’. The IRS must comply with those
provisions after filing a tax lien and before proceeding with
a levy. Explicit mention of ‘‘appeals officers’’ was introduced
by the RRA into these CDP provisions. 52 In the following brief
description of those CDP procedures, we emphasize phrases
from the statute that are important to the later analysis in
this Opinion.
Within five business days after filing a tax lien, the IRS
must provide written notice of that filing to the taxpayer.
Sec. 6320(a). After receiving such a notice, the taxpayer may
request an administrative hearing to ‘‘be held by the Internal
Revenue Service Office of Appeals.’’ 53 Sec. 6320(b)(1)
(emphasis added). Similarly, before proceeding with a levy,
the IRS must issue a final notice of intent to levy and must
notify the taxpayer of the right to an administrative hearing
to ‘‘be held by the Internal Revenue Service Office of
Appeals.’’ Sec. 6330(a) and (b)(1) (emphasis added). Section
6330(b)(3), entitled ‘‘Impartial officer’’ (emphasis added), pro-
vides that ‘‘[t]he hearing under this subsection shall be con-
ducted by an officer or employee who has had no prior
involvement with respect to the unpaid tax’’ at issue
(emphasis added).
The pertinent procedures for the agency-level CDP hearing
are set forth in section 6330(c). First, the statute provides,
‘‘The appeals officer shall at the hearing obtain verification
from the Secretary that the requirements of any applicable
law or administrative procedure have been met.’’ Sec.
6330(c)(1) (emphasis added). Second, the taxpayer may ‘‘raise
at the hearing any relevant issue relating to the unpaid tax
or the proposed levy,’’ including challenges to the appro-
52 The Internal Revenue Service Restructuring and Reform Act of 1998 (RRA), Pub. L. 105–
206, 112 Stat. 685, also included three references to ‘‘appeals officers’’ that are not codified in
the Internal Revenue Code. RRA section 3465(b), 112 Stat. 768, 1998–3 C.B. 228, provides: ‘‘The
Commissioner of Internal Revenue shall ensure that an appeals officer is regularly available
within each State’’; RRA section 1001(a)(4), 112 Stat. 689, 1998–3 C.B. 149, provides that the
reorganization plan should prohibit ‘‘ex parte communications between appeals officers and
other Internal Revenue Service employees’’; and RRA section 3465(c), 112 Stat. 768, 1998–3 C.B.
228, provides that the IRS should ‘‘consider the use of the videoconferencing of appeals con-
ferences between appeals officers and taxpayers seeking appeals in rural or remote areas.’’ (Em-
phasis added.)
53 To the extent practicable, a CDP hearing concerning a lien under section 6320 is to be held
in conjunction with a CDP hearing concerning a levy under section 6330, and the conduct of
the lien hearing is to be in accordance with the relevant provisions of section 6330. See sec.
6320(b)(4), (c).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00025 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 139
priateness of the collection action and offers of collection
alternatives. Sec. 6330(c)(2)(A). Additionally, the taxpayer
may contest the existence and amount of the underlying tax
liability, but only if he did not receive a notice of deficiency
or otherwise have an opportunity to dispute the tax
liability. 54 Sec. 6330(c)(2)(B). Section 6330(c)(3) then pro-
vides, ‘‘The determination by an appeals officer under this
subsection shall take into consideration’’ (emphasis added)—
(1) the verification that he obtained, (2) the issues raised by
the taxpayer, and (3) a balancing of the need for efficient tax
collection with concerns that the collection be no more intru-
sive than necessary.
The authority to conduct CDP hearings and make deter-
minations under sections 6320 and 6330 has been delegated
to three positions within the Office of Appeals: (i) ‘‘Appeals
Officers’’, (ii) ‘‘Settlement Officers’’, and (iii) ‘‘Appeals Account
Resolution Specialists’’. 55 Appeals Delegation Order 8–a, IRM
Exhibit 8.22.2–4 (Nov. 1, 2006). The authority to review and
approve those determinations is delegated to team managers.
Id. Today, in practice, settlement officers conduct CDP
hearings and make an initial determination that is subse-
quently approved or overruled by a team manager, who
makes the final determination on behalf of the Office of
Appeals.
If the taxpayer is not satisfied with the determination he
receives from the Office of Appeals, the taxpayer may ‘‘appeal
such determination to the Tax Court’’. Sec. 6330(d)(1). Where
challenges to the underlying liability are at issue (under sec-
tion 6330(c)(2)(B)), the Tax Court reviews the determination
de novo. Davis v. Commissioner, 115 T.C. 35, 39 (2000). For
other disputes, the Tax Court reviews the determination for
abuse of discretion, Sego v. Commissioner, 114 T.C. 604, 610
(2000); Goza v. Commissioner, 114 T.C. 176, 182 (2000)—that
is, to determine whether the determination was arbitrary,
54 Mr. Tucker did not challenge his underlying liabilities (which were, in fact, the liabilities
that he himself had reported on his late returns). However, as we observed supra note 51, in
order to determine the nature of the ‘‘appeals officer’’ position, we should consider all of its func-
tions, not only those that were operative in this case.
55 Mr. Tucker complains that ‘‘AARS is a fancy title for an even lower pay grade person who
the IRS used to call a ‘screener’ ’’ and that AARSs are ‘‘now holding CDP hearings in certain
low-dollar situations’’. However, no CDP determination is issued until it has been reviewed and
approved by a higher ranking team manager. If the Office of Appeals were to assign CDP hear-
ings to employees untrained in or incapable of the task, their inadequate performance would
be subject to review by this Court.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00026 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
140 135 UNITED STATES TAX COURT REPORTS (114)
capricious, or without sound basis in fact or law, see Murphy
v. Commissioner, 125 T.C. 301, 320 (2005), affd.
469 F.3d 27
(1st Cir. 2006).
Congress enacted these procedures in order to grant tax-
payers ‘‘protections in dealing with the IRS that are similar
to those they would have in dealing with any other creditor’’,
that is, in order to ‘‘afford taxpayers adequate notice of
collection activity and a meaningful hearing before the IRS
deprives them of their property.’’ S. Rept. 105–174, supra at
67, 1998–3 C.B. at 603. It is fair to say that the officer or
employee who conducts the CDP hearing is performing a crit-
ical role in an important tax proceeding.
3. Post-CDP hearing procedures
However, because the ‘‘finality’’ of an Office of Appeals
determination is relevant to the appeals officer’s status as an
‘‘officer’’ under the Appointments Clause, it is pertinent to
note the circumstances in which the IRS may face again the
same taxpayer whose collection issues and underlying
liability have been previously considered by the Office of
Appeals in a CDP hearing, and to discern the extent, if any,
to which the IRS will be bound to the determination made in
the CDP context—either a determination on a liability issue
(whether the tax is owed) or determination on a collection
issue (whether and how the tax will be collected).
a. Collection issues
If the CDP officer or employee enters into an installment
agreement under section 6159, a closing agreement under
section 7121, or an OIC under section 7122 with the taxpayer,
then of course the agency will be bound under general con-
tract principles to honor the agreement. 56 However the
agency is also bound to honor such agreements that it enters
into outside of the CDP context, whether by the Office of
Appeals or by another branch of the IRS. Consequently, the
authority to enter into such agreements on behalf of the IRS
56 In addition, if an agreement embodied in Form 870–AD, ‘‘Offer of Waiver of Restrictions
on Assessment and Collection of Deficiency in Tax and of Acceptance of Overassessment’’, is ac-
cepted by the IRS and executed with the taxpayer, equitable estoppel may apply to make that
agreement binding on all functions of the IRS. See Kretchmar v. United States, 9 Cl. Ct. 191,
198 (1985).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00027 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 141
is not peculiar to an officer or employee conducting a CDP
hearing.
However, the CDP hearing may yield a determination by
the Office of Appeals that is not embodied in one of those
agreements, such as a determination that the taxpayer
should be put in ‘‘currently not collectible’’ (CNC) status, see
IRM pt. 8.22.2.4 (Mar. 11, 2009), 8.23.3.13 (Aug. 28, 2009), or
that a lien should be released or subordinated, see sec. 6325;
IRM pt. 8.22.3.9.6.1 (Apr. 8, 2009), 8.22.3.9.6.2 (Oct. 19, 2007),
8.22.2.4.6 (Dec. 1, 2006), or that a levy should be released,
see sec. 6343; IRM pt. 8.22.3.9.5 (Apr. 8, 2009). We find no
authority addressing any binding character of these deter-
minations, but we assume that their force is enhanced by
section 6330(d)(2), which provides:
(2) JURISDICTION RETAINED AT IRS OFFICE OF APPEALS.—The Internal
Revenue Service Office of Appeals shall retain jurisdiction with respect to
any determination made under this section, including subsequent hearings
requested by the person who requested the original hearing on issues
regarding—
(A) collection actions taken or proposed with respect to such deter-
mination; and
(B) after the person has exhausted all administrative remedies, a
change in circumstances with respect to such person which affects such
determination.
That is, we assume that the retention of ‘‘jurisdiction’’ by the
Office of Appeals ‘‘with respect to any determination’’ would
bar IRS collection personnel from contradicting Appeals’
collection determination. If collection personnel undertook
collection action in violation of Appeals’ determination, then
that action could be halted by Appeals in a retained jurisdic-
tion hearing. Even so, the sense in which Appeals’ collection
determination can be said to be binding is qualified in sev-
eral significant respects:
First, section 6330(d)(2) would bind only non-Appeals func-
tions. The Office of Appeals itself, if it ‘‘retains jurisdiction’’,
must retain jurisdiction to modify its determination.
Second, if the Office of Appeals sustains the notice of lien
or intent to levy, there are circumstances in which the IRS 57
57 If the taxpayer challenges the validity of a lien in an action to quiet title under 28 U.S.C.
sec. 2410 in Federal District Court, the Government will be represented not by the IRS attor-
neys in the Office of Chief Counsel but by the Department of Justice, pursuant to 28 U.S.C.
sec. 516. If the Department of Justice concludes that the lien is not valid, then there is no ap-
Continued
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00028 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
142 135 UNITED STATES TAX COURT REPORTS (114)
thereafter may forgo collection or make accommodations
nonetheless. Collection personnel may perform the investiga-
tion required by section 6331(j) and decide not to proceed
with a levy against specific property. Collection personnel
retain the power to withdraw a notice of lien pursuant to sec-
tions 6323(j), to release a lien pursuant to section 6325, and
to release a levy pursuant to section 6343. The taxpayer is
always free to submit to IRS collection personnel another pro-
posal of an installment agreement or an OIC, and those per-
sonnel have authority to accept that new proposal notwith-
standing the Office of Appeals’ rejection of the taxpayer’s
prior proposal. See IRM pt. 1.2.44.2. 58
Third, on the other hand, if the Office of Appeals deter-
mined not to sustain the notice of lien or of proposed levy
that was challenged in a CDP hearing, IRS collection per-
sonnel would be free to issue another notice of lien or intent
to levy, as long as the period of limitations for collection, see
sec. 6502, remained open. The subject matter of a CDP
hearing is the particular notice of lien or intent to levy that
the taxpayer challenged under section 6320(a)(3)(B) or
6330(a)(3)(B).
Fourth, the National Taxpayer Advocate or her delegate
can issue a Taxpayer Assistance Order (TAO) requiring the
IRS to ‘‘release property of the taxpayer levied upon’’ or to
‘‘cease any action, take any action as permitted by law, or
refrain from taking any action’’ with respect to its collection
activities. See sec. 7811(b); 26 C.F.R. sec. 301.7811–1(c),
Proced. & Admin. Regs.; see also IRM pt. 13.1.20.3(1) (Dec.
15, 2007) (‘‘A TAO may be issued for either of two purposes:
A. To direct the OD/Function [to] take a specific action, cease
a specific action, or refrain from taking a specific action; or
B. To direct the IRS to review at a higher level, expedite
consideration of, or reconsider a taxpayer’s case’’).
Fifth, by its nature a collection determination could be
binding only until there has been a change in the taxpayer’s
circumstances. The collection issues that the officer or
employee may address in the agency-level CDP hearing
parent basis for arguing that the Government is bound by the Office of Appeals’ contrary deter-
mination sustaining the lien.
58 See also H. Conf. Rept. 105–599, at 289 (1998), 1998–3 C.B. 747, 1020 (‘‘A taxpayer could
apply for consideration of new information, make an offer-in-compromise, request an installment
agreement, or raise other considerations at any time before, during, or after the Notice of Intent
to Levy hearing’’).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00029 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 143
involve the financial circumstances of the taxpayer that, by
their nature, may change after the hearing. See sec.
6330(d)(2)(B); 26 C.F.R. sec. 301.6330–1(e)(1), Proced. &
Admin. Regs.; Rev. Proc. 2003–71, sec. 4.03, 2003–2 C.B. 517,
518. To decide whether the IRS ought to proceed with collec-
tion, the officer or employee is instructed by agency regula-
tions to request and obtain detailed financial information
about the taxpayer during the hearing, and to make a deter-
mination on the basis of that information. See 26 C.F.R. sec.
301.6330–1(e)(1), Proced. & Admin. Regs. (‘‘Taxpayers will be
expected to provide all relevant information requested by
Appeals, including financial statements, for its consideration
of the facts and issues involved in the hearing’’). However, if
and when a taxpayer later becomes ill or loses a job, or when
a previously ill or unemployed taxpayer is healed or gets a
job, then the position of the tax collector may well change.
This reality is reflected explicitly in section 6330(d)(2)(B),
which contemplates ‘‘a change in circumstances with respect
to such person which affects such determination.’’ Thus, an
appeals officer’s collection judgments reflected in a notice of
determination issued after a CDP hearing are not necessarily
the last word, even for the Office of Appeals itself—nor
should they be. Instead, the Office of Appeals retains juris-
diction to continue to consider collection issues over time.
This flexibility helps to ensure that, on a continuing basis,
the IRS will tailor its collection activities to the taxpayer’s
current circumstances and that the IRS will not take collec-
tion action that is arbitrary or which creates unnecessary
hardship for the taxpayer.
Sixth, if the taxpayer appeals an adverse determination to
the Tax Court, then, as we have noted in part II.C.2 above,
the appeals officer’s collection decisions are reviewed in
litigation. In that context, the determination is of course not
binding on the Tax Court, which reviews for abuse of discre-
tion. More important for evaluating ‘‘finality’’, however, is the
fact that even the IRS as a litigant is not bound by the posi-
tion in the Office of Appeals’ notice of determination. In
defending against that CDP appeal, the IRS (acting through
its attorneys under the Chief Counsel) may re-think the
appeals officer’s collection decisions and may take a posi-
tion—in the litigation or in the settlement of it—that is dif-
ferent from the position reflected in the Office of Appeals’s
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00030 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
144 135 UNITED STATES TAX COURT REPORTS (114)
CDP determination. See 26 C.F.R. sec. 601.106(a)(1)(i), (d),
Statement of Procedural Rules; Rev. Proc. 87–24, 1987–1
C.B. 720; General Counsel Order No. 4. (Jan. 19, 2001). It is
the experience of this Court that the Office of Chief Counsel
sometimes does not defend the Office of Appeals’ determina-
tion but rather admits an abuse of discretion and moves the
Court to remand the case to the Office of Appeals for a
supplemental CDP hearing. In those instances the agency’s
position (as taken by Chief Counsel) contradicts the notice of
determination, to which the agency is manifestly not bound.
Consequently, the CDP determination of the Office of
Appeals is not necessarily the agency’s last word on collection
issues.
b. Underlying liability
As we noted above in part II.C.2, a taxpayer who did not
have a previous opportunity to dispute the amount of his
underlying tax liability may raise such a dispute in the
agency-level CDP hearing, pursuant to section 6330(c)(2)(B).
In such a circumstance, the officer or employee conducting
the hearing for the Office of Appeals will determine the IRS’s
position on that taxpayer’s liability. Respondent explains
that, in practice, a settlement officer will conduct the CDP
hearing and will refer the case to an appeals officer to con-
sider the issue of underlying liability. When the appeals
officer makes a determination with respect to the liability
issue, the case is returned to the settlement officer, who
addresses any collection issues and makes an initial deter-
mination that is subsequently approved or overruled by a
team manager, who makes the final determination on behalf
of the Office of Appeals. The settlement officer will not
reconsider the appeals officer’s determination with respect to
the liability issue, and generally, neither will anyone else
within the Office of Appeals.
We noted in Lewis v. Commissioner, 128 T.C. 48, 59 (2007)
(quoting 26 C.F.R. sec. 601.106(a)(1)(ii), Statement of Proce-
dural Rules), that ‘‘[t]he Appeals officer has the ‘exclusive
and final authority’ to determine the liability.’’ 59 On the
59 This provision in the regulations does not actually create ‘‘exclusive and final authority’’ but
rather presumes such authority on the part of ‘‘the regional commissioner’’ and then provides
that Appeals personnel ‘‘represent’’ the regional commissioner in that authority. It is a provision
generally applicable when the Office of Appeals has jurisdiction over a determination of liability.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00031 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 145
other hand, it is clear that such determinations are not
absolutely ‘‘final’’. See Jackson v. Commissioner, T.C. Memo.
1988–143 (‘‘Determinations by the Commissioner are not
judicial in nature, but rather are administrative determina-
tions, and are not res judicata to bind him for subsequent
years, or for that matter, the same taxable year’’); 1B J.
Moore, Moore’s Federal Practice, par. 0.422[2], at 3403 (2d
ed. 1974) (‘‘It is axiomatic to the doctrines of res judicata and
collateral estoppel that only judicial decisions are given
conclusive force in subsequent legal proceedings. Thus deter-
minations made by the Commissioner of Internal Revenue
are not judicial in nature but administrative and are not res
judicata to bind him for the same taxable year or for subse-
quent years’’). We must therefore discern the sense in which
the CDP determination of underlying liability may be said to
be ‘‘final’’.
i. If the liability determination is favorable to the taxpayer
If the liability determination made by the Office of Appeals
in the CDP context is favorable to the taxpayer, then the CDP
process generally ends with a unilateral agency determina-
tion not to proceed with collection. 60 Although the team
manager in charge of the case has the authority to execute
a closing agreement with the taxpayer under section 7121,
see IRS Deleg. Order 97 (Rev. 34), IRM pt. 1.2.47.6 (Aug. 18,
1997), generally no closing agreement is executed, and no
litigation ensues. Respondent states that, as with a liability
determination in a notice of deficiency, ‘‘an underlying
It does apply when underlying liability is properly at issue in the CDP context, but its most
frequent application must be in the non-CDP cases that come to the Office of Appeals for a defi-
ciency determination. If the delegated authority to make the IRS’s ‘‘exclusive and final’’ deter-
mination of a taxpayer’s liability caused the Office of Appeals personnel to be ‘‘inferior Officers’’,
then it would pose questions about the necessity of appointing even the Appeals personnel who
handle non-CDP matters and the regional commissioners who possess this authority in the first
instance and from whom the Office of Appeals receives this authority only derivatively.
60 If a taxpayer in a CDP hearing proposes not a complete concession by the IRS but an offer-
in-compromise (OIC) based on doubt as to liability, and if the Office of Appeals accepts the OIC,
then the resulting agreement is binding on the IRS. However, that binding effect is not unique
to the CDP process; rather, the OIC accepted in the CDP context has the same effect (no more,
and no less) as an OIC accepted in any context. In the absence of an OIC or a closing agree-
ment, the non-liability determination is simply reflected in the notice of determination, see IRM
pt. 8.22.3.9(1) (Oct. 19, 2007) (‘‘Abatement of Tax’’), and then is effectuated either by Office of
Appeals personnel directly, see IRM pt. 8.22.3.9.3.1 (Oct. 19, 2007) (‘‘APS [Appeals Processing
Services] will input adjustments to tax’’), 8.22.3.9.3.1.1(2) (Oct. 19, 2007) (‘‘APS will abate the
SFR/ASFR assessment and reverse withholding as requested by the hearing officer’’), or by col-
lection personnel, see IRM pt. 5.1.9.3.10(6) (Dec. 15, 2003), 5.19.8.4.9(2) (Nov. 1, 2007),
5.19.8.4.14(1) (Nov. 1, 2007) (‘‘CDP ‘back-end’ work’’).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00032 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
146 135 UNITED STATES TAX COURT REPORTS (114)
liability determination in a CDP case is also binding on the
Examination function. The Examination function generally
has no opportunity to review Appeals’ determination’’; and
we assume arguendo that this is correct. 61 However, this
binding character is limited.
First, if it is true (as section 6330(d)(2) provides) that the
Office of Appeals ‘‘shall retain jurisdiction with respect to
any determination’’ (emphasis added), then it would seem
that the Office of Appeals itself must have jurisdiction to
reconsider its pro-taxpayer liability determination.
Second, if the taxpayer had paid all or part of the liability
that had been at issue in a CDP hearing and thereafter
sought a refund of it through litigation, no collateral estoppel
or res judicata effect to govern the outcome of the refund suit
would arise from the prior CDP determination. See Jackson
v. Commissioner, supra. The case would be defended not by
the IRS but by attorneys of the Department of Justice, see 28
U.S.C. sec. 516 (2006), 62 which also has settlement authority
in such cases, see sec. 7122. 63 But even in refund suits han-
dled by the Department of Justice the IRS must request any
counterclaim, see sec. 7403, must give a defense rec-
ommendation, see 28 U.S.C. sec. 520 (2006), and must give
its views on proposed settlements. 64 In that context, it is the
Office of Chief Counsel, and not the Office of Appeals, that
speaks for the IRS; and Chief Counsel is not bound by the
appeals officer’s CDP determination. IRM pt. 34.8.2.11.5(4)
61 It is not clear why Examination would necessarily be bound by the CDP determination of
a liability issue. A liability determination in a notice of deficiency (whether issued by the Office
of Appeals or another IRS function) may acquire a quasi-binding character within the agency
because section 6212(c) restricts the determination of further deficiencies (though section
6214(a) permits an increased deficiency if the matter is challenged in the Tax Court); but the
CDP determination may arise in the absence of a notice of deficiency (as when a taxpayer dis-
putes tax assessed pursuant to his own return) and does not result in the issuance of a notice
of deficiency—so that section 6212(c) is not implicated. Amicus observes that the point has not
been litigated but concludes that the liability determination in a CDP hearing is probably not
binding elsewhere, citing Botany Worsted Mills v. United States, 278 U.S. 282, 289 (1929).
62 By regulation, 28 C.F.R. sec. 0.15 (2007), it is the Deputy Attorney General (not one of the
‘‘Heads of Departments’’, in Appointments Clause parlance) who hires Department of Justice
trial attorneys.
63 An Assistant Attorney General heads the Tax Division and hires the Chiefs of the litigating
sections in the Tax Division. See Memorandum of Dec. 29, 1999, to Heads of Department Com-
ponents from then-Deputy Attorney General Eric Holder, available at http://www.usdoj.gov/jmd/
ps/sesdelegmemo.htm. Settlement authority is delegated to those Chiefs. See Tax Division Direc-
tive No. 135, reprinted in 28 C.F.R. pt. O, subpt. Y, app.
64 See id. (delegating settlement authority only in cases in which the agency agrees, and there-
by requiring solicitation of IRS views to settle tax cases); see also ‘‘Department of Justice Tax
Division Settlement Reference Manual’’, at 5–6, 16, available at http://www.usdoj.gov/tax/
readingroom/foia/tax.htm.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00033 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 147
(Aug. 11, 2004). The Government might therefore resist the
refund claim—and might even plead a counterclaim—by
asserting liabilities that the Office of Appeals did not sus-
tain, taking its cue not from the Office of Appeals but from
the Office of Chief Counsel, which must be independent and
impartial. 65
Thus, a pro-taxpayer CDP determination on underlying
liability has at most a limited ‘‘finality’’ within the agency.
ii. If the liability determination is not favorable to the
taxpayer
If the liability determination made by the Office of Appeals
in the CDP context is not favorable to the taxpayer, then
there are several contexts in which the IRS may take a posi-
tion different from that reflected in the CDP determination.
(A). CDP litigation
The taxpayer may appeal the adverse CDP liability deter-
mination to the Tax Court, pursuant to section 6330(d). If
the taxpayer does appeal, then the Tax Court reviews the
liability issues de novo. Davis v. Commissioner, 115 T.C.
39. In Tax Court proceedings the IRS is represented by the
Office of Chief Counsel, see sec. 7452, which may re-think
the liability issues and may take a position different from
that reflected in the notice of determination. See IRM pt.
1.1.6.1 (quoted supra note 65). In addition, the Office of Chief
Counsel—not the Office of Appeals—has the authority to
settle CDP cases that reach litigation, see sec. 601.106(a)(2)(i),
Statement of Procedural Rules; Rev. Proc. 87–24, 1987–1
C.B. 720, and it has the authority to settle CDP cases without
the concurrence of the Office of Appeals, see Rev. Proc. 87–
24, supra; IRM pt. 35.5.1.4.3(2), 35.5.2.7(2), 35.5.2.14(2)(B)
(Aug. 11, 2004).
If the taxpayer who receives an adverse notice of deter-
mination reflecting the officer’s or employee’s decision about
underlying liability decides not to appeal to the Tax Court,
then the IRS may nonetheless meet this taxpayer again in a
65 See IRM pt. 1.1.6.1 (July 29, 2005) (‘‘Counsel must interpret the law with complete impar-
tiality so that the American * * * [public] will have confidence that the tax law is being applied
with integrity and fairness.’’).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00034 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
148 135 UNITED STATES TAX COURT REPORTS (114)
variety of other circumstances in which, again, the CDP
liability determination will not be binding on the IRS:
(B). Audit reconsideration
Audit reconsideration is a substantive review of the tax-
payer’s liability that may result in the abatement of an
assessed tax liability. Specifically, audit reconsideration ‘‘is
the process the IRS uses to reevaluate the results of a prior
audit where additional tax was assessed and remains unpaid,
or a tax credit was reversed.’’ IRM pt. 4.13.1.2 (Oct. 1, 2006).
The IRS’s authority to conduct an audit reconsideration is
grounded in section 6404(a), which provides that ‘‘[t]he Sec-
retary is authorized to abate the unpaid portion of the
assessment of any tax or any liability in respect thereof,
which—(1) is excessive in amount, or (2) is assessed after the
expiration of the period of limitations properly applicable
thereto, or (3) is erroneously or illegally assessed.’’
Audit reconsideration is not precluded by a prior CDP
determination. See IRM pt. 4.13.1.8 (Oct. 1, 2006) (listing cir-
cumstances in which ‘‘a request for [audit] reconsideration
will not be considered’’; prior CDP hearing is not listed).
Therefore, a taxpayer who has received an adverse CDP
determination with respect to his underlying liability could
nonetheless have his liability redetermined in the course of
an audit reconsideration.
(C). District Court collection suit
If the taxpayer does not pay the tax, the IRS may request
the Department of Justice to file a collection suit against the
taxpayer in Federal District Court. See sec. 7403(a) (‘‘the
Attorney General * * *, at the request of the Secretary, may
direct a civil action to be filed in a district court’’). It is the
Office of Chief Counsel, and not the Office of Appeals, that
decides for the IRS whether to make that request, and the
Chief Counsel is not bound by the appeals officer’s CDP deter-
mination of liability. See General Counsel Order No. 4 (rev.
Jan. 19, 2001).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00035 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 149
(D). Request for abatement, refund claim, and refund
litigation
The taxpayer may request an abatement of tax, or he may
pay the tax and claim a refund. We are aware of no reason
or rule requiring that, when the IRS then considers adminis-
tratively that request for abatement or claim for refund, it is
bound by the appeals officer’s adverse CDP determination. If
the IRS denies a refund claim, the taxpayer may file a refund
suit in Federal District Court or the Court of Federal Claims.
As we noted above, the IRS will be asked for its defense rec-
ommendation and for its views on proposed settlements. In
that context, it will be the Office of Chief Counsel, and not
the Office of Appeals, that will speak for the IRS, and the
Chief Counsel will not be bound by the appeals officer’s CDP
determination. See supra part II.C.3.b.i.
In sum, the collection and liability determinations made in
CDP hearings by officers and employees of the Office of
Appeals are an important aspect of the agency’s administra-
tion of the tax law, and they affect to a greater or lesser
extent the agency’s ultimate position with regard to the tax
liability and the collection of it. But there are numerous cir-
cumstances in which those determinations may not be the
IRS’s last word.
4. The tax administration context of the CDP ‘‘officer or
employee’’
The IRS personnel who are appointed by the President or
the Secretary of the Treasury are the Commissioner, see sec.
7803(a)(1), the Chief Counsel, see sec. 7803(b)(1), members of
the Internal Revenue Service Oversight Board, see sec.
7802(b)(1), and the National Taxpayer Advocate, see sec.
7803(c)(1). See also supra note 47. Personnel to fill other
positions in the IRS are hired by the Commissioner pursuant
to section 7804(a).
These hired, non-appointed positions include (i) the Deputy
Commissioner for Services and Enforcement, who is dele-
gated the authority to oversee the four primary operating
divisions of the IRS, see IRM pt. 1.1.5.3 (Oct. 28, 2008); (ii) the
Deputy Commissioner for Operations Support, who is dele-
gated the authority to oversee the integrated support func-
tions of the IRS, see IRM pt. 1.1.5.4 (Oct. 28, 2008); (iii) the
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00036 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
150 135 UNITED STATES TAX COURT REPORTS (114)
Commissioners of the Wage and Investment Division, the
Small Business/Self-Employed Division, the Tax-Exempt and
Government Entities Division, and the Large and Mid-Size
Business Division, who are delegated the authority to super-
vise and manage those divisions, see IRM pt. 1.1.13.1 (Sept.
1, 2005), 1.1.16.1 (Mar. 1, 2007), 1.1.23.2 (Feb. 1, 2007),
1.1.24.1 (Nov. 1, 2006); (iv) the Deputy Chief Counsel (Tech-
nical), who serves as the principal deputy to the Chief
Counsel, acts as Chief Counsel when that office is vacant,
maintains jurisdiction over legal issues arising in published
guidance, letter rulings, technical advice, and other proc-
esses, and participates in the interpretation and development
of internal revenue laws, see IRM pt. 1.1.6.2 (Dec. 16, 2009),
(v) the Deputy Chief Counsel (Operations), who maintains
jurisdiction over issues arising in litigation nationwide and
participates in the formulation of tax litigation policy, see
IRM pt. 1.1.6.3 (Dec. 16, 2009), and (vi) the Chief of the Office
of Appeals, who is delegated the authority to plan, manage,
direct, and execute the nationwide activities of that office,
see IRM pt. 1.1.7.1 (Feb. 5, 2008). 66
Lower in the IRS hierarchy, these hired positions include
revenue officers (at or above the rank of GS–9 67), who are
delegated the authority (i) to issue, serve, and enforce sum-
monses, to set the time and place for appearance, to take
testimony under oath of the person summoned, and to
receive and examine data produced in compliance with the
summons, see IRS Deleg. Order 25–1 (formerly IRS Deleg.
Order 4 (Rev. 23), 55 Fed. Reg. 7626); (ii) to issue notices of
levy, see IRS Deleg. Order 5–3 (Rev. 1), IRM pt. 1.2.44.3 (Nov.
8, 2007); and (iii) to issue notices of Federal tax lien, see
Delegation Order 5–4 (Rev. 1), IRM pt. 1.2.44.4 (Sept. 23,
2005). That is, revenue officers have the power—unless the
CDP process intervenes—to effect the actual collection of tax.
66 Justice Breyer would evidently characterize many of these personnel as ‘‘officers’’. See Free
Enter. Fund v. PCAOB, 561 U.S. at ll 130 S. Ct. at 3180 (Breyer, J., dissenting) (‘‘by virtually
any definition, essentially all SES [Senior Executive Service] officials qualify as ‘inferior officers,’
for their duties, as defined by statute, require them to ‘direc[t] the work of an organizational
unit,’ carry out high-level managerial functions, or ‘otherwise exercis[e] important policy-making,
policy-determining, or other executive functions.’ §3132(a)(2) (emphasis added)’’).
67 The General Schedule, abbreviated ‘‘GS’’, is the basic pay schedule for employees of the Fed-
eral Government. See 5 U.S.C. sec. 5332 (2006).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00037 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 151
5. The administrative law context of the CDP ‘‘officer or
employee’’
Today the Federal Government employs a corps of about
5,000 hearing officers who adjudicate cases for dozens of its
agencies. Raymond Limon, Office of Admin. Law Judges,
Office of Pers. Mgmt., ‘‘The Federal Administrative Judiciary,
Then and Now, A Decade of Change 1992–2002’’, at 3 (Dec.
23, 2002). Fewer than a third of those positions are classified
as administrative law judges (ALJs) under the Administrative
Procedure Act (APA), and the remainder of those positions are
commonly referred to as non-ALJ hearing officers. 68 Over 80
percent of ALJs are currently employed by the Social Security
Administration (SSA). OPM Report (showing the SSA employed
1,128 of 1,388 ALJs in June 2008). None of the SSA’s ALJs are
appointed by the Commissioner of the SSA, who serves as the
department head. See Soc. Sec. Admin., ODAR Redelegations
of Personnel and Equal Employment Opportunity Authorities
(September 2006). Instead, the authority to appoint ALJs for
the SSA is delegated to the Deputy Commissioner for the
Office of Disability Adjudication and Review of the SSA. Id.
Therefore, the great majority of ALJs are not appointed
pursuant to the Appointments Clause.
ALJs are hired pursuant to 5 U.S.C. sec. 3105 (2006). An
agency may appoint an individual as an ALJ only after the
Office of Personnel Management certifies that individual as
eligible for the position. 5 C.F.R. sec. 930.204 (2008). The APA
generally requires that an ALJ preside over ‘‘every case of
adjudication required by statute to be determined on the
record after opportunity for an agency hearing’’. 5 U.S.C. sec.
554 (2006). If the adjudication is a so-called on the record
hearing, then the hearing is a ‘‘formal adjudication’’ that
must adhere to the formal hearing procedures of the APA,
which provide, inter alia, that each party is entitled to
present oral or documentary evidence, submit rebuttal evi-
dence, and conduct cross-examination. 5 U.S.C. secs. 554–
557. When presiding over an ‘‘on the record’’ hearing, ALJs
68 Id. at 1–4 (showing that the Federal Government employed 1,351 ALJs and 3,370 non-ALJ
hearing officers in 2002); see also Office of Pers. Mgmt., Federal Administrative Law Judges,
By Agency and Level, CDPF Status Report as of June 2008 (OPM Report) (showing the Federal
Government employed 1,388 ALJs in June 2008). Justice Breyer determined that there are cur-
rently 1,584 ALJs. See Free Enter. Fund v. PCAOB, 561 U.S. at ll, 130 S. Ct. at 3180–3181
(Breyer, J., dissenting).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00038 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
152 135 UNITED STATES TAX COURT REPORTS (114)
have the authority to require attendance at the hearing, to
administer oaths and affirmations, to issue subpoenas, to
rule on offers of proof and receive evidence, and to order
depositions. Id.
However, if the relevant statute does not require an ‘‘on
the record’’ hearing, then the formal hearing procedures of
the APA do not apply and a non-ALJ hearing officer may pre-
side over the adjudication. See id. Sections 6320 and 6330 do
not require an ‘‘on the record’’ CDP hearing, see Davis v.
Commissioner, 115 T.C. 41–42 (citing 26 C.F.R. sec.
601.106(c), Statement of Procedural Rules); and thus even
apart from section 6330(b)(3) (allowing a CDP hearing before
‘‘an officer or employee’’), APA procedures would not require
the IRS to use ALJs to conduct CDP hearings. Therefore, the
appeals officer who conducts and adjudicates a CDP hearing
is more comparable to a non-ALJ hearing officer than to an
ALJ.
The CDP hearing officer, hired and not constitutionally
‘‘appointed’’, is by no means unique in the context of adminis-
trative adjudication.
III. The status of the CDP ‘‘officer or employee’’ and ‘‘appeals
officer’’ under the Appointments Clause
In order to determine whether the ‘‘officer or employee’’ (or
the ‘‘appeals officer’’) of section 6330 is an ‘‘inferior Officer’’
who must be appointed in compliance with the Appointments
Clause, we consider the two issues prompted by the text of
the clause.
A. Whether the position is ‘‘established by Law’’
‘‘[T]he threshold trigger for the Appointments Clause’’ is
that an office be ‘‘ ‘established by Law’ ’’. Landry v. FDIC, 204
F.3d at 1133. We hold that there is no CDP hearing officer
position ‘‘established by Law’’ under sections 6320 and 6330
whose incumbent could be an officer subject to the Appoint-
ments Clause.
1. Creation by statute
Where ‘‘the ‘duties, salary, and means of appointment’ for
the office were specified by statute’’, that is considered ‘‘a
factor that has proved relevant in the [Supreme] Court’s
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00039 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 153
Appointments Clause jurisprudence.’’ Id. (quoting Freytag v.
Commissioner, 501 U.S. at 881). If there were a statutory
provision to the effect that ‘‘There shall be, within the
Internal Revenue Service Office of Appeals, officers des-
ignated as Appeals Officers, who shall conduct CDP hearings’’,
etc., then that would be some indication that the Appeals
Officer position was ‘‘established by Law’’. There is no such
statute, and this lack is some indication that the position in
question is not an office ‘‘established by Law’’.
The IRS Office of Appeals was not, in its current form, ini-
tially created by the Internal Revenue Code, 69 nor were its
‘‘Appeals Officers’’. Congress did explicitly ‘‘establish’’ in the
Internal Revenue Code certain officers who are to be
appointed by the President, with the advice and consent of
the Senate—i.e., the Commissioner, sec. 7803(a)(1), the Chief
Counsel, sec. 7803(b)(1), and members of the Internal Rev-
enue Service Oversight Board, sec. 7802(b)(1)—and the
National Taxpayer Advocate (sec. 7803(c)(1)), who is
appointed by the Secretary of the Treasury. 70 Otherwise, the
employment of ‘‘Other Personnel’’ is authorized in Section
7804(a), which, as we noted above, simply provides that ‘‘the
Commissioner of Internal Revenue is authorized to employ
such number of persons as the Commissioner deems proper’’.
Congress thus left to the Executive Branch almost the entire
personnel structure of the IRS and refrained from estab-
lishing other particular offices within it.
As is shown above in part II.B, it was the Executive
Branch that created the IRS Office of Appeals and its per-
sonnel structure, pursuant to that authority in section
7804(a). When Congress enacted in 1998 the CDP provisions
in sections 6320 and 6330, it employed that pre-existing
Office of Appeals and committed the new CDP function to that
office. Secs. 6320(b)(1), 6330(b)(1), (d)(2). Mr. Tucker con-
tends that the RRA established the pre-existing Appeals
Officer position as the CDP hearing officer. The statute does
69 Although the Office of Appeals was originally a creature of regulation, the multiple ref-
erences to it that were added to the Code in 1998, see part II.B above, make it at least arguable
that the Office of Appeals is now required by statute. However, there is no constitutional issue
as to whether the Office of Appeals itself was ‘‘establish[ed] by Law’’; rather, the issue is wheth-
er there are, within the Office of Appeals, personnel who are ‘‘officers’’ whose positions are ‘‘es-
tablished by Law’’.
70 The National Taxpayer Advocate’s predecessor, the Taxpayer Advocate, was appointed by
the Commissioner of Internal Revenue, pursuant to former section 7802(d)(1).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00040 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
154 135 UNITED STATES TAX COURT REPORTS (114)
refer to an ‘‘appeals officer’’ as the person who ‘‘obtain[s]
verification * * * that the requirements of any applicable
law or administrative procedure have been met’’, sec.
6330(c)(1), and who makes the ‘‘determination’’ whether to
proceed with collection, sec. 6330(c)(3). However, for the fol-
lowing reasons we conclude that section 6330 uses the term
‘‘appeals officer’’ interchangeably with the term ‘‘officer or
employee’’:
First, the provisions in the lien statute, section 6320(b)(3),
and in the levy statute, section 6330(b)(3), that actually state
who shall conduct the hearing state that ‘‘the hearing * * *
shall be conducted by an officer or employee who has had no
prior involvement with respect to the unpaid tax’’. (Emphasis
added.) This is the first and only mention of an individual in
the lien statute and the first mention of an individual in the
levy statute. The caption of each paragraph is ‘‘Impartial
officer’’, thereby explicitly indicating that it might be an
‘‘officer or employee’’ who serves as the ‘‘Impartial officer’’.
(Emphasis added.) This shows that Congress did not use the
term ‘‘officer’’ in any specialized sense. The phrase ‘‘or
employee’’ is so contrary to Mr. Tucker’s position that he is
forced to declare the phrase ‘‘mere surplusage’’. However, we
decline to read words out of the statute; rather, we attempt
to give meaning to every word that Congress enacted, and
here that is best accomplished by taking at face value the
phrase ‘‘officer or employee’’ in sections 6320(b)(3) and
6330(b)(3) (emphasis added), and by understanding the
phrase ‘‘appeals officer’’ in section 6330(c)(1) and (3) as short-
hand for an officer or employee in the Office of Appeals. If
Congress had intended to assign CDP duty to a particular
rank of ‘‘Appeals Officer’’, it would not have added the phrase
‘‘or employee’’; and it could have used language like that
which it used simultaneously in RRA section 3105 where it
provided that a bond issuer could appeal an adverse ruling
‘‘to a senior officer of the Internal Revenue Service Office of
Appeals’’. (Emphasis added.)
Second, the conference report describing the provision does
on one occasion use the designation ‘‘appeals officer’’ but
almost immediately thereafter uses the designation ‘‘appel-
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00041 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 155
late officer’’. H. Conf. Rept. 105–599, at 264 (1998), 1998–3
C.B. 747, 1018 (emphasis added). 71
Neither the statute itself nor the legislative history shows
that Congress intended to ascribe any particular importance
or significance to the term ‘‘appeals officer’’. We hold that, for
purposes of section 6330(c)(1) and (3), an ‘‘appeals officer’’ is
any ‘‘officer or employee’’ in the IRS Office of Appeals to
whom is assigned the task of conducting a CDP hearing under
section 6330(b)(3). 72
The statute thus does not create any positions for the per-
sonnel who would perform the CDP function but rather refers
to them in a most diffuse manner (‘‘conducted by an officer
or employee’’). After the enactment of this statute, it was not
possible to point to a position responsible for conducting CDP
hearings and to question whether the person in that position
was an ‘‘inferior Officer’’; instead the hearings would be con-
ducted by ‘‘employees’’ yet to be designated, from time to
time, within the Office of Appeals. 73 Thus, the mere mention
of an ‘‘officer or employee’’ or an ‘‘appeals officer’’ in sections
6320 and 6330 presumes but does not establish any posi-
tion. 74 In addition to sections 6320 and 6330, however, Mr.
Tucker points to a reference to ‘‘appeals officer’’ in a provi-
sion of the RRA that has not been codified in the Code. 75 RRA
section 3465(b), 112 Stat. 768, 1998–3 C.B. 228, provides:
The Commissioner of Internal Revenue shall ensure that an appeals officer
is regularly available in each State. [Emphasis added.]
71 See also S. Rept. 105–174, at 68 (1998), 1998–3 C.B. 537, 604 (‘‘The determination of the
appeals officer’’; ‘‘the determination of the appellate officer’’; ‘‘the appellate officer’s determina-
tion’’ (emphasis added)).
72 See Powers v. Commissioner, T.C. Memo. 2009–229; Reynolds v. Commissioner, T.C. Memo.
2006–192.
73 Mr. Tucker sets out an elaborate hypothetical circumstance, intended to show the impor-
tance of appeals officers, in which an appeals officer could end up holding jurisdiction over the
three major U.S. car manufacturers and thereby ‘‘effectively become the United States ‘Car
Czar’ ’’; ‘‘she could effectively end the United States domestic automobile industry’’; ‘‘She could
be in charge of the companies’ fates for years’’. Among the reasons that we are not influenced
by this possibility is that it is the Office of Appeals, and not an individual officer or employee,
that retains jurisdiction under section 6330(d)(2).
74 The mere mention of an office in the Code evidently does not establish that office or guar-
antee its continuance. Other administratively created IRS positions have been mentioned from
time to time in sections of the Code but have thereafter been abolished by agency restructuring
and their functions delegated to other personnel. See, e.g., sec. 6334(e)(2)(A) (mentioning ‘‘dis-
trict director’’); sec. 7611(b)(3)(C) (mentioning ‘‘regional commissioner’’).
75 For the two other uncodified references to ‘‘appeals officers’’ in the RRA, see supra note 52.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00042 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
156 135 UNITED STATES TAX COURT REPORTS (114)
This provision, however, has little to do with the CDP hearing
or its presiding ‘‘officer or employee’’. (Emphasis added.) The
statute certainly does not establish (or even imply) a CDP
hearing officer ‘‘in each State’’. That is, even if the statute
were read to mean that ‘‘There shall be, and is hereby estab-
lished, an IRS official known as ‘Appeals Officer’ in each
State’’, Congress would not, by creating such an official,
establish a CDP hearing officer, as Mr. Tucker’s argument
would require. Whatever that ‘‘appeals officer * * * in each
state’’ might be tasked with doing, Congress made clear in
sections 6320(b)(3) and 6330(b)(3) that a CDP hearing can be
staffed by an ‘‘officer or employee’’. (Emphasis added.)
We therefore hold that the RRA did not establish the posi-
tion of a CDP ‘‘appeals officer’’.
2. Creation by regulation
However, Mr. Tucker contends, in effect, that proper
Appointments Clause analysis must consider both statute
and regulations. We therefore consider whether an office
might be ‘‘established’’ by the RRA taken together with the
regime for the Office of Appeals that is established in the
regulations. It is true that the case law does not posit a
bright-line rule that would require an explicit statutory cre-
ation of an office before there can be an ‘‘officer’’ for purposes
of the Appointments Clause. Opinions of the Courts of
Appeals for the Third, Fifth, and Sixth Circuits seem to tend
to the contrary: 76
The Administrative Review Board (ARB) of the Department
of Labor, composed of three ‘‘members’’ appointed by the Sec-
retary of Labor, ‘‘ ‘issu[es] final agency decisions on questions
of law and fact arising in review or on appeal’ in whistle-
blower cases.’’ Willy v. Admin. Review Bd., 423 F.3d 483, 491
(5th Cir. 2005) (quoting 61 Fed. Reg. 19978 (May 3, 1996)).
The ARB was created not by statute but by an order of the
Secretary of Labor, pursuant to 5 U.S.C. sec. 301 (2006),
which provides that ‘‘[t]he head of an Executive department
76 In Free Enter. Fund v. PCAOB, 561 U.S. at ll, 130 S. Ct. at 3179 (Breyer, J., dissenting),
Justice Breyer asserts explicitly that an ‘‘office’’ can be ‘‘created either by ‘regulations’ or by
‘statute,’ ’’ for which he cites United States v. Mouat, 124 U.S. 303, 307–308 (1888) (‘‘there is
no statute authorizing the secretary of the navy to appoint a pay-master’s clerk, nor is there
any act requiring his approval of such an appointment, and the regulations of the navy do not
seem to require any such appointment or approval for the holding of that position. The claimant,
therefore, was not an officer’’ (emphasis added)).
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00043 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 157
* * * may prescribe regulations for the government of his
department, the conduct of its employees, [and] the distribu-
tion and performance of its business’’. Both the Courts of
Appeals for the Fifth Circuit, see Willy v. Admin. Review Bd.,
423 F.3d at 491–492, and the Sixth Circuit, see Holtzclaw v.
Sec. of Labor, 172 F.3d 872 (6th Cir. 1999); Varnadore v. Sec.
of Labor, 141 F.3d 625, 631 (6th Cir. 1998), approved the cre-
ation of the ARB as being within the general authority
granted to the Secretary of Labor under 5 U.S.C. sec. 301
(2006), analyzed the position of member on the ARB under
the Appointments Clause and found it to be an ‘‘inferior
Officer’’, and held that Congress, by 5 U.S.C. sec. 301, had
authorized the Secretary to make the appointments, which
satisfied the requirements of the Appointments Clause.
Similarly, the Appeals Board of the Department of Health
and Human Services (HHS), composed of members appointed
by the Secretary of HHS, resolves disputes under the Child
Support Enforcement Act, 42 U.S.C. secs. 651–669(b) (2006).
Pennsylvania v. HHS, 80 F.3d 796, 800 (3d Cir. 1996). The
Appeals Board was created not by statute but by regulation,
45 C.F.R. pt. 16 (1981), promulgated by the Secretary of HHS,
pursuant to 42 U.S.C. sec. 913 (2006), which provides: ‘‘The
Secretary is authorized to appoint and fix the compensation
of such officers and employees, and to make such expendi-
tures as may be necessary for carrying out the functions of
the Secretary under this chapter.’’ The Court of Appeals for
the Third Circuit approved the creation of the Appeals Board
as being within the general authority granted to the Sec-
retary of HHS under 42 U.S.C. sec. 913, analyzed the position
of member on the Appeals Board under the Appointments
Clause and found it to be an ‘‘inferior Officer’’, and held that
Congress, by 42 U.S.C. sec. 913, had authorized the Sec-
retary to make the appointments, which satisfied the
requirements of the Appointments Clause. Pennsylvania v.
HHS, supra at 804–805.
None of these opinions suggests that any party had argued
that the positions under review were not ‘‘established by
Law’’. Rather, the parties and the courts seem to have
assumed that if the positions existed, then the positions were
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00044 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
158 135 UNITED STATES TAX COURT REPORTS (114)
‘‘established by Law’’. 77 If this assumption is correct, then it
would seem that any ‘‘Office’’ that actually exists in the Fed-
eral Government is arguably ‘‘established by Law’’.
The Supreme Court has not so held, and the assumption
is problematic, in that it risks reading out of the Constitution
the phrase ‘‘established by Law’’, if the Appointments Clause
would mean the same thing with or without that phrase. One
could argue instead that only a position created by a statute
can be ‘‘established by Law’’ for purposes of the Appoint-
ments Clause. If a position is created not by Congress but by
the Executive, then by definition there is no possibility that
Congress both created and filled that position, which is the
chief danger against which the clause is a safeguard.
However, if the phrase ‘‘established by Law’’ were con-
strued to mean that the Appointments Clause can apply only
to a position expressly created by a statute, then abuses
could arise. For example, Congress could take a pre-existing
low-level position (which had been created by the Executive
Branch pursuant to a general authorization like section
7804(a), and which was not subject to appointment by the
President or a Head of a Department) and could invest it
with significant additional power, thus evading the Appoint-
ments Clause by seeming to avoid ‘‘establishing’’ the office. 78
Where such a pattern existed, the courts would have to see
through the subterfuge and enforce the Appointments
Clause. Mr. Tucker argues that the CDP provisions involve
just this problem—i.e., that Congress took the existing
Appeals Officer position and invested it with the ‘‘significant
authority’’ (discussed below in part II.B.2) of the CDP process.
The argument fails, however, because Congress has
assigned the CDP hearing function not to a particular rank or
title of ‘‘Appeals Officer’’ nor to any other identifiable office-
holder but generally to the Office of Appeals and, within it,
to any ‘‘officer or employee’’, secs. 6320(b)(3), 6330(b)(3), from
among the ‘‘number of persons’’ who are employed in that
77 For a defense of this position, see Stephen G. Bradbury, ‘‘Officers of the United States With-
in the Meaning of the Appointments Clause’’, 31 Op. Off. Legal Counsel, at *36–38, 2007 OLC
LEXIS 3, *117–123 (Apr. 16, 2007).
78 An analogous abuse via ‘‘indirection’’ was hypothesized in Springer v. Govt. of the Philippine
Islands, 277 U.S. 189, 202 (1928), when the Court stated: ‘‘the legislature cannot ingraft execu-
tive duties upon a legislative office, since that would be to usurp the power of appointment by
indirection’’. The Court did go on to observe that ‘‘the case might be different if the additional
duties were devolved upon an appointee of the executive’’, id., but it did not elaborate on this
scenario.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00045 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 159
Office ‘‘as the Commissioner deems proper for the adminis-
tration and enforcement of the internal revenue laws’’, sec.
7804(a). Likewise, even under the regulations the CDP
responsibility does not inhere in any specific office or posi-
tion. Pursuant to the administrative arrangements of the
Office of Appeals, 250 employees are designated to perform
that CDP function, but it is within the agency’s authority
under section 6330 to allocate the function as it will among
its 1,100 settlement officers and Appeals Officers. The
Appointments Clause applies only when an office is ‘‘estab-
lished by Law’’, but there is no office established by statute
or regulation to which Congress committed the CDP function.
B. Whether the CDP function could constitute an ‘‘office’’
If, however, a position is ‘‘established by Law’’, the second
question in an Appointments Clause inquiry is whether that
position constitutes an office of the United States. Only
‘‘offices’’ are subject to the requirements of the clause, and
not every position that is ‘‘established by Law’’ is an office. 79
See Freytag v. Commissioner, 501 U.S. at 880–881. Assuming
arguendo that the CDP function prescribed under sections
6320 and 6330 and the regulations thereunder is committed
to a position ‘‘established by Law’’, we must determine
whether that position could constitute an ‘‘office’’.
The Supreme Court has articulated two essential
characteristics that a position must have in order to con-
stitute an office: A position is an office if (i) it is invested
with ‘‘significant authority pursuant to the laws of the
United States’’, Buckley v. Valeo, 424 U.S. at 126, and (ii) it
is ‘‘continuing’’, Auffmordt v. Hedden, 137 U.S. 310, 326–328
(1890); United States v. Germaine, 99 U.S. at 511–512;
79 The requirements of the Appointments Clause are not implicated unless an ‘‘office’’ exists.
Freytag v. Commissioner, 501 U.S. at 880 (citing Buckley v. Valeo,
424 U.S. 1, 126 n.162 (1976)).
Even if the position of a non-officer employee is clearly established by law, i.e., ‘‘the duties, sal-
ary, and means of appointment * * * are specified by statute’’, id., at 881, appointments to that
position need not conform to the Appointments Clause, id. at 880–881. In Freytag, the Supreme
Court noted that the position of Special Trial Judge on this Court is ‘‘established by Law’’, but
nonetheless stated that Special Trial Judges ‘‘need not be selected in compliance with the strict
requirements of [the clause]’’ ‘‘if we * * * conclude that a special trial judge is only an em-
ployee’’. Id. Likewise, in Landry v. FDIC,
204 F.3d 1125, 1133–1134 (D.C. Cir. 2000), the Court
of Appeals for the District of Columbia Circuit noted that the position of ALJ for the Federal
Deposit Insurance Corporation is ‘‘established by Law’’, but held that the position does not con-
stitute an office. Moreover, the history of internal revenue collection in the United States is re-
plete with officials whose positions were specified by statute, but were not appointed pursuant
to the requirements of the clause. See supra pt. II.C.2.c.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00046 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
160 135 UNITED STATES TAX COURT REPORTS (114)
United States v. Hartwell, 73 U.S. 385, 393 (1868). Whether
a position possesses these characteristics and thus con-
stitutes an office ‘‘is determined by the manner in which
Congress has specifically provided for the creation of the sev-
eral positions, their duties and appointment thereto.’’ Burnap
v. United States, 252 U.S. 512, 516 (1920). Therefore, we
examine the specific features of the ‘‘officer or employee’’
position within the CDP function to determine whether it is
a ‘‘continuing’’ office invested with ‘‘significant authority’’.
1. Whether the CDP provisions created a ‘‘continuing’’
position
A position is ‘‘continuing’’ if it possesses ‘‘ ‘tenure, duration,
emolument, and duties’ ’’ that are ‘‘ ‘continuing and perma-
nent, not occasional or temporary.’ ’’ Auffmordt v. Hedden,
supra at 327 (quoting United States v. Germaine, supra at
511–512). A position is most clearly ‘‘continuing’’ if it is
permanently assigned sovereign authority that does not
expire, inter alia, upon the passage of time or the completion
of a discrete task. See Auffmordt v. Hedden, supra at 326–
328; United States v. Germaine, supra at 511–512; United
States v. Hartwell, supra at 393. Respondent concedes that,
if the CDP ‘‘appeals officer’’ is a position ‘‘established by Law’’,
then it is a ‘‘continuing’’ position; and we therefore proceed
to consider whether that position is given ‘‘significant
authority’’, so that the person holding that position would be
an officer (i.e., an ‘‘inferior Officer’’) rather than a non-officer
employee.
2. Whether the CDP hearing officer has ‘‘significant
authority’’
In Buckley v. Valeo, supra at 126, the Supreme Court held
that a position invested with ‘‘significant authority’’ is an
office:
We think that the term ‘‘Officers of the United States’’ as used in Art. II,
defined to include ‘‘all persons who can be said to hold an office under the
government’’ in United States v. Germaine, supra, is a term intended to
have substantive meaning. We think its fair import is that any appointee
exercising significant authority pursuant to the laws of the United States
is an ‘‘Officer of the United States,’’ and must, therefore, be appointed in
the manner prescribed by § 2, cl. 2, of that Article.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00047 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 161
In that case the Supreme Court examined the powers of the
eight-member Federal Election Commission (FEC) established
under the Federal Election Campaign Act of 1971 (1971 Act),
Pub. L. 92–225, 86 Stat. 3, as amended by the Federal Elec-
tion Campaign Act Amendments of 1974, Pub. L. 93–443, 88
Stat. 1263. Id. at 137–141. The Supreme Court concluded
that none of the FEC’s commissioners were appointed in con-
formity with the clause, and thus, none of them were con-
stitutionally permitted to exercise ‘‘significant authority’’. Id.
at 137. It then sorted the FEC’s statutorily authorized powers
into three categories in order to determine whether the
powers in each category constituted significant authority:
[T]he Commission’s powers fall generally into three categories: functions
relating to the flow of necessary information—receipt, dissemination, and
investigation; functions with respect to the Commission’s task of fleshing
out the statute—rulemaking and advisory opinions; and functions nec-
essary to ensure compliance with the statute and rules—informal proce-
dures, administrative determinations and hearings, and civil suits. [Id.]
The Supreme Court held that it was constitutionally permis-
sible for the unappointed commissioners to exercise their
investigatory and informative powers, because in so doing
they were merely aiding Congress in performing its legisla-
tive function. Id. at 137–138. Since Congress could delegate
those powers to its own committees, the Supreme Court
stated ‘‘there can be no question’’ that Congress could dele-
gate them to the FEC by statute. Id.
However, the Supreme Court held that it was not permis-
sible for the unappointed commissioners to exercise their
‘‘more substantial [enforcement and interpretive] powers’’. Id.
at 138. First, the Supreme Court held that only ‘‘Officers of
the United States’’ could exercise the commissioners’ power
to bring suit to enforce the 1971 Act, because that power ‘‘is
the ultimate remedy for a breach of the law’’ and belongs to
the Executive—not Legislative—Branch. Id. at 138–140.
Second, the Supreme Court held that only ‘‘Officers of the
United States’’ could exercise the commissioners’ power to
interpret the entire 1971 Act through rulemaking, advisory
opinions, and determinations—without supervision from
either Congress or the Executive Branch—because that
power ‘‘represents the performance of a significant govern-
mental duty exercised pursuant to a public law.’’ Id. at 140–
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00048 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
162 135 UNITED STATES TAX COURT REPORTS (114)
141. From Buckley we therefore draw the general principle
that only an ‘‘officer’’ may perform ‘‘significant’’ enforcement
and interpretive functions. See id. at 124–141. In particular,
the powers (i) to bring suit to enforce an Act of Congress and
(ii) to issue regulations, advisory opinions, and determina-
tions without supervision under an Act of Congress both con-
stitute ‘‘significant authority’’.
The Supreme Court has yet to fully define the term
‘‘significant authority’’; 80 and ‘‘ascertaining the test’s real
meaning requires a look at the roles of the employees whose
status was at issue in other cases.’’ Landry v. FDIC, 204 F.3d
at 1133. In the two cases most analogous to our facts, the
Supreme Court in Freytag and the Court of Appeals for the
District of Columbia Circuit in Landry analyzed whether dif-
ferent adjudicative positions constituted ‘‘offices’’. In Freytag
the Supreme Court faced the question whether a Special
Trial Judge (STJ) of the Tax Court is an ‘‘inferior Officer’’;
and it observed that in some matters the STJ will ‘‘only hear
the case and prepare proposed findings and an opinion’’ while
in other matters the STJ may be assigned ‘‘not only to hear
and report on a case but to decide it’’. Freytag v. Commis-
sioner, 501 U.S. at 873. In deciding that STJs are ‘‘inferior
Officers’’, the Supreme Court relied on the authority of STJs
to render the final decision of this Court in some of the mat-
ters that come before them. See id. at 882.
In contrast, in Landry v. FDIC, supra at 1134, the Court
of Appeals decided that ALJs for the Federal Deposit Insur-
ance Corporation (FDIC) are not inferior officers. Both the
ALJs in Landry and the STJs on this Court ‘‘ ‘take testimony,
conduct trials, rule on the admissibility of evidence, and have
the power to enforce compliance with discovery orders.’ ’’ Id.
80 While ‘‘significant authority’’ is an essential characteristic of an ‘‘office’’, Buckley v.
Valeo,
424 U.S. at 126, this proposition cannot be construed to mean that non-officer employees of the
Federal Government are insignificant or trivial. Mr. Tucker suggests that treating ‘‘appeals offi-
cers’’ as non-officer employees not subject to the Appointments Clause is to regard them as ‘‘un-
important’’. We disagree. For example, military ranks reflect the same distinction between offi-
cers who are appointed in compliance with the Appointments Clause, see 10 U.S.C. secs. 531,
571, 624 (2006), and non-officers who are not. However, those non-officers include ‘‘noncommis-
sioned officers’’ (sergeants, corporals, and petty officers) who are promoted (not appointed) from
among enlisted personnel. See, e.g., Army Regulation 600–8–19 (‘‘Enlisted Promotions and Re-
ductions’’), ch. 3 (‘‘Semicentralized Promotions (Sergeant and Staff Sergeant)’’), sec. 3.1. No one
could reasonably call the role of noncommissioned officers ‘‘insignificant’’. They have command
of the enlisted personnel under them, and insubordination or disobedience of their commands
is punishable by court-martial. See 10 U.S.C. sec. 891 (2006). Thus, the issue here is not wheth-
er appeals officers are unimportant, but whether they are ‘‘Officers of the United States’’.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00049 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 163
(quoting Freytag v. Commissioner, 501 U.S. at 881–882).
However, unlike the STJs, the ALJs lacked the power to make
final decisions. Id. at 1133. Instead, ALJs file a recommended
decision, 12 C.F.R. sec. 308.38 (1996), which the FDIC’s board
of directors reviews de novo before it issues the final decision
of the agency, id. sec. 308.40(a), (c). This lack of finality led
the Court of Appeals to conclude that the ALJs in question
are not officers. Landry v. FDIC, supra at 1134.
This focus in Landry on final decision-making power is an
appropriate application of the Supreme Court’s earlier anal-
ysis of the FEC’s interpretive powers in Buckley v. Valeo, 424
U.S. at 140–141, which held that the power to interpret the
1971 Act ‘‘free from day-to-day supervision of either Congress
or the Executive Branch’’ constitutes significant authority.
The power to make a final decision, which the Supreme
Court described as ‘‘independent authority’’ in Freytag v.
Commissioner, supra at 882, is a species of the power to act
without supervision. See Buckley v. Valeo, supra at 141.
Therefore, a position that is invested with broad adjudicative
powers, like the position of STJ, may be an office if the
incumbent can act free of supervision or has the final say
within the agency. See Freytag v. Commissioner, supra at
882. However, such a position is not an office if the incum-
bent and her determinations are subject to supervision. See
Landry v. FDIC, supra at 1133–1134.
Mr. Tucker and the amicus contend that the positions of
settlement officer and team manager within the Office of
Appeals are invested with ‘‘significant authority’’. In par-
ticular, Mr. Tucker posits that ‘‘Settlement Officers, and/or
Appeals team managers holding CDP hearings are so similar
to Special Trial Judges in all ways that mattered to the
Supreme Court in its Freytag Appointments Clause analysis
that any differences are not of Constitutional significance.’’
We disagree.
While settlement officers, appeals officers, and team man-
agers can be said to possess adjudicative powers to conduct
hearings and to issue determinations to resolve those
hearings, none possess the power to make final decisions for
the IRS. Contrary to Mr. Tucker’s assertion that ‘‘[n]otices of
determination issued by Appeals personnel after CDP
hearings are final and binding on the IRS’’, determinations by
settlement officers and Appeals team managers are not
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00050 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
164 135 UNITED STATES TAX COURT REPORTS (114)
‘‘final’’ in the sense that is relevant to the Appointments
Clause. They review only a particular collection episode—a
given notice of lien or notice of proposed levy. As is discussed
above in part II.C.3.a, in the absence of a written agreement
with the taxpayer, the Office of Appeals (not the appeals
officer) retains jurisdiction to reconsider and overturn its
personnel’s determinations with respect to collection action.
Sec. 6330(d)(2). If Mr. Tucker’s circumstances were to
change, and it became clear that he could never repay the
IRS, nothing would prevent collection personnel from
relenting or prevent the Office of Appeals from holding a
supplemental CDP hearing and revising its personnel’s prior
determination to uphold the tax lien.
Even determinations with respect to underlying liability by
the personnel of the Office of Appeals are not binding on the
IRS and may be overturned during audit reconsideration or
overruled by the IRS Office of Chief Counsel in taking litiga-
tion positions or settling cases. See supra part II.C.3.b. The
Office of Chief Counsel, not the Office of Appeals, has
authority to ‘‘[n]egotiate or make a settlement in any case
docketed in the Tax Court if the * * * determination was
issued by Appeals officials’’. 26 C.F.R. sec. 601.106(a)(2)(i),
Statement of Procedural Rules. Here, the Office of Chief
Counsel was free to contest or settle Mr. Tucker’s case, not-
withstanding the team manager’s determinations to uphold
the tax lien at issue.
No position within the Office of Appeals is invested, in the
CDP context, with the ‘‘final’’ decision-making power that may
be exercised only by an ‘‘officer of the United States’’. For
that reason, settlement officers, appeals officers, and team
managers are more analogous to the ALJs in Landry than to
the STJs in Freytag.
Moreover, non-officer ALJs have the authority to conduct
‘‘on the record’’ hearings, to require attendance at those
hearings, to administer oaths and affirmations, to issue sub-
poenas, to rule on offers of proof and receive evidence, and
to order depositions. 5 U.S.C. secs. 554–557. Despite this
authority, the Court of Appeals for the District of Columbia
Circuit held that the ALJs in Landry are not officers because
they lack final decision-making power. Landry v. FDIC, 204
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00051 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
(114) TUCKER v. COMMISSIONER 165
F.3d at 1133–1134. 81 In contrast, settlement officers, appeals
officers, and team managers lack not only final decision-
making power but also these formal powers granted to ALJs
under the Administrative Procedure Act. See 26 C.F.R. sec.
301.6330–1(d)(2), Q&A–D6, Proced. & Admin. Regs. CDP
hearings are ‘‘informal in nature’’ and do not even require a
face-to-face meeting. Id.
Since we find persuasive the reasoning of the Court of
Appeals for the District of Columbia Circuit in its determina-
tion that ALJs for the FDIC do not exercise ‘‘significant
authority’’, we hold that the lesser position of CDP ‘‘appeals
officer’’ (‘‘or employee’’) within the Office of Appeals likewise
does not exercise ‘‘significant authority’’. We therefore hold
that the positions of settlement officer, appeals officer, and
team manager are not invested with ‘‘significant authority’’
under Buckley v. Valeo, 424 U.S. at 126.
Conclusion
An ‘‘officer or employee’’ of the IRS Office of Appeals who
conducts CDP hearings has neither a position ‘‘established by
Law’’ nor ‘‘significant authority’’ that is characteristic of an
‘‘officer of the United States’’ for purposes of the Appoint-
ments Clause. Without at all minimizing the importance of
conducting a CDP hearing, that function does not involve an
authority more ‘‘significant’’ than the authority exercised by
other personnel important to tax administration (whether the
Chief of the Office of Appeals (their superior), other high-
ranking officials in the IRS, or many internal revenue collec-
tion personnel over the past 200 years) or as significant as
the authority exercised by ALJs in many other agencies. To
survey these thousands of employees important to the
administration of law and single out IRS ‘‘appeals officers’’ as
81 The status of ALJs as employees or ‘‘Officers of the United States’’ is ‘‘disputed’’. Free Enter.
Fund v. PCAOB, 516 U.S. at ll n.10, 130 S. Ct. at 3160 (citing Landry v. FDIC,
204 F.3d
1125 (D.C. Cir. 2000)). In Landry a divided panel of the Court of Appeals for the D.C. Circuit
held that ALJs for the FDIC are not officers. However, in Free Enter. Fund v. PCAOB, dis-
senting Justice Breyer apparently indicates that he would hold that all ALJs are officers. 516
U.S. at ll, 130 S. Ct. at 3180 (Breyer, J., dissenting) (citing Freytag v.
Commissioner, 501
U.S. at 910 (Scalia, J., concurring in part and concurring in judgment)). No court has held con-
trary to Landry, and we follow it. However, even assuming arguendo that ALJs are ‘‘Officers
of the United States’’, it does not follow that CDP hearing officers are likewise ‘‘officers’’. CDP
hearing officers lack not only final decision-making power but also the formal powers granted
to ALJs. Whether or not the position of ALJ constitutes an ‘‘Office[ ] of the United States’’, the
lesser position of CDP ‘‘appeals officer’’ is not an ‘‘office’’.
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00052 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
166 135 UNITED STATES TAX COURT REPORTS (114)
somehow requiring constitutional appointment would be
unwarranted. They are instead properly hired, pursuant to
section 7804(a), under the authority of the Commissioner of
Internal Revenue.
To reflect the foregoing,
An appropriate order will be issued.
f
VerDate 0ct 09 2002 10:50 May 29, 2013 Jkt 372897 PO 20009 Frm 00053 Fmt 3851 Sfmt 3851 V:\FILES\TUCKER.135 SHEILA
