On February 25, President Biden announced that he had selected D.C. Circuit Court Judge Ketanji Brown Jackson to be his nominee for the U.S. Supreme Court seat being vacated by Justice Stephen Breyer. Judge Jackson has served on the D.C. Circuit for less than a year, but prior to that served as a federal district court judge from 2013 to 2021. She previously served as an assistant public defender in Washington, D.C., an appeals attorney at a prestigious law firm, and vice chair of the U.S. Sentencing Commission.
As Judge Jackson’s confirmation process begins, we reviewed her past opinions to gauge her views on important taxpayer issues that may come before the Supreme Court in the near future, such as the ability of the Internal Revenue Service (IRS) and state tax agencies to block taxpayers from having their day in court, whether the benefit of the doubt in disputes should go to tax agencies or to taxpayers, and generally the ability of taxpayers to challenge abusive IRS practices.
Judge Jackson has confronted some of these issues as a judge, although it is important to note that lower court judges are considered more bound to follow precedent than a Supreme Court justice might be. That said, here are a few examples of instances where Judge Jackson faced such matters in her career.
Judge Jackson’s most important tax case as a district court judge was Z Street v. Koskinen (D.D.C. 2014), in which a Pennsylvania non-profit seeking tax-exempt status alleged that the IRS was subjecting Israel-related non-profits to more rigorous review procedures in violation of their First Amendment rights. The IRS countered that the lawsuit could not be brought at all because of the Anti-Injunction Act (AIA), which bars lawsuits that would interfere with the assessment or collection of taxes. Judge Jackson ruled against the IRS, concluding that the relief that Z Street sought – being treated like every other non-profit – was about IRS procedures and not the assessment or collection of taxes. Judge Jackson properly understood that the AIA is not as expansive as the IRS thinks it is, and that not every lawsuit that remotely affects tax collection is barred.
Judge Jackson has also ruled against the IRS in a case seeking access to its communications with other tax agencies. In Cause of Action Institute v. IRS (D.D.C. 2019), she rejected an IRS attempt to dismiss a lawsuit over the IRS’s decision to refuse a Freedom of Information Action (FOIA) demand for agency records. She concluded that such an issue should be resolved as the case proceeded and was not proper for a motion to dismiss. Ruling for the IRS in this case would have essentially allowed the IRS to become immune to many FOIA requests.
Three other matters potentially illustrate a less favorable stance towards taxpayers, albeit in cases where taxpayers made procedural errors. In Feldman v. Bowser (D.D.C. 2018) a D.C. resident challenged the D.C. Budget Autonomy Act, claiming the statute conflicted with other laws requiring that Congress approve the city’s full budget. Judge Jackson dismissed the suit for lack of standing because Feldman did not allege an injury, such as the funds being misappropriated. In United States v. Greer (D.D.C. 2020), Judge Jackson upheld a magistrate judge’s determination of a taxpayer owing over $500,000 to the IRS. Although the IRS’s calculation of that amount was not initially substantiated, Judge Jackson ultimately upheld the amount because the taxpayer failed to participate in the proceedings in any way. In Baisden v. Barr (D.D.C. 2020), the plaintiff challenged a federal law preventing him from owning a gun due to his prior conviction for tax evasion. Because the plaintiff did not claim that he wished to possess a gun or provide evidence he ever used a gun, Judge Jackson dismissed the case.
An additional, more recent, case is not tax-related, but could affect the long-standing position of the IRS and the U.S. Treasury Department that their policy statements and revenue rulings are not subject to the Administrative Procedure Act (APA). In American Federation of Government Employees v. Federal Labor Relations Authority (D.C. Cir. 2022), Judge Jackson held that a government agency had inadequately followed the APA in issuing a new rule. The federal agency in charge of labor relations with federal employees had raised the threshold for items it referred to collective bargaining, from any minor (de minimis) changes to “substantial” changes. Judge Jackson held that the FLRA’s four-page policy statement was inadequate in explaining the shortcomings of the previous standard, justifying the new standard, or undertaking the change without soliciting public comment. In short, Judge Jackson rejected the FLRA’s attempt to get around the APA. If she is confirmed as a justice, she will likely confront cases where the IRS and Treasury attempt to do the same.
While offering some glimmers of hope in cases focused narrowly on elements of the AIA or APA, Jackson’s relatively short tenure as an appeals court judge provides a confounding variable to any effort to predict her approach to other tax-related cases if she is elevated to the Supreme Court. Judge Jackson has not wrestled with some of the more significant taxpayers rights’ and constitutional interpretation matters that she would as a justice. NTUF will be closely monitoring the confirmation process, including Judge Jackson’s answers to questions posed by senators and other stakeholders.