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89–658—PDF 2013

S. HRG. 113–388 

NOMINATIONS OF MICHAEL B. THORNTON, 

JOSEPH W. NEGA, AND F. SCOTT KIEFF 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

ON THE

NOMINATIONS OF 

MICHAEL B. THORNTON, TO BE A JUDGE OF THE UNITED STATES TAX 

COURT; JOSEPH W. NEGA, TO BE A JUDGE OF THE UNITED STATES 

TAX COURT; AND F. SCOTT KIEFF, TO BE A MEMBER OF THE UNITED 

STATES INTERNATIONAL TRADE COMMISSION 

JULY 18, 2013 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

SHERROD BROWN, Ohio 

MICHAEL F. BENNET, Colorado 

ROBERT P. CASEY, Jr., Pennsylvania 

ORRIN G. HATCH, Utah 

CHUCK GRASSLEY, Iowa 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

JOHN THUNE, South Dakota 

RICHARD BURR, North Carolina 

JOHNNY ISAKSON, Georgia 

ROB PORTMAN, Ohio 

PATRICK J. TOOMEY, Pennsylvania 

AMBER COTTLE, Staff Director 

CHRIS CAMPBELL, Republican Staff Director 

(II) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee 

on Finance ............................................................................................................ 1 

Hatch, Hon. Orrin G., a U.S. Senator from Utah ................................................. 3 

ADMINISTRATION NOMINEES 

Thornton, Hon. Michael B., nominated to be a judge of the United States 

Tax Court, Washington, DC ................................................................................ 5 

Nega, Joseph W., nominated to be a judge of the United States Tax Court, 

Washington, DC ................................................................................................... 6 

Kieff, F. Scott, nominated to be a member of the United States International 

Trade Commission, Washington, DC .................................................................. 7 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Baucus, Hon. Max: 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 15 

Hatch, Hon. Orrin G.: 

Opening statement ........................................................................................... 3 

Prepared statement .......................................................................................... 17 

Kieff, F. Scott: 

Testimony .......................................................................................................... 7 

Prepared statement .......................................................................................... 19 

Biographical information ................................................................................. 21 

Responses to questions from committee members ......................................... 50 

Nega, Joseph W.: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 61 

Biographical information ................................................................................. 62 

Thornton, Hon. Michael B.: 

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 69 

Biographical information ................................................................................. 70 

(III) 

(1) 

NOMINATIONS OF MICHAEL B. THORNTON, 

TO BE A JUDGE OF THE UNITED STATES TAX 

COURT; JOSEPH W. NEGA, TO BE A JUDGE OF 

THE UNITED STATES TAX COURT; AND 

F. SCOTT KIEFF, TO BE A MEMBER OF 

THE UNITED STATES INTERNATIONAL 

TRADE COMMISSION 

THURSDAY, JULY 18, 2013 

U.S. SENATE, 

COMMITTEE ON FINANCE, 

Washington, DC. 

The hearing was convened, pursuant to notice, at 2:50 p.m., in 

room SD–215, Dirksen Senate Office Building, Hon. Max Baucus 

(chairman of the committee) presiding. 

Present: Senators Nelson, Hatch, and Thune. 

Also present: Democratic Staff: Mac Campbell, General Counsel; 

Lisa Pearlman, International Trade Counsel; Rory Murphy, International Trade Analyst; and Tiffany Smith, Tax Counsel. Republican Staff: Everett Eissenstat, Chief International Trade Counsel; 

Shane Warren, International Trade Counsel; Nicholas Wyatt, Tax 

and Nominations Professional Staff Member; Rebecca Nasca, Staff 

Assistant; and Richard Chovanec, Detailee. 

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR 

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The committee will come to order. 

Winston Churchill once said, ‘‘All the great things are simple, 

and many can be expressed in single words: freedom, justice, 

honor, duty, mercy, hope.’’ These principles guide our democracy, 

and, while simple in concept, they require vigilance to maintain. 

These principles require experienced citizens willing to embrace 

public service. They require a fair and reasonable legal system. 

They require public confidence in our government. 

The nominees before us must be vigilant in honoring these principles. Between them, they have decades of experience and, if confirmed, they will play an important role in protecting the interests 

of millions of Americans. 

Mr. Scott Kieff, you have been nominated by the President to 

serve as a Commissioner of the U.S. International Trade Commission, commonly referred to as the ITC. The ITC enforces our Nation’s trade laws, including our trade remedy laws and section 337. 

2 

If confirmed, we will look to you to fairly and objectively enforce 

those laws. We will also call upon you and the rest of the ITC to 

provide the committee with economic research on issues affecting 

global trade. I can tell you, they are very important and mean a 

lot to us. 

The ITC has provided us thorough reports in the past of the barriers U.S. exporters and innovators face in foreign markets. For example, Senator Grassley and I requested a ground-breaking ITC 

study on Chinese intellectual property theft. That study provided 

us with an independent, authoritative look at the impact of IP theft 

on U.S. jobs and our economy. 

I can assure you, Mr. Kieff, it will keep you busy. The Finance 

Committee will continue to move forward with an ambitious trade 

agenda. We will look to you for objective analysis when shaping our 

policy. 

As a graduate of MIT and the University of Pennsylvania, Mr. 

Kieff, you have spent your career working on issues related to 

international trade, in both the public and private sector and in 

academia. Over the past 15 years, you have been teaching law at 

some of the Nation’s top universities, including George Washington, Chicago, Harvard, and my alma mater Stanford, and I 

know my colleagues on the committee will not hold that against 

you. 

Also with us today are Judge Michael Thornton and Joseph 

Nega. You have both been nominated by President Obama to serve 

as judges on the U.S. Tax Court. Judge Thornton, this is a return 

engagement for you. You appeared before this committee about 15 

years ago after being nominated to the U.S. Tax Court by President 

Clinton. 

You cut your teeth as a tax counsel here on Capitol Hill for the 

Ways and Means Committee, then at the Treasury Department, 

serving under Secretary Rubin. Welcome back. You have done a 

great job at the Tax Court, rising up to become the chief judge. I 

am pleased that the President has re-nominated you. 

Finally, we will consider the nomination of Mr. Joseph Nega to 

the U.S. Tax Court. Mr. Nega, you have dedicated your entire life, 

your entire career, to public service. You began as a young staffer 

in the House and served for the past 28 years on the Joint Committee on Taxation. You now serve as a senior legislative counsel 

at JCT. I do not know what this committee or this Congress would 

do without a great team at JCT, and that is very much an understatement. We very much value your work. You cannot believe how 

much we value your work. 

As you know, Judge Thornton, and as you will soon learn, Mr. 

Nega, you are taking on a great responsibility at the United States 

Tax Court. The Court provides Americans a forum to address tax 

issues. Approximately 30,000 cases are filed in the Court annually. 

If confirmed, you will be the arbiter on these cases, and you must 

ensure that our tax codes are administered fairly. 

In the wake of the IRS scandal, public confidence in our tax system is low. You must be thorough; you must give our citizens a fair 

day in court. Your work can go a long way toward restoring the 

public’s confidence. 

3 

I thank all three of you for your willingness to serve in these positions to which you have been nominated. You will have the complex task of protecting and maintaining freedom, justice, honor, 

duty, mercy, and hope, the great things of which Winston Churchill 

spoke. Good luck. 

[The prepared statement of Chairman Baucus appears in the appendix.] 

The CHAIRMAN. Senator Hatch? 

OPENING STATEMENT OF HON. ORRIN G. HATCH, 

A U.S. SENATOR FROM UTAH 

Senator HATCH. Well, thank you, Mr. Chairman. I welcome the 

opportunity to hear from our witnesses here today, and I am 

pleased to welcome Scott Kieff to the committee today. He is nominated to be a member of the U.S. International Trade Commission, 

and that is very important to me. 

His distinguished career includes work as a law professor at several prestigious universities. He has also served as a law clerk to 

the Honorable Giles S. Rich of the U.S. Court of Appeals for the 

Federal Circuit and practiced law for 6 years in Chicago and New 

York. 

Mr. Kieff is currently a senior fellow at Stanford’s Hoover Institution, where he directs a project studying the law, economics, and 

the politics of innovation. I have to say to Mr. Kieff, your background is very impressive to me. I believe you will be an exceptional addition to the International Trade Commission, and I am 

looking forward to working with you and seeing things work a little 

bit better than they have. 

I am particularly impressed with your extensive background in 

intellectual property issues. That is critical to our country and very 

much ignored by many in the world today. Intellectual property is 

the lifeblood of the U.S. economy, and providing adequate protection to intellectual property is fundamental to our continued ability 

to innovate and compete in the global economy. 

The ITC plays an important role in administering the laws designed to protect U.S. intellectual property rights. For example, the 

ITC’s section 337 process is a vital tool for U.S. companies that face 

unfair competition from foreign imports that infringe their intellectual property. I have a longstanding interest in making sure this 

process operates as effectively as possible. 

Senator Baucus and I recently requested that the Government 

Accountability Office examine the effectiveness of the enforcement 

of ITC’s section 337 exclusion orders. The ITC also conducts important analytical work related to intellectual property. For example, 

the ITC conducted an important study requested by this committee 

on the effects that intellectual property rights infringement and indigenous innovation policies in China have on U.S. jobs and, of 

course, our economy. 

The ITC is also preparing a study requested by this committee 

examining digital trade in the U.S. and global economies, including 

the importance of effective intellectual property rights protection. 

So, although the ITC is not a policy-making agency, I believe Mr. 

Kieff’s background and expertise on intellectual property issues 

4 

will bring an important perspective to the agency’s work, and I intend to support you. 

Today we will also hear from two nominees to the U.S. Tax 

Court. As we all know, the Tax Court is very important, as it is 

the only venue in which a taxpayer may challenge the government 

before paying an assessed tax liability. The court gives taxpayers 

a chance to be fully heard in a neutral and public forum. 

One of the nominees before us today is Joseph Nega, who currently serves as Senior Legislative Counsel at the Joint Committee 

on Taxation. Here on the Finance Committee, we have benefitted 

from Mr. Nega’s work for a long time. He will leave behind very 

big shoes to fill at the JCT. So we are proud of you and what you 

have been able to do. 

We will also hear from Judge Michael Thornton, who has already 

served very well a term on the Tax Court. Should he be reconfirmed, taxpayers throughout the country will continue to benefit 

from having his knowledge and expertise on the Tax Court. 

As is customary for Tax Court judges who are willing to continue 

serving after their terms expire, Chairman Baucus and I encouraged President Obama to reappoint Judge Thornton, and I am glad 

that he followed our advice—one of the few times that he has, of 

course. No, he has been pretty good about it. 

In the same letter, we also recommended to the President that 

he reappoint Judge L. Paige Marvel, whose term has also expired. 

I hope that we will be able to consider that nomination soon. It is 

the taxpayers who will pay the price if the Tax Court is not kept 

staffed with qualified judges. 

So, as you can see, we have some important positions to fill, and, 

from the looks of it, we have some very qualified nominees. So I 

want to thank you, Mr. Chairman, and I look forward to hearing 

from these nominees. I look forward to supporting all three of 

them. 

The CHAIRMAN. Well, thank you, Senator, very, very much. I 

deeply appreciate working with you. 

[The prepared statement of Senator Hatch appears in the appendix.] 

The CHAIRMAN. I would now like to introduce the panel, but, before doing so, I would like to recognize two in the audience who are 

very important to the Court and very important to this committee: 

Judge John Colvin and Judge Elizabeth Paris from the U.S. Tax 

Court. 

Would you both stand and be recognized, please? We honor you 

both very much for your service. It is good to see good people going 

on and continuing to perform good work in other areas as you have 

in the Tax Court. Thanks for your service. 

The first witness is Judge Michael Thornton, nominated to his 

second term as judge on the U.S. Tax Court. The second witness 

is Joseph Nega, nominated to be a judge on the U.S. Tax Court. 

Finally is Scott Kieff, nominated to be a member of the U.S. International Trade Commission. 

Judge Thornton, why don’t you begin? You probably know our 

practice here, which is, your statement is automatically included in 

the record, and why don’t you summarize for about 5 minutes? If 

5 

you want to speak longer and have great wisdom to impart, we are 

ready to learn. 

Judge THORNTON. I will be very concise. Chairman Baucus, 

Ranking Member Hatch—— 

The CHAIRMAN. Actually, before you begin, I would like you to introduce your family. 

Judge THORNTON. I will be glad to do that. I have with me today 

my wife, Alexandra Deane Thornton—— 

The CHAIRMAN. Hi. 

Judge THORNTON [continuing]. And my daughter, Kaley Thornton. 

The CHAIRMAN. Could you both stand again and be recognized? 

[Applause.] 

Go ahead. 

STATEMENT OF HON. MICHAEL B. THORNTON, NOMINATED TO 

BE A JUDGE OF THE UNITED STATES TAX COURT, WASHINGTON, DC 

Judge THORNTON. So, Chairman Baucus, Ranking Member 

Hatch, distinguished members of the committee, thank you for the 

privilege of appearing before you today. I last appeared before this 

committee a little over 15 years ago, after I was nominated for my 

first term as a Tax Court judge. I am grateful to President Obama 

for nominating me for a second term on the Court, and I am grateful to you and the committee’s outstanding staff for processing my 

nomination so promptly. 

When she attended my first confirmation hearing, Kaley here, 

who is sitting behind me, was just 3 years old and was looking forward to entering preschool. It is a vivid reminder of the passage 

of time that she is now looking forward to attending Duke University in the fall. My other daughter, Camille, unfortunately cannot 

be here today because she is attending a summer camp out of town. 

I came to the Tax Court after years of tax experience in private 

practice, on the Hill, and in the Treasury Department. That was 

all good preparation for the past 15 highly rewarding years on the 

Tax Court, where I have endeavored to maintain the Court’s long 

tradition and high standards of resolving tax controversies fairly, 

impartially, and expeditiously, in accordance with congressional intent. 

In addition to trying and deciding hundreds of cases, I have 

worked actively to better the Court administratively in ways such 

as modernizing its rules and bringing the Court more up to date 

with the use of technology for e-filing and providing remote electronic access to the Court’s records. 

Last year I was honored to have been elected by my colleagues 

for a term as Chief Judge. If confirmed for another term on the 

Court, I would hope to continue to help maintain and enhance the 

public’s confidence in the Tax Court as the forum of choice for litigating Federal tax controversies. 

Thank you very much. I would be happy to answer any questions 

you might have. 

The CHAIRMAN. Thank you, Judge. 

[The prepared statement of Judge Thornton appears in the appendix.] 

6 

The CHAIRMAN. You are next, Mr. Nega. If you could introduce 

your family, that would be great, too. 

Mr. NEGA. My wife Cecily Rock is here, and my sons David and 

Philip. 

The CHAIRMAN. Could you all stand, please? All three? Great. 

Thanks. [Applause.] 

Why don’t you proceed? 

STATEMENT OF JOSEPH W. NEGA, NOMINATED TO BE A 

JUDGE OF THE UNITED STATES TAX COURT, WASHINGTON, DC 

Mr. NEGA. Thank you. Chairman Baucus, Ranking Member 

Hatch, distinguished members of the Finance Committee, it is a 

privilege for me to be here today. Thank you for holding this hearing to consider my nomination to be a judge on the U.S. Tax Court. 

I am very grateful to President Obama for nominating me. 

I would also like to thank the Finance Committee staff members 

who have been generous with their time while working with me on 

my nomination. It is with mixed emotions that I appear before you 

here today after 28 years as a member of the staff of the Joint 

Committee on Taxation on Capitol Hill. I have truly enjoyed serving members of the House and Senate on tax legislative matters, 

both on tax policy questions and technical tax issues. 

When I came to Capitol Hill in 1985 as a young attorney, it was 

at the beginning of the legislative process which culminated in the 

passage of the Tax Reform Act of 1986. Since then, as a Joint Tax 

Committee staffer, I have provided assistance to members and 

their staffs, as well as to committee staffs, on tax proposals covering a range of subject areas. 

During the 1980s, I attended Georgetown Law School at night 

and earned a master’s degree in tax law. I believe that my training 

and my professional experience in the tax field give me the background I will need to serve as a Tax Court judge and to fairly and 

impartially apply the tax law. 

I owe a great debt of thanks to all my colleagues on the staff of 

the Joint Committee on Taxation, especially our chief of staff, Tom 

Barthold. The tax lawyers, accountants, and economists of the staff 

of the Joint Committee on Taxation have shown me over and over 

the value of teamwork among knowledgeable professionals with a 

wide range of expertise. 

The clerks and support staff are among the best on the Hill. 

When I leave Capitol Hill, I will miss the sense of shared work and 

public service with these individuals and all the many staffers who 

assist Congress in their attempts to serve the American people. 

Sorry about this, Senator. This is not my usual role. [Laughter.] 

I would like to thank my parents, who instilled in me a strong 

sense of public service. I suspect my mother will be tuning in to 

C-SPAN to watch this hearing in Chicago. 

I would also like to thank my wife of 24 years, Cecily Rock, who 

is here today, and my sons David and Philip for their love and support. If confirmed, I will work diligently to resolve tax controversies 

fairly and expeditiously. Thank you for the opportunity to testify. 

The CHAIRMAN. Thank you, sir, very much. 

[The prepared statement of Mr. Nega appears in the appendix.] 

The CHAIRMAN. Mr. Kieff, your family? 

7 

Mr. KIEFF. If I may, since we have a large group and I will briefly introduce them in the remarks, may I just ask my family to 

stand, please, and be recognized? 

The CHAIRMAN. Sure. 

Mr. KIEFF. I thank them all for coming, many from great distances. [Applause.] 

The CHAIRMAN. I think you have the record. [Laughter.] 

Mr. KIEFF. They are a supportive bunch. 

STATEMENT OF F. SCOTT KIEFF, NOMINATED TO BE A MEMBER OF THE UNITED STATES INTERNATIONAL TRADE COMMISSION, WASHINGTON, DC 

Mr. KIEFF. Chairman Baucus, Ranking Member Hatch, and 

members of the committee, thank you for inviting me to appear before you today to consider my nomination. I am grateful to President Obama for nominating me, to Minority Leader McConnell for 

supporting my nomination, and to Chairman Baucus and to Ranking Member Hatch for bringing us together for this confirmation 

hearing. 

I also am grateful for the love and support from my family, several of whom are with me today: my wife Rebecca, my mom Jacqueline, my sister Elizabeth and brother-in-law Tom, their children 

Asher and Estelle, my uncle Nelson, and my parents-in-law Terrie 

and Roy. Although he could not be here today, I give special thanks 

to my 4-month-old son Evan for being such a great sounding board 

during his midnight feedings. [Laughter.] 

And recognizing how hard it can be for the doctor to become the 

patient, I know how much my father Elliott and brother David 

wanted to be here today. I wish my dad a speedy recovery and appreciate David covering for mom on dad’s care so she could travel 

to be here. 

I am particularly honored and humbled to be here across the 

river from Arlington National Cemetery, where two of my grandparents are buried, as we discuss this opportunity for me to continue my family’s tradition of public service. 

The opportunity to engage each area of the Commission’s wideranging docket would call upon many favored aspects of the work 

I have long enjoyed throughout my career working as a practitioner, an academic, mediator, arbitrator, and consultant. 

The title 7 antidumping and countervailing duty portion of the 

docket would provide a welcome opportunity to continue my work, 

applying diverse statutory injury factors to the facts and circumstances of specific industries and products. 

I would take particular pleasure in the section 337 portion of the 

Commission’s docket, as I have throughout my 2 decades of devotion to the field of intellectual property. And the Commission’s research activities on industry and economic analysis relating to section 332 and other statutory duties to prepare reports and provide 

trade policy support, offer a fascinating range of opportunities to 

continue my academic commitment to exploring and explaining 

real-world impacts of various approaches to trade. 

In all of these areas, I would greatly enjoy working with the 

other members of the Commission and the Commission staff as we 

exchange ideas and learn from each others’ diverse wealth of expeVerDate Mar 15 2010 20:28 Sep 15, 2014 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 R:\DOCS\89658.000 TIMD
8 

riences and perspectives. Having long enjoyed working as a neutral 

mediator and arbitrator selected by all sides of a given dispute, if 

I were confirmed to this post I would enjoy faithfully and impartially working within the legal framework applicable to each matter then before the Commission to enforce the law based on the 

particular facts. 

Several areas of the Commission’s docket have been the focus of 

increasing attention and policy debates, and I understand the 

many diverse perspectives that have been offered. But I take seriously the limited role of a Commissioner and recognize that any 

legal change would be the domain of this committee, the Congress, 

and the President, with interpretation when appropriate from 

courts that review the Commission’s work. 

Over the past few months, I have enjoyed frank, substantive discussions with several of you and your staffs, and I look forward to 

answering any questions you may have. Thank you. 

The CHAIRMAN. Thank you, Mr. Kieff. 

[The prepared statement of Mr. Kieff appears in the appendix.] 

The CHAIRMAN. Judge Thornton, what are your thoughts now 

that you have been on the Court 15 years? Do you have some ideas 

about the tax laws we pass here, which ones maybe make sense 

and which ones do not, which ones are unnecessarily complicated? 

As you know, we are working on passing tax reform legislation 

in this Congress. Is there any advice you could give us as a judge 

to minimize litigation or to get more clarity, perhaps? I do not 

know if that is going to minimize litigation, but just give us any 

thoughts that you might have in proceeding forward. I would ask 

the same question of you, Mr. Nega. Although you do not have experience as a Tax Court judge, you certainly do over at the Joint 

Committee on Taxation. 

Judge THORNTON. With all due respect, I would have to defer to 

the Congress and the policies that are enacted into tax law. I think 

as a general principle, simpler is better. Probably simpler tax laws, 

I imagine, contribute to fewer controversies, even though there are 

a lot of factors that would go into determining the case load at the 

Court. 

The experience of the Tax Reform Act of 1986 is probably instructional. In the mid-1980s, the Tax Court experienced an explosion of case filings. After the Tax Reform Act of 1986, there was 

a diminishing of the cases filed. I think the Tax Reform Act of 1986 

was partially responsible for that, some of the simplification matters and the base-broadening matters—not entirely responsible, but 

partly. That is probably a good example. 

Another example: in 1993 when Congress enacted section 197, 

which provided a way of reducing controversy about the amortization of intangibles, I think that has been a very successful provision, and very few cases that I see come into controversy about 

that. So, just as a general proposition, I think measures to simplify 

the tax code probably result in benefits to the Court in terms of 

fewer controversies. 

The CHAIRMAN. In what area do you find most litigation? Over 

what section or area of the code? 

Judge THORNTON. You know, that is a hard question to answer. 

Most of our petitioners are pro se, unrepresented taxpayers. Most 

9 

of them have fairly small amounts at issue. So most of the types 

of issues that we see from them are the types of issues you might 

expect: substantiation issues, unreported income, that type of 

thing. So, given the broad base of people, the 30,000 cases a year 

that are filed in our court, most of those people tend to have fairly 

run-of-the-mill type issues like that. 

The CHAIRMAN. All right. 

Mr. Nega, from your perspective on the Joint Committee, is there 

any advice you have? I mean, you all are going to get confirmed, 

so do not worry about that. [Laughter.] 

So just be candid, knowing you are going to get confirmed. 

Mr. NEGA. Well, thank you, Senator. Well, this is my last opportunity to discuss tax policy because, as a member of the judiciary, 

it will be my job to take the tax laws as passed by Congress and 

signed by the President and enforce them expeditiously. 

So I will take the opportunity to say that I agree with Judge 

Thornton: simpler is better. The experience of the 1986 act taught 

us that. I do recognize that there are countervailing factors that 

members of Congress have to take into account, whether or not it 

is social or fiscal policy. As a general rule, simpler is better in most 

things, especially in the tax law. 

The CHAIRMAN. We all think that. Sometimes it is hard to know 

what simple is. I mean, the statute might be simple, but it can be 

applied in a near-infinite number of circumstances. Take the First 

Amendment of the Constitution, ‘‘Congress shall pass no law 

abridging the freedom of speech.’’ Well, what in the heck does that 

mean? I mean, when you say ‘‘simpler,’’ you mean, what? Basebroadening, fewer provisions? Does that help or what? 

Mr. NEGA. What they taught me back in my JD and my LLM 

programs was, as a general rule, remember four words: ‘‘basebroadening’’ and ‘‘lower rates.’’ In my role as staff person, that is 

something that I have always taken to heart in trying to advise 

other staff people. I think that there are going to be exceptions 

from that rule. It is a very complicated economy, and Congress has 

to respond to the complicated world we live in. But if you will remember broad base, lower rates, you are a long way towards improving the tax system. 

The CHAIRMAN. Mr. Kieff, we are going to take up trade legislation this year, and certainly Trade Promotion Authority. It might 

be an opportunity to also address legislation as it affects the ITC. 

Your thoughts, ideas, recommendations? Again, you are going to be 

confirmed too, so do not worry. 

Mr. KIEFF. Well, you are very kind, Chairman Baucus. As my 

colleagues at the table have expressed, I too would be in a role that 

would be, not a policy role, it would be a role in which I would be 

constrained to apply the law to the facts. 

But I hear what you are saying and agree that there are important issues, and I really enjoyed writing about and working on 

them for many years. I think that the Commission itself has taken 

some steps in this area to improve the efficiency of dispute processing, so electronic dockets, things like that, e-discovery—and I 

understand that the committee is considering a number of approaches as well. 

The CHAIRMAN. Thank you. 

10 

I have four obligatory questions I have to ask each of the three 

of you before proceeding with Senator Hatch. If you could all answer, please. I will ask the same question of all three, but I will 

start with you, Judge Thornton. You have been through this drill 

before. 

Is there anything that you are aware of in your background that 

might present a conflict of interest with the duties of the office to 

which you have been nominated? 

Judge THORNTON. No, sir. 

Mr. NEGA. No, sir. 

Mr. KIEFF. No, sir. 

The CHAIRMAN. Thank you. Do you know of any reason, personal 

or otherwise, that would in any way prevent you from fully and 

honorably discharging the responsibilities of the office to which you 

have been nominated? 

Judge THORNTON. No, sir. 

Mr. NEGA. No, sir. 

Mr. KIEFF. No, sir. 

The CHAIRMAN. Do you agree, without reservation, to respond to 

any reasonable summons to appear and testify before any duly constituted committee of Congress, if confirmed? 

Judge THORNTON. Yes, sir, I do. 

Mr. NEGA. Yes, sir. 

Mr. KIEFF. Yes, sir. 

The CHAIRMAN. And finally, do you commit to provide a prompt 

response in writing to any questions addressed to you by any Senator of this committee? 

Judge THORNTON. Yes, sir, I do. 

Mr. NEGA. Yes, sir. 

Mr. KIEFF. Yes, sir. 

The CHAIRMAN. Thank you. 

Senator Hatch? 

Senator HATCH. Well, thank you. 

Mr. Kieff, as you are no doubt aware, intellectual property is an 

important part of our U.S. economy. In my State of Utah, IP is the 

lifeblood of our industries, from information technology to the life 

sciences. As I mentioned in my opening, the ITC provides a vital 

tool for U.S. companies that face unfair competition from foreign 

imports that infringe their IP. 

Would you be kind enough to share your thoughts on the section 

337 process and what you would do to make it as effective as possible? 

Mr. KIEFF. Well, thank you, Senator. Those are really important 

areas, and I have enjoyed working on these issues for a long time. 

Certainly, if confirmed, I would work within the law at the time, 

given the particular facts of each case, to apply that law. I take it 

what you are asking for is a general overview, is that right? 

Senator HATCH. Well, really how you make it work better, and 

how you make that particular section as effective as possible. 

Mr. KIEFF. Yes. The Commission, with assistance from many others including the Federal Circuit, the body that reviews the Commission’s work, has worked to already start the process of improving procedures, to have them move faster, to look for ways to make 

them more efficient. And, as someone who has really enjoyed workVerDate Mar 15 2010 20:28 Sep 15, 2014 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 R:\DOCS\89658.000 TIMD
11 

ing on improving procedural efficiencies in different government 

roles in the past as an advisor, if confirmed I would really enjoy 

working with my colleagues at the Commission and with the Commission staff to continue that process. 

Senator HATCH. All right. 

In your testimony, you mentioned how important economic analysis provided by the ITC is to helping to explain the impacts of 

international trade on the U.S. economy. Can you tell us what 

steps you would take, if confirmed as an International Trade Commissioner, to ensure that the ITC provides Congress and the public 

with the best, most reliable economic analysis available? 

Mr. KIEFF. Yes. I think the short answer is that I would engage, 

sleeves rolled up, pen in hand, reading glasses on, working with my 

colleagues to really dive into the facts of those matters, because I 

think the Commission has a great staff that really has a tradition 

of engaging the serious economic issues. It would be fun for me to 

work with them. 

Senator HATCH. Can you share with us some of your thoughts on 

how the ITC can assist Congress and the administration to develop 

and implement effective trade policy to best benefit American manufacturers, farmers, and service providers? 

Mr. KIEFF. Yes. The Commission has their tradition of working 

with both the legislative branch and the executive branch to provide analysis and factual data to support you in your policy role. 

So I would continue that tradition, if confirmed. 

Senator HATCH. All right. To both of you Tax Court folks: you 

know you are going to be trying cases that are worth millions of 

dollars, and some that are worth hundreds; some that are for very 

wealthy people, some for people who are not so wealthy. 

As a Tax Court judge, I would like each of you to answer this 

question. Like I say, you are going to preside over many cases that 

involve unsophisticated taxpayers with few resources to deploy 

while making their cases. What lessons do you take from your prior 

professional experiences to ensure that you will treat these taxpayers with respect and understanding while stopping short of 

awarding them an advantage that they do not deserve? Mr. Thornton? 

Judge THORNTON. Senator Hatch, in the last 15 years I have 

been on the Court, I have been particularly impressed with the 

number of unrepresented taxpayers who come before our court. The 

Tax Court has a long tradition of trying to develop rules and procedures that are friendly to those taxpayers. 

I think our judges collectively have an attitude of trying to do 

what we can to assist those taxpayers. The Court is especially 

proud of our efforts to make sure that every taxpayer has an opportunity for access to justice through taxpayer clinics and pro bono 

programs. 

So I personally am committed to doing everything I can to assist 

taxpayers without becoming an advocate for the taxpayer, but at 

least trying to make sure they understand the procedure. Many of 

the taxpayers who come to the Court are very intimidated by the 

entire judicial process. Maybe they have never been to court before. 

I think part of our job is to try to set them at ease, try to help 

them understand what they need to do to comply with the Court’s 

12 

rules and procedures but, as you say, without becoming their advocate, but making sure they have an opportunity for access to justice 

as they might desire it. 

Senator HATCH. Well, thank you. 

Mr. Nega? 

Mr. NEGA. I do not think I can say it better than Judge Thornton, but I will say it slightly differently. I realize that the Tax 

Court experience might be the most important experience that each 

taxpayer has with the Federal Government, and I think it is important that you treat them with respect, but again without crossing 

over the line and becoming an advocate for a pro se taxpayer. So 

I think you just have to start each day trying to apply the laws 

fairly on each case. 

Senator HATCH. Well, thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Senator Thune? 

Senator THUNE. Thank you, Mr. Chairman. Mr. Chairman, I 

think we ought to have these nominees think that their confirmation is still in doubt until they answer these questions and make 

sure we get the right answers. [Laughter.] 

I want to direct this question to Mr. Thornton and Mr. Nega. I 

appreciate the fact that it may not be appropriate to comment on 

specific cases before the Tax Court, but I want to raise a recent 

Tax Court decision that caught my attention, and it was Morehouse 

v. IRS. The Court recently ruled that Conservation Reserve Program payments are subject to self-employment taxes, even where 

the individual receiving the payments is not actively farming the 

land. In this particular case, the individual inherited the land in 

my State of South Dakota, but he lived in Minnesota and was not 

actively engaged in farming. 

Yet, the Tax Court broke with prior decisions in finding that the 

taxpayer had to pay self-employment taxes on the CRP payments, 

whereas prior court decisions had found that a CRP participant 

needed to materially participate in the farming operation in order 

to be liable for any self-employment taxes. 

This decision causes concerns for a lot of reasons because, the 

heavier CRP payments are taxed, the less likely it is that owners 

of environmentally sensitive farmland will want to participate in 

this important conservation program, which will increase taxpayer 

liabilities under crop insurance and disaster programs by moving 

land into crop production as opposed to keeping it in CRP. 

So I guess I just would be curious if either of you have any views 

on this issue of whether these types or forms of payments, Conservation Reserve or CRP payments, should be subject to selfemployment tax in instances where the owner of the farmland is 

not actively—or is not considered, I should say—actively engaged 

in farming. 

Judge THORNTON. Senator Thune, I would address the question 

more generally, I suppose, by explaining the process of the Court. 

All the Court’s opinions are reviewed by the entire Court. We have 

19 active judges when we are fully staffed, and we all review all 

the decisions. 

In making that decision, we try to adhere the best we can to 

other judicial precedents. I believe in that particular case there 

13 

were other appeals court cases that the Court looked to. The Tax 

Court sits in 74 cities throughout the country, and cases are appealed in 12 different circuits, so we are bound to apply the law 

of that circuit wherever the case might arise. 

So it is those types of considerations that play into the Court’s 

decision, trying to make sure we are in the mainstream of the legal 

system, trying to be consistent with the jurisprudence of the appeals circuit in which the case originates. But I assure you that 

every case is decided only after very careful consideration by the 

entire Court of the particular facts of the case, the law of the case, 

and how the Court believes Congress intended the law to apply. 

As to the specifics of the outcome of this case, I am not in a very 

good position to comment on that, but that is the general process 

by which we try to decide all our cases. 

Senator THUNE. Anything to add, Mr. Nega? 

Mr. NEGA. I have to admit that I am not familiar with the facts 

of the case, so I am really not in a position to respond at this point. 

Senator THUNE. All right. I understand. Like I said, it is a pending case. But I just think, in terms of tax principle, tax policy, the 

payroll tax, self-employment tax, is a Federal tax and, in the past, 

has never been applied unless there was material participation in 

a farming operation. This is a pretty important precedent for a lot 

of reasons, like I said, one of which is that we are doing everything 

we can to keep some of these environmentally sensitive lands in 

the CRP program. 

This is yet another disincentive toward that, if those who own 

farmland—perhaps are not materially participating in its operation 

but are benefitting from the CRP payments—are assessed selfemployment taxes. That is obviously a tax consequence that is 

going to affect the decision that they make, the economic decision, 

about whether or not to keep it in the program. So, just put it on 

your radar screen if nothing else. 

Mr. Kieff, the ITC has many important functions. The Commission has recently received a good deal of attention around these 

337 cases which you mentioned, which are cases where one party 

is asking the Commission to issue an order stopping the importation of another company’s product. 

As you know, these cases often involve high-tech companies that 

find themselves at odds over patent disputes. Given your expertise 

in this area, I would be curious to know if you believe the ITC process for considering these cases is currently working, or if these 

cases would not be better suited to district court, where monetary 

damages could be awarded, as opposed to these exclusion orders. 

Mr. KIEFF. Thank you, Senator. I think you are absolutely right 

that these are important issues and that they do have impact. The 

Commission has a tradition of wrestling with these issues pretty 

well, and, like many things in life, it can be improved, and the 

Commission has taken steps to find ways to help resolve disputes 

quickly that really should not be in the dispute process. 

So, there is a faster way to make earlier decisions in the matter, 

when it just seems like there really is no dispute, no genuine dispute. That is a tool that district courts have. They have rule 12, 

they have rule 56. The Commission has developed its versions of 

those approaches, and so far those seem to be meeting with good 

14 

results. Other techniques can be tried as well, and I would enjoy 

working with my colleagues to help do that, if confirmed. Ultimately though, it is up to this body and the Congress and the 

President to decide whether the Commission has this role. 

Senator THUNE. Yes. Do you think, though, that these cases are 

better suited to district courts, where you can have actual monetary damages awarded as opposed to the outcomes, the reliefs, that 

are allowed for under your jurisdiction? 

The CHAIRMAN. Let me just break in here. You can continue as 

long as you want, Senator. I must leave right now. There is a vote 

occurring right now too. But it is up to you. You can speak as long 

as you want, but I just—— 

Senator THUNE. Do you want me to just gavel us out, or are you 

coming back? 

The CHAIRMAN. You can gavel us out. Yes. I am not coming back; 

I cannot. 

Senator THUNE. So I should pronounce them confirmed? [Laughter.] 

I am sure they might appreciate that. 

The CHAIRMAN. You could tell them that we are going to schedule a vote on their confirmation as quickly as we possibly can. 

Senator THUNE. All right. Thank you, Mr. Chairman. 

Judge THORNTON. Thank you, Mr. Chairman. 

Mr. NEGA. Thank you, Mr. Chairman. 

Mr. KIEFF. Thank you, Mr. Chairman. 

Senator Thune, please. 

Senator THUNE. Well, yes. I was just going to ask you again to 

give me your thoughts about whether or not these cases are better 

suited for district court. 

Mr. KIEFF. Yes. So I think that there is a lot of interesting work 

that has been done to analyze how district court proceedings, on 

their own terms, work, how Commission proceedings at the ITC 

work. There seems to be a pretty good consensus that there are a 

lot of pluses and minuses to both venues and to both types of remedies. So the district courts, as you point out, have the remedies 

available, damages and injunctions, and the ITC has its remedy 

available, the exclusion order. Those really are different things. 

My understanding, having really enjoyed working on these issues 

for a very long time in each of those settings, is that there are 

pluses and minuses to each of them, which then means trade-offs 

have to be made. Those are ultimately policy questions. 

Senator THUNE. All right. 

Do you guys have anything? 

[No response.] 

Senator THUNE. I guess that is a wrap. Thank you all very much. 

This hearing is adjourned. Thanks. 

[Whereupon, at 3:30 p.m., the hearing was concluded.] 

(15) 

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