Taxing Justices’ Gift Receipts

Hyatt Regency Denver at Colorado Convention Center 

Last year, investigative journalists reported multiple occurrences where billionaires showered Supreme Court Justices with lavish gifts. Previously undisclosed luxury fishing trips, private jet travels, and yacht cruises, reignited popular and scholarly debates about Congress's role in regulating Justices' conduct. This article sheds light on an existing, yet often overlooked, instrument to regulate Justices' receipt of gifts: income taxation. The article makes the following contributions:
First, it shows that under current law many of the "gifts" uncovered in recent press stories, are – very likely – taxable income to the Justices. If the Justices did not report and pay tax on some of these gifts, they should be audited, and potentially subject to enforcement actions prescribed by the Internal Revenue Code.
Second, the article explains how income taxation of gifts can serve as a backstop for judicial misbehavior where the primary laws and guidelines on judicial ethics fail. Some (including a few of the Justices) argue that there is no constitutional basis for Congress to enforce limits on Justices' gift receipt and reporting. There is no such question in the context of taxation. Congress clearly has constitutional authority to require, and current law clearly demands Justices to report certain receipts on their income tax returns.
Third, the article explains when, as a policy matter, income taxation should be used to regulate Justices' behavior, and considers several tax law reforms – all clearly within Congress's constitutional power – to further improve income taxation as a last line of defense against judicial misconduct. Specifically, the article offers (1) to narrow the definition of tax exempt "gifts" when received by Justices, (2) to mandate annual audits of Justices' tax returns, and (3) to mandate the disclosure of Justices' tax returns.