Court Opinion

ID: 4483027
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:15:50.712724+00
Date Added: 2024-06-11T14:38:47.321522
License: Public Domain

Fay, J., dissenting: To encourage mobility of the American labor force, Congress enacted section 217 to allow a deduction for moving expenses to all employees. While, in many instances, legislative history is sparse, we are here concerned with a statute whose history is replete with indications of congressional purpose. The origins and development of section 217 indicate that equality of treatment among taxpayers has been an important congressional consideration. In originally enacting section 217 in 1964, Congress sought to introduce parity among employees who were reimbursed for their moving expenses and those who were not, particularly among old employees transferred to new locations and new employees beginning new jobs. H. Rept. No. 749, 88th Cong., 1st Sess. (1963), 1964-1 C.B. (Part 2) 125,183. Congress further emphasized the firmness of their desire for equal treatment regarding this expense in allowing the expense as a deduction in arriving at adjusted gross income. S. Rept. No. 830, 88th Cong., 2d Sess. (1964), 1964-1 C.B. (Part 2) 505, 576. Still dissatisfied with the disparity of treatment, Congress amended the statute in 1969 to include self-employed taxpayers. The decision of the majority not only has the effect of countermanding incentives to mobility provided by Congress in enacting section 217, but also tends to infringe on more important considerations. The majority’s holding introduces new elements of discrimination between those members of the American labor force employed in the United States and those members employed abroad. Moreover, as pointed out by Judge Dawson, the majority approach would tend to favor high-income taxpayers, something Congress specifically sought to avoid. Additionally, it would work undue hardship on American employers conducting business abroad; employees may be unwilling to accept overseas transfers unless reimbursed by their employers. It may also result in delaying moves until later in the year.1 Such notions inhibiting foreign travel by American labor are clearly contrary to the purposes of section 911, which was enacted to place American business abroad on an equal footing with foreign competitors.2 Seidman, Legislative History of Federal Income Tax Laws 1938-1861, pp. 472, 596-597; Seidman, Legislative History of Federal Income and Excess Profits Tax Laws 1953-1939, pp. 1755,1759. In enacting each of these sections Congress was seeking to encourage a particular activity. A taxpayer pursuing these activities should not be denied the benefit of both sections. Dawson, Forrester, and Goffe, JJ, agree with this dissent.   Respondent has issued Rev. Rul. 75-84, 1975-11 I.R.B. 8, in an apparent attempt to preclude any disincentive against moving early in the year. This ruling allocates moving expenses incurred in one year against tax exempt income earned in the next year in what appears to be an unjustified erosion of the cash basis method of accounting. See sec..1.217-2(a)(2), Income Tax Regs.    Congress has declined to repeal sec. 911 on several occasions. See Ivor Cornman, 63 T.C. 653,660 (1975); sec. 311, H.R. 17488,93d Cong., 2d Sess. 123.