Court Opinion

ID: 8595693
Source: CourtListenerOpinion
Date Created: 2022-11-23 16:02:53.557733+00
Date Added: 2024-06-11T16:54:55.161108
License: Public Domain

Nichols, Judge,
concurring:
I join in the decision and in Judge Kunzig’s opinion, except that I take exception in particulars that are stated below, which seem to me important.
*681. Certainly an administrative decision loses much of its weight on judicial review if no reasons for it are given. However, it may expressly or by implication adopt the prevailing party’s statement. Here the Civil Service Commission has, I think, adopted as its own, 'by implication, IRS Commissioner Alexander’s letter protesting the BAR decisions concerning Boyce and Dixon. If we are to fault a lack of reasons for the CSC decision, we cannot ignore the articulation given in that letter.
2. I am' not much impressed with the fact that plaintiffs relied on their husbands to prepare and file joint tax returns. They had actual notice their husbands could not be relied on to file returns on time. Dixon had a reprimand in her file on this account, though it was not considered in assessing the penalty. The BAR, however, mentions it. The Alexander letter says Boyce was the sole support of her family, for which she assumed full financial responsibility. Though some might read this as an argument for Boyce, it does to some degree undermine her right to rely on Mr. Boyce. She received the W-2’s, the usual signal to prepare a return.
3. Mr. Alexander ignores the fact that so many of the returns were refund returns. In my view, an assessment of the actual and potential loss of revenue would be an indispensable component of an informed and reasoned decision on the penalty in this kind of case.
4. I question the propriety of lumping into the charges, without distinction, delinquencies in filing Federal and State returns. 'It is up to the States to enforce their own tax laws. If state taxes are not paid, taxpayers cannot take deductions for them on Federal returns. The two types of infringements are not the same. To lump them together in the charge makes a superficial impression of utter lawlessness, which a better acquaintance with the State’s assessment and collection procedure perhaps might in large measure dispel.
5. The BAR makes what appears to me a valid point: though employees were warned they must satisfy their tax obligations, and that the agency will discipline them if they don’t, there is no express warning in the involved Bulletins that dismissal will be the automatic penalty, always or in any specified kind of case. The issue is, therefore, not like Heffron *69v. United States, 186 Ct. Cl. 474, 405 F. 2d 1307 (1969) wherein we upheld a severe penalty, dismissal, for a relatively minor offense, in part because the employees had all been warned by circular, only two months before the violation, that there would be no second chance; dismissal would follow even a first offense. For the BAB, or us to hold for the employee there would have been to pull the rug from under management’s feet. Likewise in Birnholz v. United States, 199 Ct. Cl. 532 (1972), the plaintiff had received warnings committing the agency to a severe reaction in case he offended again. In contrast, Mr. Alexander is weak on this issue, alleging that Boyce’s offense is the most aggravated ever encountered in an appeal to the Commission (a matter of judgment, surely) and that employees had ample notice not to commit it, but not answering the BAB’s specific point. He does not assert that every tax delinquency demands removal. If the offenses do not appear as relatively horrendous to others as they do to Mr. Alexander, his argumentative structure loses its linchpin, where as in Heffron this issue was virtually mooted.
6. The really vital controversy between the BAB and Mr. Alexander is that the former concedes — as all must— the need for a particularly high standard of conformity to tax laws by IBS employees in managing their personal finances, but does not extend it to Boyce and Dixon because they “had no contact with the public.” Presumably, therefore, for them the standards are those which any Government agency might reasonably demand of GS-2 and GS-3 employees. Mr. Alexander says the same rigid standards apply to GS-2 and GS-3 file clerks in the IBS as to GS-11 agents because they work “in a direct support of those employees who do contact the public.”
The “meets the public” canon does not appear to me as reasonably defining the proper line between the high IBS standard and the lower, though still demanding one, applicable to those employed in more neutral activities. Meeting the public is a duty, not a privilege, and there are some high ■ranking persons in the IBS, I believe, who do not normally meet the public in course of doing their jobs. The damage one of these would cause, if he were known to be habitually tax *70delinquent, would not be less. Whether tax delinquency by an IRS employee produces an adverse public reaction, destructive of the agency’s capacity to perform its mission, does not depend on and is not confined to the persons he actually meets in line of duty. Cf. Wathen v. United States, 208 Ct. Cl. 342, 368, 527 F. 2d 1191, 1207 (1975), cert. denied, 429 U.S. 821 (1976).
On the other hand, even in Mr. Alexander’s eyes there are apparently some IRS employees who do not come under the rigid standard because they neither meet the public nor work in support of those who do.
Both contenders appear to me too mechanical and simplistic in the rules they would apply. The public would form an adverse judgment on the entire agency and the program it administers, from the tax malfeasance of an individual, or would not do so, depending on the individual’s rank in the IRS, his pay, his experience, the extent to which the agency relies on his honesty, his performance of discretionary functions, and his exercise of professional judgment. Not just meeting the public, but having transactions on the agency’s behalf with members of the public, would be another factor, no doubt. The public would not draw the same conclusions from the delinquencies of Boyce and Dixon, and from similar ones which, in a purely hypothetical case, might be committed by a couple of deputy commissioners. Mr. Alexander himself, one surmises, would not listen with patience to a deputy commissioner, caught in -flagrante delicto, who might tell him the penalty should not depend on rank, but should be for him the same as for a GS-2 clerk.
7. I recognize our recent holding in Wathen, supra, that “efficiency of the service” is for agency definition, but that case of course does not impair authority of the cases Judge Kunzig relies on, that an extreme disproportion between offense and punishment is an abuse of discretion and will be reversed as illegal. Mr. Alexander’s stated rule requiring disregard of the most relevant factors in fixing the penalty of an IRS employee for tax delinquency is itself arbitrary and capricious and makes arbitrary and capricious any CSC decision that relies upon it.
*718. Of course I agree that some disciplinary action was necessary as both Boyce and Dixon had committed serious infractions of the rules of conduct. The suspensions proposed by the BAR seem reasonable. The Commission was arbitrary and capricious in reversing the BAR for the improper reasons, suggested to it in the Alexander letter, whether or not it might have done so for proper ones. I agree that nothing we hold is intended to contravene the discretionary authority of the Commissioner of Internal Revenue to administer an appropriate penalty such as the BAR originally prescribed.