by Robert M. Howard. Albany, NY: SUNY Press, 2009. 138pp. Hardcover. $65.00. ISBN: 9781438428895. Paperback. $24.95. ISBN: 9781438428888. Electronic. $24.95. ISBN: 9781438428901.
Reviewed by Brian M. Harward, Department of Political Science, Allegheny College. Email: bharward [at] allegheny.edu.
Scholars have long recognized that an important contributor to the direction and scope of judicial policymaking is the influence of deliberate governmental policies that leave for the courts responsibilities that might otherwise be under the authority of bureaucratic regulation (Kagan and Axelrad 1997; Smith 2006). Consequently, judicial outcomes have been shown to be largely consistent with the preferences of the dominant political coalition (see, for example, Dahl 1957). A parallel literature has explored a counter-majoritarian thesis. Specifically, scholars have examined the ability of disadvantaged groups and individuals to pursue litigation strategies for protection or redress of grievances that legislatures and executives denied them.
In GETTING A POOR RETURN: COURTS, JUSTICE, AND TAXES, Robert Howard addresses these themes in the context of U.S. tax policy and taxpayer relief from IRS audits. Specifically, he is interested in considering whether courts “protect the rights of the individual, particularly the low-income taxpayer, or do they enforce dominant policy preferences” (p.74). He finds that Tax Court decisions reflect the preferences of the majority political coalition through the influence of judicial appointments and federal tax policy legislation that affect venue selection and litigants’ decisions whether to file a claim. It is, then, not likely that the courts will serve a counter-majoritarian role. Rather, Howard argues, judicial preference and political branch influence serve to constrain court decisions, and by extension, effectively constrain IRS policy.
The book fits nicely at the intersection of several well-developed and important literatures, including judicial decision-making, litigant choice, “upperdogs versus underdogs,” bureaucratic discretion, and congressional-executive relations. The analyses Howard uses to test multiple dimensions of his thesis are appropriate, rigorous, and clearly explained. The findings generally confirm recent studies regarding the sensitivity of judicial actors to majoritarian influences. But this is an interesting contribution to the broader literature in its treatment of the effect of legislative preference on IRS behavior, Tax Court (and Federal District Court) decisions, and forum shopping. The result is the recognition that tax policy can be a striking example of the contingent nature of both bureaucratic behavior and judicial outcomes.
Howard’s analysis begins with an overview of the history of tax policy in the U.S, IRS audits, and a comparison of the multiple courts that hear tax claims. [*580] The latter is particularly helpful as it informs the decision calculus of litigants searching for a forum in which to bring a challenge to an IRS audit assessment – a decision that shapes courts’ agenda-setting. The third chapter focuses on two critical questions: whether to litigate a post-audit assessment by the IRS, and where to bring the claim if one has opted to challenge the assessment. Howard develops a series of hypotheses that address judicial ideology, the ideological preference of the dominant political coalition, and wealthy litigants and poor litigants.
Drawing from previous studies (Shipan 2000; Smith 2006), Howard argues that one important way the dominant political coalition is able to control IRS behavior is by encouraging individual litigation. Citizen suits, then, become an important way for Congress to assert control over agency behavior that it could not assert through direct oversight or statutory means. In addition, the dominant coalition may encourage the use of a particular forum for those suits if that forum has shown to be more sensitive to the coalition’s preferences than an alternative forum. One way a forum may be sensitive to the dominant coalition is through judicial appointments. Specifically, Article I Tax Courts seem to be more sensitive to legislative preference, given the 15 year appointment (rather than lifetime tenure for District Court judges). Thus, according to Howard, forum choice is a consequence of legislative design.
Given this sensitivity, and given ideological preferences of Republican majorities, for example, a GOP-dominated coalition “would encourage litigation against the IRS as an additional measure of agency control over tax collection and would encourage taxpayers to use the Tax Court if that Court was more conservative than the District Court” (p.37). The data seem to confirm this hypothesis. We do see more post-audit claims filed in response to conservative signaling from the dominant coalition. Moreover, “[i]t is rational for [the litigants] to select the more conservative forum because that will be the one most favorable to the taxpayer and least likely to support the IRS” (p.52).
In the next chapter, Howard explores whether the differences in court structure and ideological membership matter in terms of judicial outcomes. The results support the earlier analysis by confirming that the “shorter-tenured, less independent Tax Court is more ideological in tax rulings than the District Court” (p.67). The dominant political coalition, then, is more able to affect judicial outcomes in the (Article I) Tax Court than the District Court. In addition, because the Tax Court is a national court with a national jurisdiction (as opposed to a more limited jurisdiction District Court), the IRS is more likely to be sensitive to Tax Court decisions. It follows, then, by controlling Tax Court outcomes, Congress and the president can push the IRS to behave in a manner consistent with the preferences of the dominant political coalition. The next chapter examines this hypothesis by considering to what extent IRS auditing behavior reflects the dominant political coalition’s preferences.
Perhaps the most important contribution of this chapter is the very clear explanation of how Howard formulates [*581] his measure of the “dominant political coalition.” Earlier chapters might have benefited from a similar discussion, especially as much of the analysis was founded upon the notion that the dominant political coalition pursues litigation strategies to achieve policy goals it couldn’t achieve through legislation. Nonetheless, Chapter 5 includes a separation of powers model which identifies the parameters of permissible policy placement by the IRS. Courses that emphasize judicial decision-making would benefit from this very straightforward explication of the model. The model, the empirical examination of the hypotheses derived from the model, and the operationalization of the relevant variables are well-conceived and well-explained. In particular, Howard’s treatment of Tax Court judges’ ideology is worth reviewing. Consequently, the results are interesting and suggestive – perhaps even more so than the earlier analyses which were limited to a very short time period. Howard finds that “[a]ll the branches of government work to control the agency and the increasing conservatism of the Tax Court, District Court, and the governing political coalition is the reason for the increase in the number of low-income audits” (p.94). Thus, even though the conservative dominant political coalition is anti-tax, it does not follow that the coalition is opposed to auditing low-income taxpayers who claim the Earned Income Tax Credit. In fact, the poor are targeted by the IRS as a consequence of national policymakers’ influence on the courts. Howard demonstrates that IRS policy, and the heightened attention to the filings of low-income taxpayers reflects both judicial preferences and the preferences of the dominant political coalition.
Though the analyses in Chapters 3, 4, and 5 are aggregated measures of IRS, Tax Court and District Court behavior, Howard buttresses these studies with brief case studies of particular litigants seeking review of a post-audit assessment by the IRS. The cases reflect a range of litigant types and serve to illustrate the very real choices and dilemmas facing those audited by the IRS as they contest the results. While Howard introduces each of the cases, and refers to a few of them as the analyses are introduced, readers seeking more meaningful connection between actual people and the context of their decision-making environment will not find it here. Nonetheless, the emphasis on the low-income litigant’s plight is a powerful way of contextualizing the larger study and accentuating why such an inquiry is so important.
Dahl, Robert A. 1957. “Decision-Making in a Democracy: The Supreme Courts as a National Policy-Maker.” JOURNAL OF PUBLIC LAW 6: 284-295.
Kagan, Robert A. and Lee Axelrad. 1997. “Adversarial Legalism: An International Perspective,” in COMPARATIVE DISADVANTAGES? SOCIAL REGULATIONS AND THE GLOBAL ECONOMY. Pietro S. Nivola (ed.). Washington, DC: The Brookings Institution. [*582]
Shipan, Charles R. 2000. “The Legislative Design of Judicial Review: A Formal Analysis.” JOURNAL OF THEORETICAL POLITICS 12(3): 269-304.
Smith, Joseph L. 2006. “Judicial Procedures as Instruments of Political Control: Congress’s Strategic Use of Citizen Suits,” LEGISLATIVE STUDIES QUARTERLY 31: 283-305.
© Copyright 2010 by the author, Brian M. Harward.