Court Opinion

ID: 9453562
Source: CourtListenerOpinion
Date Created: 2023-08-04 18:17:24.072351+00
Date Added: 2024-06-11T17:33:42.790386
License: Public Domain

DAVIS, Judge
(concurring in part and dissenting in part):
I can pick my way through this stony field only by looking for the separate paths open to judges, on the one side, and to legislatures and administrators, on the other. Confronted with broad concepts in a statute, a judge has much greater *833difficulty and less authority in summarily drawing exact lines, based on practicality, than do legislators or those who are granted power to administer a regulatory or taxing system. My difficulty here as a judge is that, faced with the all-inclusive words of Section 61(a) of the 1954 Revenue Code, I can see no theoretical or principled difference between “direct” and “indirect” moving expenses.1 Yet since 1954 the Internal Revenue Service has ruled that reimbursement for the former, and those alone, need not be included in gross income. Rev.Rul. 54-429, 1954-2 Cum.Bull. 53. Perhaps the IRS draws the authority to make this distinction, on pragmatic grounds, from its general regulatory power, or perhaps the ruling has to be accepted, in both its affirmative and its negative aspects, because of its age. Cf. United States v. Correll, 389 U.S. 299, 304-307, 88 S.Ct. 445, 19 L.Ed.2d 537 (1967). Certainly Congress could make the separation if it wished, but it did not do so for the taxable year with which we are concerned. With only “indirect” moving expenses before us, the safest course for me, as a judge, is to apply § 61(a) without regard to the Revenue Ruling but under the guidance of Commissioner of Internal Revenue v. Glenshaw Glass Co., 348 U.S. 426, 75 S.Ct. 473, 99 L.Ed. 483 (1955), and Commissioner of Internal Revenue v. Lo Bue, 351 U.S. 243, 76 S.Ct. 800, 100 L.Ed. 1142 (1956). In the light of the great scope of § 61(a), as indicated in those and comparable decisions, I concur with the court that the reimbursement for “indirect” moving expenses was includable in taxpayer’s gross income, probably as part of his “compensation for services, including fees, commissions, and similar items.”
I part company, however, on the de-ductibility of these expenses. The Tax Court, en banc (with three dissents), has recently ruled that, in almost identical circumstances, an employee-taxpayer can deduct his “direct” moving expenses as ordinary and necessary business expenses. Edward N. Wilson, 49 T.C. 406 decided Jan. 24, 1968; see, also, Vaal R. Dodd, P-H Memo T.C. j| 68,023, decided February 6, 1968. I agree with that view. Since I can make no distinction, as a judge, between “direct” and “indirect” moving expenses, and since, in the area of the deductibility of such expenses there is no precise statutory or administrative guidance, I must apply the rule of the Tax Court’s Wilson case to the present taxpayer’s “indirect” costs.
On the other aspect of the case, the “home guaranty payment”, I agree with the court. Like the reimbursement for moving expenses, this payment appears to be “gross income” under § 61(a) as interpreted by the Supreme Court. Chief Commissioner Bennett’s opinion rightly points out that a payment of this kind is not part of the proceeds of a capital asset and is not a return of capital. The remaining question is whether taxpayer is entitled to a deduction on account of the reimbursed house-loss. In Edward N. Wilson, supra, the unanimous Tax Court held, in the same opinion which upheld the deductibility of “direct” moving expenses, that a similar “loss from the sale of a personal residence does not constitute a capital loss”, and also that the loss was not a deductible business expense. I accept that position and therefore concur on this point with our court which rules the same way in this case.

. It is said that “direct” moving expenses are not subject to personal choice, but we all know of the great fluctuations in the forms and expense of moving household goods as well as the variations in modes and cost of transporting families. The small difference, in this respect, between “direct” and “indirect” expenses seems to me not the kind of distinction judges can find in a statute as broad and general as § 61(a).