2d Circuit Holds Tax Court Is Real "Court," Not IRS Lap Dog

The Second Circuit held yesterday that the Tax Court is a "court" for purposes of the Freedom of Information Act.  The taxpayer had argued that the Tax Court defers to the IRS so much that it should be considered an extension of the IRS, rather than a court.  The district court in Megibow v. Clerk, United States Tax Court, 2004 U.S. Dist. LEXIS 17698 (S.D.N.Y. 2004), had rejected this argument:

Finally, contrary to an argument at least implied in Megibow's brief, whether the Tax Court is a court or an agency for purposes of FOIA is not a question of fact that must await the receipt of evidence establishing "how the Tax Court behaves." Nor is the Court's conclusion dependent on whether it agrees with Megibow's contention that the Tax Court defers unreasonably to positions taken by the Internal Revenue Service ("IRS"). The status of the Tax Court is a question of law that depends on statutory interpretation. Even were Megibow correct that the Tax Court is so biased that it operates in practice as a de facto extension of the IRS, that would suggest only that the Tax Court is a bad court. But bias, or even corruption, does not transform an adjudicative body into an executive or administrative agency for FOIA purposes. The status of a governmental body under FOIA turns on its nature, structure and functions, not on whether Megibow -- or, for that matter, this Court -- thinks it is doing a good job.

N.10:  Needless to say, the Court does not express or intend to imply any view on Megibow's criticisms of the Tax Court. It simply notes that those criticisms, meritorious or not, do not bear on the issue before the Court.

The Second Circuit yesterday affirmed in Megibow v. Clerk, United States Tax Court, No. 04-6204-cv (2d Cir. Dec. 21, 2005):

This appeal presents the issue of whether the United States Tax Court (“Tax Court”), established by the Tax Reform Act of 1969, 26 U.S.C. § 7441, is subject to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552 — or whether it qualifies as a court of the United States, and is therefore expressly outside the ambit of FOIA. See 5 U.S.C. § 551(1)(B) (excluding from FOIA “the courts of the United States”). The question is one of first instance, and heretofore has not been addressed by us. The district court below (Lynch, J.), in a thorough and well-reasoned opinion concluded that the Tax Court is, in fact, a court for the purposes of FOIA. Accordingly, it held that FOIA could not be applied to the Tax Court. We affirm for the reasons given by the district court.

In a footnote, the Second Circuit stated:

Among the federal courts, only the District Court of Montana has previously considered the issue. It concluded, as we do, that the Tax Court is not subject to FOIA, and the Ninth Circuit affirmed the decision in an unpublished summary order. See Ostheimer v. Chumbley, 498 F. Supp. 890, 892 (D. Mont. 1980), aff’d, 746 F.2d 1487 (9th Cir. 1984).

Hat Tip: Howard Bashman, who noted:

U.S. Court of Appeals for the Second Circuit holds that U.S. Tax Court is a court: Is there no end to judicial activism in this country? Next thing you know, some U.S. Court of Appeals will hold that the U.S. Tax Court has something to do with the adjudication of tax-related disputes.