Court Opinion

ID: 9466353
Source: CourtListenerOpinion
Date Created: 2023-08-05 01:13:08.405286+00
Date Added: 2024-06-11T17:39:41.176293
License: Public Domain

KENNEDY, Circuit Judge,
dissenting:
I respectfully disagree with the majority’s holding. In my view the taxpayers’ expenses for meals in common with co-employees are neither business expenses deductible under I.R.C. § 162 nor meals furnished by the employer excludable under I.R.C. § 119. Inasmuch as only a plurality of seven out of fifteen judges on the Tax Court panel found that these were business expenses, I do not believe that we are bound to give that finding decisive weight. Alternatively, since the Tax Court’s opinion in Cooper preceded the Supreme Court’s decision in Commissioner v. Kowalski, 434 U.S. 77, 98 S.Ct. 315, 54 L.Ed.2d 252 (1977), in which the Court construed section 119 quite narrowly to meals actually furnished by the employer, rather than meals furnished by the employees in a facility provided by the employer, I think that the Tax Court’s decision should be reversed on the authority of Kowalski.
A result contrary to the one reached by the Tax Court does not depend upon an overly literal reading of the statute. Although deductibility under section 162, rather than exclusion of income under section 119, presents the more substantial argument for the taxpayers here, under either provision the underlying principle is the idea that forced consumption should in some cases be treated as a transaction that is not dependent on significant elements of personal choice. That is, if the convenience of the employer dictates a certain type of consumption that is likely to be different from that which a taxpayer would normally prefer, this restriction of the taxpayer’s preferences is an occasion for an “accession to wealth” over which the taxpayer does not “have complete dominion.” Cf. Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 431, 75 S.Ct. 473, 99 L.Ed. 483 (1955) (defining gross income in terms of quoted phrases). It appears from the record that such a restriction on the taxpayers’ consumption preferences was not present in this case: the only aspect of the common dining arrangement that suited the employer was its location. The firemen were apparently free to suit their own tastes in the groceries purchased and the food prepared. This freedom points up the critical omission in the majority’s hypothetical, which is the failure to specify the amount of the individual taxpayer’s participation in either the choice of food or the decision of how much to spend on the meals.
The necessity in cases like these to focus on such minutiae to determine the degree of taxpayer control suggests the hair-splitting artificiality of isolating an otherwise clear type of personal expense which all taxpayers must incur in the ordinary course of living and labeling that expense “business” and therefore nontaxable for a particular, and to that extent special, class of taxpayers. Legislative exceptions such as section 119 should not be broadened beyond their explicit terms by judicial interpretation, and definitional sections such as section 162 should be interpreted in light of Congress’ intention, in defining gross income, to exert the “full measure of its taxing power.” Helvering v. Clifford, 309 U.S. 331, 334, 60 S.Ct. 554, 556, 84 L.Ed. 788 (1940). While acknowledging that the arguments so well stated by Judge Curtis are reasonable ones, I believe the principles set forth above require us to reverse the Tax Court, and I dissent from the decision not to do so.