Is a Senate-confirmed presidential appointee exempt from D.C. income tax when the President can remove the officer only for cause?

Plain-English summary

A Senate-confirmed presidential appointee who could be removed only for cause did not qualify for D.C.'s special residency exception for federal officers serving at the President's pleasure.

The officer lived in the District for at least 183 days during the year. D.C. law generally treats a person maintaining a D.C. abode for 183 days or more as a resident. The statute excludes certain presidentially appointed, Senate-confirmed executive officers—but only when their tenure is at the pleasure of the President and they are not domiciled in the District.

OTR treated “at the pleasure of the President” as an at-will relationship. Because the governing federal law allowed removal only for cause, the officer did not meet that condition and was a D.C. resident subject to District income tax.

What this means for you

Federal executive-branch officers

Presidential appointment and Senate confirmation are not enough by themselves. The removal rules governing the office matter: a fixed-term officer protected by a for-cause removal standard does not serve at the President's pleasure under this ruling.

Tax professionals

Analyze all parts of the exception in D.C. Official Code § 47-1801.04(17), including appointment, Senate confirmation, removal tenure, and domicile. The ordinary 183-day residency rule applied when the removal-tenure condition failed.

Common questions

Did Senate confirmation make the officer exempt? No. The exception also required service at the President's pleasure.

What does “at the pleasure of the President” mean here? OTR treated it as service on an at-will basis, in contrast to an officer removable only for cause.

Why was the officer treated as a D.C. resident? The officer maintained a place of abode in the District for at least 183 days and did not qualify for the presidential-appointee exception.

Would domicile matter for an officer who otherwise qualified? Yes. The quoted statutory exception does not protect a qualifying officer who is domiciled in the District during the taxable year.

Citations and references

• D.C. Official Code § 47-1801.04(17) — D.C. residency rule and presidential-appointee exception.
• SEC v. Blinder, 855 F.2d 677, 682 (10th Cir. 1988) — distinction between service at the President's pleasure and removal only for cause.
• United States v. Wilson, 290 F.3d 347, 350 (D.C. Cir. 2002) — fixed terms and for-cause removal discussed by OTR.
• 42 U.S.C.S. § 1975(c) — six-year terms for Civil Rights Commission members, discussed in Wilson.

Source

• Landing page: https://otr.cfo.dc.gov/page/otr-tax-rulings
• Ruling page: https://otr.cfo.dc.gov/node/402362
• Original PDF: https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/otr_revenue_ruling.pdf

Original ruling text

GOVERNMENT OF THE DISTRICT OF COLUMBIA
OFFICE OF THE CHIEF FINANCIAL OFFICER
OFFICE OF TAX AND REVENUE

OTR REVENUE RULING 2007-02
Subject: Presidential Appointee Exception
Advice has been requested as to whether an officer of the executive branch of the
U.S. government who was appointed by the President of the United States is subject to
District of Columbia (“District”) income taxes under the following facts:
FACTS
Taxpayer is an officer of the executive branch of the U.S. government who was
appointed by the President of the United States. The officer’s appointment was
confirmed by the Senate. According to the federal act which governs the officer, the
officer holds office for the designated term, unless removed before the end of the term for
cause by the President. The officer resides in the District for 183 days or more during the
taxable year.
ISSUE
Does an officer of the executive branch of the U.S. government under the above
facts serve at the pleasure of the President of the United States, so that the officer is not
considered a District resident for income tax purposes under D.C. Official Code § 471801.04 (17)?
CONCLUSION
An officer of the executive branch of the U.S. government under the above facts
does not serve at the pleasure of the President of the United States because the officer can
only be terminated for cause; therefore, the officer would be considered a resident of the
District and subject to District income tax.
LEGAL ANALYSIS
Under D.C. Official Code § 47-1801.04(17), individuals who “. . . maintain a
place of abode within the District for an aggregate of 183 days or more during the taxable
year, whether or not such other individual is domiciled in the District,” are subject to
District income taxes.

1

However, D.C. Official Code § 47-1801.04(17) provides an exception for:
[A]ny officer of the executive branch of such government whose
appointment to the office held by him was by the President of the United
States and subject to confirmation by the Senate of the United States and
whose tenure of office is at the pleasure of the President of the United
States, or any Justice of the Supreme Court of the United States, unless
such officers or Justices are domiciled within the District at any time
during the taxable year. In determining whether an individual is a
"resident", such individual's absence from the District for temporary or
transitory purposes shall not be regarded as changing his domicile or place
of abode. (emphasis added).
The federal act which governs the officer in the instant case provides that the
officer holds office for the designated term, unless removed before the end of the term for
cause by the President. Case law, in effect, interprets the phrase “at the pleasure of the
President” as serving at the appointed position on an “at-will” basis. See generally, SEC
v. Blinder, 855 F.2d 677, 682 (10th Cir. 1988). In Blinder, the court analyzed the
constitutionality of the Securities and Exchange Commission’s (“SEC”) power to
commence a civil enforcement action in federal court. According to the Securities
Exchange Act of 1934, the SEC consists of five members who are appointed by the
President with the advice and consent of the Senate. Id. at 681. The act does not provide
for the appointment of a chairman; however, following the Reorganization Act of 1949,
the President could designate the chairman. The act does not contain language which
expressly allows the President to remove the commissioners. However, for the purposes
of the case, the Blinder court, accepted appellant’s argument that “the President may
remove a commissioner only for efficiency, neglect or duty or malfeasance in office”
(internal quotations omitted). Id. The court concluded that “as the President has the
power to choose the chairman of the SEC to serve an indefinite term, it follows that the
chairman serves at the pleasure of the President.” Id. Contrarily, “the President has the
power to remove a commissioner [only] for inefficiency, neglect of duty, or malfeasance
in office.” Id. The court in SEC v. Blinder clearly outlines the distinction between
appointees who serve at the President’s pleasure (SEC chairman) and those who can only
be terminated for cause (SEC commissioners).
US v. Wilson, 290 F.3d 347, 350 (D.C. Cir. 2002), further illustrates the contrast
between appointees who serve at the pleasure of the President and those who can only be
terminated for cause. In U.S. v. Wilson, former President Clinton appointed appellee to
the United States Commission on Civil Rights expressly stating that the appointment was
“for the remainder of the term expiring November 29, 2001.” Id. at 350. Under 42
U.S.C.S. § 1975(c), all commissioners were required to be appointed for six years,
irrespective of whether their predecessors had completed their terms or not. President
Bush appointed another commissioner to succeed appellee following November 29, 2001.
The court held that appellee’s term had in fact expired on November 29, 2001 and “that
the fixed terms of six years for members of the Commission ran with the calendar
regardless of delay in appointment or the filling of mid-term vacancies.” Id. at. 361.

2

Although U.S. v. Wilson primarily analyzes the distinction between appointment
terms which run with the person and those which run with the calendar, the court noted
that:
The US Commission was first created in 1957, and as originally
established was composed of six members serving open-ended terms at the
pleasure of the President. Congress reauthorized and reorganized the
Commission in 1983 by ( . . . ) dividing the appointment power between
the President and Congress [and] establishing that the President could only
remove members for neglect of duty or malfeasance.
Id. at 350.
Congress clearly sought to differentiate between appointments where members
served at the will or pleasure of the President and those that could only be removed for
cause.
Similarly, here, the governing federal act divides the appointment power between
the President and Congress by requiring that the President establish cause before
removing an officer. As the officer can only be removed from office for cause, the
officer is ineligible to benefit from the Presidential appointee exception, which requires
that the appointee serves at the pleasure of the President. Thus the appointee would be
considered a resident and subject to District taxes.

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