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55
TAX DECISION MAKING
Scholars have long acknowledged the importance of ideology in judicial
decision making for the U.S. Supreme Court and for lower courts (Hettinger,
Martinek, and Lindquist 2004; Segal and Spaeth 2002), to the extent that it
is now a scholarly given (Rowland and Carp 1996). The ability of a justice
to use ideology is premised on judicial independence, with the guarantee of
lifetime tenure and the lack of any realistic constraints (Segal and Spaeth
2002). However, unlike Supreme Court rulings, decisions of lower courts
are a function of ideology and additional constraints such as hierarchical
precedent and institutional structure. For example, Songer, Cameron, and
Segal (1995) show that federal appellate courts responded to conservative
decisions of the U.S. Supreme Court with increased conservative decisions,
even controlling for appellate ideology. Studies of state supreme courts show
how institutional structure and design infl uence decision making, with
elected judges and judges facing retention or reelection less likely to vote
their sincere preferences (Brace and Hall 1990; Hall 1992).
As noted, specialized courts are another example of courts within
the federal hierarchy. Unlike the courts created under the judicial power
of Article III, Congress creates Article I courts to deal with certain specifi c
subject areas. Usually these matters involve complex, frequently litigated
issues (Baum 1990; Hansen, Johnson, and Unah 1995). While expertise
is undoubtedly a consideration in their creation, the failure to guarantee
lifetime tenure or salary allows greater legislative and executive control
over outcomes in comparison to the outcomes of a more general, lifetime-
tenured, independent Article III court (see generally McCubbins, Noll, and
Weingast 1987).
The Tax Court deals with a large docket of post-audit assessment
cases. During the mid-1990s, on average more than 25,000 cases were fi led
per year. These cases often involve technically complex issues calling for
signifi cant judicial discretion in meaning and interpretation. Few would
argue that the Internal Revenue Code is simple. One former IRS revenue
agent and author of tax preparation manuals urged his readers not to use
the Internal Revenue Code as a reference source for tax law because of its
sheer complexity and lack of accessibility (Wade 1986). For example, the
concept of  adequate documentation of business expenses involves a large
amount of discretion beyond the extremes of no documentation or requiring
contemporaneous written evidence for every claimed deduction. The evalu-
ation of such claims demands some area expertise in addition to accounting
or bookkeeping skills. Complexity, caseload, and limited tenure imply greater
expertise in the specialized courts as well as potentially greater control of the
agency through the use of this expert judiciary and greater control of the
specialized court through a much shorter appointment time frame. It appears
to be a trade-off there is greater expertise, but less independence.
56
GETTING A POOR RETURN
Scholars have examined specialized courts in other areas of law and
policy. Studies of the International Court of Trade and the Patent Court
(whose duties are now divided between the Patent and Trademark Offi ce
and Court of Appeals for the Federal Circuit) show that these courts behave
as theoretically expected. The specialized courts are less deferential to agen-
cies than the nonspecialized federal courts of general jurisdiction (Hansen,
Johnson, and Unah 1995; Unah 1997). Because the courts have expertise in
these areas of law they do not have to rely on agency interpretation. This
expertise extends to their relationship with hierarchically superior courts.
One scholar examining the now replaced Court of Customs and Patent
Appeals found that this court was signifi cantly less likely than the Federal
Circuit Court of Appeals to rely on Supreme Court authority when making
decisions (Baum 1995).
These fi ndings are consistent with theories of congressional design
and bureaucratic control. Creating a specialized court that has the ability to
disregard agency expertise could serve political as well as policy goals (see,
e.g., McCubbins, Noll, and Weingast 1987, 1989) by controlling the agency
when Congress has neither the time nor resources to do so. This presupposes
that the specialized court will enforce the policy goals of the democratic
branches of government. A specialized Article I court of limited tenure can
be aligned with the policy preferences of the legislature and the executive [ Pobierz całość w formacie PDF ]

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