Tax Court Modernization Act

Permits the Tax Court to assign proceedings to decide small employment tax dispute cases to special trial judges.

Confirms that the Tax Court may apply the doctrine of equitable recoupment to the same extent that it is available in civil tax cases.

Permits the Tax Court to charge up to a $60 fling fee in all cases commenced by the filing of a petition.

Permits the Tax Court to establish its own personnel management system and establishes system requirements.

Permits Tax Court practitioner fees to be used to provide services to pro se taxpayers.

Revises provisions concerning annuities for survivors of Tax Court judges.

Provides for FEGLI participation for Tax Court judges.

Authorizes payment of FEGLI premium increases for judges over age 65.

Entitles a judge employed by the Executive Branch before appointment to the Tax Court to a lump-sum payment for the balance of accrued annual leave on appointment to the Tax Court.

Permits Tax Court judges to participate in the Thrift Savings Plan, but prohibits agency contributions.

Exempts, from outside earned income limitations, compensation to retired judges for qualified teaching activities.

Permits the chief judge to appoint and reappoint magistrate judges (currently, special judges) of the Tax Court for eight year terms.

Permits magistrate judges to elect to participate in the Tax Court survivor annuity plan.

Establishes a retirement and annuity program for magistrate judges.

Makes special retirement annuity provisions for incumbent magistrate judges.

Establishes rules for the recall of retired magistrate judges.