Court Opinion

ID: 9488354
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:42:38.165523+00
Date Added: 2024-06-11T17:52:49.975285
License: Public Domain

MAYER, Circuit Judge,
dissenting.
I dissent because I do not believe Congress implicitly repealed section 11(e) of the Revenue Act of 1962, Pub.L. No. 87-834, 76 Stat. 960. Because repeal by implication is strongly disfavored, it is found only where an enactment is in irreconcilable conflict with an earlier statute, or where the enactment so comprehensively covers the subject matter of the earlier statute that it can only be seen as a substitute. Traynor v. Turnage, 486 U.S. 536, 547, 108 S.Ct. 1372, 1381, 99 L.Ed.2d 618 (1988); Randall v. Loftsgaarden, 478 U.S. 647, 661, 106 S.Ct. 3143, 3151-52, 92 L.Ed.2d 525 (1986); Radzanower v. Touche Ross & Co., 426 U.S. 148, 154, 96 S.Ct. 1989, 1993, 48 L.Ed.2d 540 (1976). In either case, Congress’ intention to repeal the earlier statute must be “clear and manifest.” Radzanower, 426 U.S. at 154, 96 S.Ct. at 1993; Neptune Mut. Ass’n v. United States, 862 F.2d 1546, 1551 (Fed.Cir.1988).
Both the Revenue Act of 1962 and the Foreign Earned Income Act of 1978, Pub.L. No. 95-615, 92 Stat. 3098, amended section 911 of the Internal Revenue Code of 1954, Pub.L. No. 83-591, 68A Stat. 289. Before the 1962 Act, United States citizens residing in a foreign country could exclude an unlimited amount of income earned overseas from their taxable income. Section 11(a) of the 1962 Act limited the amount of this exclusion, but section 11(c) prevented retroactive application of the new limit. Specifically, section 11(c)(1)(B) allowed taxpayers to continue receiving an unlimited exclusion for any income received after 1962 if they had a forfeitable or nonforfeitable right to that income on March 12, 1962.
Nothing in the 1978 Act’s revisions to the foreign earned income taxation scheme, as sweeping as the revisions were, is irreconcilable with maintaining the rights preserved by section 11(c) of the 1962 Act. Even though section 11(a) of the 1962 Act was repealed by substitution of provisions from the 1978 Act, the savings provisions of section 11(c) are not irreconcilable with those amendments. Where a statute is implicitly repealed, any reconcilable provision of the earlier enactment must be upheld. United States v. Fausto, 484 U.S. 439, 452-54, 108 S.Ct. 668, 676-77, 98 L.Ed.2d 830 (1988); Radzanower, 426 U.S. at 154-55, 96 S.Ct. at 1993. The amendments of the 1978 Act were entirely prospective and simply did not address the grandfathered right to exclude income provided by section 11(c). Section 11(c) provides only a limited grandfathered right to exclude income earned before a certain date. One is prospective, the other retrospective; there is no conflict. Since the 1978 Act did not address the grandfather provision of section 11(c), it also cannot be that the 1978 Act comprehensively covered it.
The legislative history of the Economic Recovery Tax Act of 1981, Pub.L. No. 97-34, § 111, 95 Stat. 190 which also amended section 911 of the Internal Revenue Code, specifically says that Congress did not intend to repeal the savings provisions of section 11(c). H.R.Rep. No. 201, 97th Cong., 1st Sess. 62 (1981); H.R.Conf.Rep. No. 215, 97th Cong., 1st Sess. 205 (1981). The government’s observation that the legislative history of the 1981 Act cannot revive or reenact section 11(c) misses the point. The Foremans do not argue that the legislative history reenacted section 11(c), but that it was never repealed in the first place. I agree and the 1981 legislative history is in accord. Section 11(c) provides an important substantive right and is not just an administrative provision that expired by its own terms because section 11(a) was repealed.
*1565The government’s alternative argument that the Court of Federal Claims granted summary judgment on the merits in footnote 2, and the accompanying text, of its opinion is also deficient. The trial court’s gratuitous comment on the merits is not adequate alternative support for the judgment, especially when it did not believe it had subject matter jurisdiction.