Tax Court Says IRS Appeals Officers Not Subject to Presidential Appointments Clause

Does the President of the United States have the exclusive power to appoint or remove IRS Appeals Officers? In a January 29, 2025, opinion which seemed to almost anticipate the new administration’s actions in other areas of the government, the Tax Court said that IRS appeals officers are not subject to the U.S. Constitution’s Appointments Clause.

Taxpayer Uses Constitutional Appointments Clause to Avoid Tax Liability

Charlton C. Tooke, III, a Florida resident, filed tax returns for years 2012 through 2017, but then didn’t pay his taxes. In light of the unpaid tax debt, the IRS assessed the tax and issued a Notice of Federal Tax Lien Filing and a Final Notice of Intent to Levy. Mr. Tooke exercised his right to internal review by requesting a Collection Due Process (CDP) hearing with the IRS Appeals office.

When efforts to reach an offer-in-compromise failed, Mr. Tooke asserted that the IRS Appeals Officer, and the officers involved in his case were unconstitutionally appointed by the IRS. He argued that under the Constitution’s Appointments Clause, the Chief of Appeals, team manager, and even the individual officers reviewing his case had to be appointed by the President of the United States and confirmed by the Senate. The Appeals Officer and the Appeals Team Manager (the officer’s supervisor) said his argument was frivolous and upheld the IRS tax assessment, lien, and levy. So Mr. Tooke went one step higher, filing a petition in the Tax Court and filing two motions asking that Court to find the IRS Appeals office unconstitutional.

What Does the Appointments Clause Have to Do with an IRS Appeal?

The Appointments Clause of the United States Constitution says:

[The President] shall nominate, and by and with the Advice and Consent of the Senate, shall appoint … Officers of the United States, whose Appointments are not herein otherwise provided for, and which have been established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.

In considering Mr. Tooke’s motions, the Tax Court looked at the intent of the Framers of the United States Constitution, as described in the Declaration of Independence, in creating a separation of powers to protect against an executive (originally the British monarch) sending “swarms of Officers to harrass [sic] our People. ” The question then, was whether the IRS Appeals Officers, Team Managers, and Chief of Appeals were “Officers” or “inferior Officers” under the Appointments Clause.

The Taxpayer First Act Codified the IRS Appeals Office, and Its Chief

While the name, structure, and authority has changed over the years and amendments to the tax code, the purpose of the Appeals Office, according to the Tax Court, has always been “to resolve tax controversies without litigation.” While earlier versions existed pursuant to IRS regulations, the current version is authorized by statute under the Taxpayer First Act passed in 2019.

The Taxpayer First Act also codified the position of the Chief of Appeals, who reports directly to the Commissioner of Internal Revenue. According to that law, the Chief “shall be appointed by the Commissioner of Internal Revenue.” The Commissioner, in turn, is appointed by and overseen by the President of the United States.

IRS Appeals Officers conduct hearings and consider alternatives to collections in individual taxpayer cases. An Appeals Team Manager supervises the Appeals Officers and approves their determinations. All IRS Appeals Officers and personnel report to the Chief of Appeals. However, unlike the Chief of Appeals, the position of Appeals Officer was created internally by the IRS and had existed since 1978.

Tax Court Says Taxpayer Does Not Have Standing to Challenge Chief of Appeals’ Appointment

The Tax Court treated Mr. Tooke’s motion regarding the IRS Chief of Appeals separately from his challenge to the IRS Appeal Officers or Team Manager involved in his case specifically. The difference, according to the Tax Court, was whether Mr. Tooke had standing to challenge the different individuals’ positions.

Standing is a legal term that means the legal ability to sue or file a claim. Acknowledging certain non-binding statements in earlier cases to the contrary, the Tax Court held that Mr. Tooke could not legally challenge the Chief’s appointment under the Appointments Clause, or ask for his removal under a separation of powers argument because the Chief was not directly involved in his case, but instead acted as a superintendent to the IRS Appeals Office as a whole. The Tax Court noted that the Third and Fourth Circuits had also rejected such a “root-to-branch” theory of standing in the context of the Department of Justice and assistant attorneys general. Since the Chief of Appeals was not involved in Mr. Tooke’s case, the Tax Court said the appointment – valid or otherwise – did not affect the outcome of his case, so he did not have standing to challenge it.

Appointments Clause Doesn’t Cover IRS Appeals Officers, Tax Court Says

The Tax Court did find that Mr. Tooke had standing to challenge the appointment of the IRS Appeals officers and team managers actually involved in the case. This is because, if the Tax Court determined that the IRS Appeals Officers or Team Manager on the case had been improperly appointed, it could have remanded the case to the IRS for a new hearing before properly appointed officials, with a different result.

However, in order to prove his case, Mr. Tooke needed to demonstrate that the IRS Appeals Officers and Team Manager that reviewed his case held positions that were intended to be appointed according to the Appointments Clause. That does not include “lesser functionaries” and other nonofficer employees who do not exercise “significant authority.”

Mr. Tooke argued that IRS Appeals Officers are “inferior officers” because they exercised decision-making authority and Team Managers are “principal officers” since they review and approve the Appeals Officers’ decisions. He said that meant both positions fell under the Appointments Clause. However, the IRS said that Appeals Officers and Team Managers’ positions are not established by law, and they do not have discretion in their decision-making.

An earlier decision in Tucker v Commissioner, in 2012, said that these positions did not fit under the Appointments Clause, but that was before the Taxpayer First Act. Upon careful consideration, the Tax Court agreed with the Tucker decision, saying that IRS Appeals Officers do not have substantial authority. They have no subpoena power, or right to examine witnesses at a CDP hearing. All they can do is request (but not compel) the filing of affidavits. Further their decisions are subject to review by the Team Manager. It therefore determined that IRS Appeals Officers were not Officers of the United States at all. Even when it came to Team Managers, the Tax Court found no significant authority because they do not exercise any “adjudicatory power.” Mere supervision of the IRS Appeals Officers was not enough.

The Tax Court’s decision that the Constitutional Appointments Clause does not apply to IRS Appeals Officers may well be tested soon. As the new President’s administration has taken steps in its first days in office to exercise its authority to remove officers in various departments, IRS Appeals Officers may soon face this legal question themselves (if they have not already). When they do, Tooke v IRS may provide relevant guidance to future courts considering the control the President has over the rank and file members of the IRS.

Attorney Joseph R. Viola is a tax attorney in Philadelphia, Pennsylvania with over 35 years experience. If you have questions about IRS Appeals, contact Joe Viola to schedule a free consultation.