Opinion ID: 544586
Heading Depth: 2
Heading Rank: 3

Heading: Tax Exemption Interpretation

Text: 26 All of appellants' arguments must be evaluated in light of the principle that a claim for exemption must rest upon language in regard to which there can be no doubt as to its meaning, and that the exemption must be granted in terms too plain to be mistaken. Bank of Commerce v. Tennessee, 163 U.S. 416, 423, 16 S.Ct. 1113, 1116, 41 L.Ed. 211 (1896); see also United States v. Wells Fargo Bank, 485 U.S. 351, 354, 108 S.Ct. 1179, 1181, 99 L.Ed.2d 368 (1988) (exemptions from taxation are not to be implied; they must be unambiguously proved). In this light, appellants' arguments by implication and analogy are unpersuasive. 27 In United States Trust Co. v. Helvering, 307 U.S. 57, 59-60, 59 S.Ct. 692, 693, 83 L.Ed. 1104 (1939), the Court held that a provision of the World War Veterans' Act, Pub.L. No. 24-242, 43 Stat. 607, 613 (1924), and its amendments, exempting War Risk Insurance proceeds from all taxation did not prevent the imposition of estate taxes on the payment of such proceeds because estate tax is levied on the transfer and not on the proceeds themselves. The Court refused to reason by implication to find an exemption from estate taxes. Id. 28 Helvering v. Northwest Steel Rolling Mills, Inc., 311 U.S. 46, 61 S.Ct. 109, 85 L.Ed. 29 (1940), concerned a surtax on undistributed corporate profits. The statute creating the surtax contained an exemption from the surtax for corporations that would violate the terms of written contracts by distributing dividends. The Supreme Court refused to extend this exemption to a corporation that was prevented by state statute from making such distributions. The Court stated that provisions granting special tax exemptions are to be strictly construed. Id. at 49, 61 S.Ct. at 111. 29 Here appellants have conceded that under the usual common law test for employee Matthews and Davis are employees of the United States or its agencies. Thus their claim is similar to those rejected in the Supreme Court cases cited above: they seek an implicit exemption from taxation in statutory language that read plainly does not exempt them. 30 Absent indications to the contrary, the courts have used the common law test for employee in tax cases. Where Congress has intended to use employee or employment differently, it has often gone to great lengths to explain the manner in which it wishes those terms defined. Indeed the provision upon which appellants most strongly rely, 5 U.S.C. Sec. 2105(c), is but one of a series of definitions of employee for certain various purposes. For example, 5 U.S.C. Sec. 2105(b) deems employees of the United States Naval Academy laundry to be employees of the United States, but does not so deem employees of the Academy dairy. Section 2105(c) generally states that NAFI personnel are deemed not to be employees for the purposes listed, but itself contains numerous exceptions, suggesting that Congress initially understood NAFI personnel to be employees of the United States and then picked and chose the situations in which it wished NAFI personnel to be treated as other than government employees. See also I.R.C. Sec. 3121(b) (defining employment for FICA purposes). Had Congress intended a departure from the traditional use of the common law test in section 911 it could just as easily have specified its intentions there. 31 Appellants can show nothing specific in the statute or its history to indicate that they were to benefit from the exclusion in section 911. They have picked from among the many statutory, regulatory, and case-law provisions defining employee a few that for nontax purposes define employee of the United States to exclude NAFI personnel and then argue that we should adopt such a definition for section 911 purposes. Obviously the rule requiring specific language to support an exemption from taxation prohibits us from adopting this interpretation.