Document: 475 U.S. 851 106 S.Ct. 1600 89 L.Ed.2d 855 Marie D. SORENSON, etc., Petitionerv.SECRETARY OF the TREASURY UNITED STATES and United States. No. 84-1686. Argued Jan. 15, 1986. Decided April 22, Syllabus The Internal Revenue Code (IRC) allows an individual responsible for support of a child living with him credit against income taxes due equal to certain percentage so much earned as does not exceed specified amount. If exceeds tax liability, excess is considered "an overpayment" under IRC § 6401(b). Section 6402(a) provides refund "any person who made it. 6402(c) requires amount be reduced by any past-due child-support payments assigned State. 464 Social Security Act (SSA) directs Secretary Treasury "intercept" refunds payable persons have failed meet obligations that been When petitioner's husband fell behind in previous marriage was custody his former wife, latter, upon applying welfare benefits from State Washington, State, required Aid Families Dependent Children program, her right collect unpaid payments. Petitioner husband, had their own dependent them, filed joint federal return 1981 which all attributable wages unemployment compensation they anticipated based part on earned-income credit. Service, however, notified them being retained, authority tax-intercept law, would paid over Washington. then class action Federal District Court, seeking declaration SSA did reach Court granted summary judgment Government, Appeals affirmed. Held: An can properly intercepted applicable statutes. Pp. 859-865. (a) IRC's treatment credits supports Government's position. refundability inseparable its classification overpayment tax. It "overpayment" only purposes 6402(a), but also 6402(c). Eligibility depend individual's actually having refunded similarly independent payment. To extent "payable" individual, it if were paid. 859-863. (b) There no claim Congress intend program credits. Although never mentioned enacting Omnibus Budget Reconciliation 1981, added IRC, must aware, when provided shall support, this include And, although goals credit—to reduce disincentive work caused income, stimulate economy funneling funds likely spend money immediately, provide relief low-income families hurt rising food energy prices—are important, cannot said concluded outweigh served subsequently enacted program—securing absent parents reducing number welfare. 863-865. 752 F.2d 1433 (CA 9 1985), BLACKMUN, J., delivered opinion BURGER, C.J., BRENNAN, WHITE, MARSHALL, powell, REHNQUIST, O'CONNOR, JJ., joined. STEVENS, dissenting opinion, post, p. 866. Peter Greenfield, Seattle, Wash., petitioner. Richard Farber, D.C., respondents. Justice BLACKMUN Court. 1 direct obligations. In case, States Ninth Circuit ruled involving could intercepted. (1985). We certiorari, 472 1016, 105 3475, 87 611 (1985), because ruling conflict decisions Courts Second Tenth Circuits. See Rucker v. Treasury, 751 351 (CA10 1984); Nelson Regan, 731 (CA2), cert. denied sub nom. Manning Nelson, 469 853, 175, 83 110 (1984). 2 * A. 3 Stanley Sorenson, petitioner legally obligated make wife. Mr. Sorenson unemployed disability those His wife applied Since 1975, (AFDC) has required, condition eligibility, applicants assign concerned accrued at time assignment. Pub.L. 93-647, 101(c)(5)(C), 88 Stat. 2359, 42 U.S.C. 602(a)(26)(A).1 Thus, Sorenson's turned make. 4 them. They thus potentially eligible receive For calendar year relevant lawsuit, 43 1954, amended, allowed "as imposed . taxable 10 percent $5,000." As taxpayer's increased, decreased, reaching zero adjusted gross reached $10,000.2 5 Unlike other credits, used off-set otherwise owed, "refundable." "considered 6401(b), read, 1954 Code.3 Subject setoffs, or it.4 entitled he owes thereby receives difference overpaid B 6 February 1982, timely 1981. worked during year, family benefits. By filed, Sorensons $1408.90, consisting withholding $1,132 Washington Declaration Exh. B, C82-441C (WD Wash.). 7 law essentially give priority State's recoupment see 402(a)(26)(A) Act, 602(a)(26)(A), overpayment. Code. intercept originally (OBRA), 97-35, 2331, 95 860. First, OBRA 2331(a) 664. That section Secretaries Health Human Services establish scheme notify owe it, tax-refund persons: 8 "Upon receiving notice agency administering [an AFDC plan] named such pursuant 402(a)(26), determine whether amounts, paid, are (regardless married unmarried individual). finds payable, withhold pay (together home address) distribution accordance 457(b)(3)." 464(a), 664(a).5 2331(c) amended new subsection provision governing Treasury's overpayments taxpayers. subsection, 6402(c), taxpayer owed remit withheld State: "The making (as defined 464(c) Act) Act. necessary satisfy obligation This prior credited person's future liability internal revenue tax." C 11 After negotiations concerning status community property Washington—issues germane question now presented Court—the ultimately half increment claimed. Western seeking, among things, rejected Secretary's jurisdictional arguments, renewed appeal pressed Brief Respondents 5, n. 1. But agreed arguments merits Government. 557 F.Supp. 729 (1982). 12 affirmed judgment. (CA9 1985). statutory construction held that, since expressly "overpayments," disbursed recipients through process, "payable 'as ' paid" therefore Id., 1441 (emphasis original). broad terms amounts" gave indication intended exclude these terms. 13 argument position conflicted Congress' intention poor legislative history suggest primarily type grant; rather, meant negate taxes. lump sum, more like withholding, clearly reachable than wages, portion exempted assessment collection process. F.2d, 1443, Second, exempt done expressly. Instead, process might "In face rather clear mandate," Appeals, "we conclude we free speculate otherwise." 1443. II 14 advances two she claims language structure interlocking provisions up reach: neither "overpayments" nor "refunds paid," items subject interception. permitting interception frustrate aims providing credit, find persuasive. 15 Code's entitlement 6401(b) defines "overpayment," 6402 mechanism disbursing overpayments, namely, acknowledges general authorizes refunds. 4, supra. not, lack authorization refunding her. She claims, while "amount support" 16 normal rule assumes " 'identical words different parts same act meaning.' Helvering Stockholms Enskilda Bank, 293 84, 87, 55 50, 51, 79 L.Ed. 211 (1934), quoting Atlantic Cleaners & Dryers, Inc. States, 286 427, 433, 52 607, 609, 76 1204 (1932). includes explicit definition subchapter strengthens presumption. And both subsections concern "overpayment[s]" especially damaging "the words, though act, found dissimilar connections warrant conclusion employed intent." U.S., S.Ct., 51. 17 excluded offer bases believe limits 6401(b)' "by [using] phrase 'overpayment overpayment.' 111; 356. Not suggest, "made" some—those credits—may disagree. All overpayment." merely identifies refund; restrict nature itself. characterize herself overpayment; otherwise, Circuits relied virtually identical 6402(a). limiting effect proposes justification exists giving 18 perceive tension between 6401(b)'s 6402(a)'s 464(a)'s interceptable amounts. sections, simultaneously OBRA, should harmonized §§ 357; 111. 19 second argument, seems us, misperceives manufactures need exist. OBRA's placement regarding Acts reflects division functions. lies intersection Act's Subchapter IV, Part D, chapter 65, A, addresses concerns received AFDC-related grants. procedures recover aid control recouping support. Sections 6401 address operation define set refunds, divert amounts regulates relationship claimants, 6402, governs state agencies. 20 Petitioner, views 6402(c)'s reference indicating 464(a) read into limitation powers. depends somewhat strained statement "[t]he Act." 'in Act' do modify 'has State,' one initially assume. Rather belatedly 'shall reduced.' 18. view, lead represents permits. 21 disagree reading 464(a). far plausible nearest verb. given natural reading, classified notified. 22 even refer solely 464(a),6 nothing exempts recast meaning contending "refun[d] permits "amounts, paid": 23 "A repayment liability. return, eligibility contingent payment 24 just tax, Cf. 6401(c). correctly 1441. best understood directive follow established calculating attempt implicitly redefine special 25 Nor agree Government OBRA. 24; Tr. Oral Arg. 21. defies belief unaware, added), previously Code—the immediately preceding provision.7 26 What really claiming narrowly avoid frustrating program. imposition (welfare taxed), prices.8 Each undeniably important objective. impossible, us say whenever possible welfare.9 course compelling involved either non-AFDC families. equally decided pressing alleviate "devastating consequences children taxpayers" epidemic nonsupport. Hearings before Senate Committee Finance Spending Reduction Proposals, 97th Cong., 1st Sess., pt. 1, 34 (1981) (statement Schweiker).10 27 ordering competing social policies quintessentially function. light decision refundable taxpayer, refused "speculate Its judgment, accordingly, 28 ordered. dissenting. 29 benefit creating "Earned Income Credit" Program 1975 composed entirely families.1 fairly described legislation: 30 security prices." Ante, 864. 31 funneled treat taxes, "refund" hypothetical relatively obscure rise particular difficulties ensuing six years. 32 principal beneficiaries Intercept what appropriately called governments unable enforce departed parent's real adversaries case Sorensons—a family—on hand, other, will Court's holding. original Earned Credit treasuries governments. Notwithstanding careful admittedly accurate parsing statute, I am persuaded intent. 33 confidently asserts "it unaware" impact ante, 863. pause tell why, so, mention change point With respect our hardworking neighbors Congress, think belief" assume substantial legislators sufficiently familiar realize somewhere vast piece hurriedly legislation there changed 6-year-old Program.2 faithful grammar. persuaded, intent accept statutes adopted 351, 356-357 105, 110-112 respectfully dissent. assignment rights applicant may (i) behalf member whom aid, (ii) executed." Tax Reform 1984, 98-369, 471(c)(1), 98 826, redesignated 32. 1042 1043, raised percent, maximum $500 $550, ceiling $10,000 $11,000. At provided, pertinent part: "If allowable sections (relating wages), 39 uses gasoline, fuels, lubricating oil), credit), subtitle A (reduced subpart IV 31, 39, 43), 1984. 474(r)(36) 846, designated existing 6401(b)(1) substituted following quoted above: credits) subparts D IV), remains revised provision, within category "refundable credits." 471, 825. version provided: overpayment, Secretary, period limitations, including interest thereon, shall, (c), balance person." scope (c)—the offset 2653(b)(2) 1155, Under authority, after December 1985, January 1988, 2653(c) 1984 1156, restricted (d) well (c) 6402. 2653(b)(1) 1154, (d). 6402(d) debts various 6402(d)(2), covered 6402(d). Child Support Enforcement Amendments 98-378, 21, 1322, authorized diversion additional procedural protections claimants whose specific earlier particularly referred "in 464(a)" entire identifying notifying out 464. viewed immune seizure suggested factors well. notes, once payment, proceeds refund, reflect component, levy 6305 fact cumbersome procedure, 23-25, economic inefficiency locating pursuing $550 so. certainly spouse precluded employing judicial attach seize recipient See, e.g., S.Rep. 94-36, pp. 11, (1975); H.R.Rep. 94-19, 3-4, 29-31 H.R. 2166 Finance, 94th 66, 315 House Ways Means President's Authority Adjust Imports Petroleum; Public Debt Ceiling Increase; Emergency 661, 742-743, 797 121 Cong.Rec. 4609 (1975). 98-387, 5-8 (1984); 19, 34-35, 81, 312 (1981); Aspects Economic Program, 159, 237 (1981). Even sole neediest involved, households needier claimed end (an can, 3507 Code, advance year), go currently needy. example, child, most $5,000, job paying $20,000 per able 1982 $500, despite late spring check arrived, longer 8861 (1975) (remarks Sen. Long). "Smoking big cigar, Speaker [of Representatives] got angry again slap-dash quality bill [that became 1981], photocopied memorandums, handwritten last minute, some final hastily crossed whorls pencil marks. "But smiled, too, noting cryptic accidental entries name phone number—'Ruth Seymour, 225-4844'—standing alone appropriation item." N.Y. Times, July A16, col.

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