Court Opinion

ID: 9473467
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:30:47.864235+00
Date Added: 2024-06-11T17:43:32.998369
License: Public Domain

ALDISERT, Chief Judge,
dissenting.
The Republic will still stand even though this court is divided on what constitutes a deductible bequest for estate tax purposes in a very narrow provision of the Internal Revenue Code of 1954. The majority reasonably interprets 26 U.S.C. § 2055(a)(2) and concludes that a bequest to a non-profit cemetery is not deductible for estate tax purposes. I am not inclined to join in their acceptance of the government’s position, because I have not been persuaded that there is a rational justification for this paradox:
* A contribution to a non-profit cemetery is deductible for income tax purposes if you make it during your lifetime.
* A contribution to a non-profit cemetery is not deductible for estate tax purposes if you make it by bequest in a will.
The government admits that this does not make much sense. The government concedes that there is no identifiable public policy justification for the distinction. Nevertheless, the government argues that because Congress created this anomaly, Congress also must eliminate it.
The centerpiece of the government’s argument is that Congress has enacted a special income tax deduction for contributions to non-profit cemeteries. 26 U.S.C. § 501(c)(13). From this, the government would have us conclude that in 1954 it was the Congressional intention, at that time, to include a deduction for income tax purposes, but not for estate tax purposes.
My own research into the legislative history of the Code, however, indicates that there was no discussion that Congress intended to exclude the deduction for estate tax purposes in 1954. The point simply was not discussed, and at oral argument, the government conceded as much. I agree that § 501(c)(13) was an attempt to clarify the general charitable deduction provision of 26 U.S.C. § 170(c)(2)(B) (contributions to a corporation organized and operated exclusively for charitable purposes) which is the income tax counterpart to the estate tax statute under interpretation in these proceedings (bequests to a corporation organized and operated exclusively for charitable purposes).
*288I believe, however, that the 1954 omission for estate tax purposes was a technical drafting oversight, and I argue that the inaction of Congress cannot be construed as an expression of congressional intent when interpreting the meaning of “charitable purposes” in § 2055(a)(2) which, it must be emphasized, is our primary responsibility today.
Thus, I go back to the language of the general estate tax statute we are called upon to construe. Like District Judge McCune, I turn to the latest teachings of the Supreme Court set forth in Bob Jones University v. United States, 461 U.S. 574, 103 S.Ct. 2017, 76 L.Ed.2d 157 (1983), to learn what is a charitable purpose. There the Court said that for a corporation to be entitled to tax exempt status under § 501(c)(3) it had to meet “certain common-law standards of charity,” and that this meant that it “must serve a public purpose and not be contrary to established public policy.” Id. at 586, 103 S.Ct. at 2026. I believe that the non-profit cemetery here met that purpose both under common law traditions and Pennsylvania tax law. And I believe that what the Supreme Court has said in interpreting the general charitable deduction provision of the income tax statute is equally applicable to the estate tax provision.
In taking a contrary view, the majority seems to recognize the inequity of the result, but would leave “this anomaly to Congressional wisdom." I would not. I would remove this blatant inconsistency now by judicial action. Walter Y. Schaefer, the distinguished legal scholar and retired justice of the Illinois Supreme Court, once discussed “the judge’s unspoken notion of the function of his court.” He wrote that if a judge “views the role of the court as a passive one, he will be willing to delegate the responsibility for change, and he will not greatly care whether the delegated authority is exercised or not.” Schaefer, Precedent and Policy, 34 U.Chi.L.Rev. 3, 23 (1966). In this case, I suppose that I am not passive, because, considering the priorities of the realpolitik, I doubt that Congress will get excited enough ever to act on this highly technical problem. I think the courts must act, otherwise the inequities and inconsistencies presented in this case will be with us forever. Accordingly, I would affirm the judgment of the district court.