The Eleventh Circuit Court of Appeals in Commissioner of IRS v Philip A. Driscoll & Lynn B. Driscoll a.k.a. Donna L. Driscoll (NO. 11-12454 filed February 8, 2012), has reversed the U.S. Tax Court (Driscoll v. Commissioner, 135 T.C. 557 (2010)) which had held that the parsonage allowance exclusion of Code Section 107(2) applied to more than one home. Reverend Driscoll maintained a principal residence and a lake home where he vacationed and excluded from income the costs of acquiring and maintaining both homes (parsonage allowance). (See Tax Wars Blog post of 12/14/2011). The IRS had disallowed the exclusion of parsonage allowance as to the lake home. A divided Tax Court had interpreted the exclusion to be applicable to multiple homes. Six of the thirteen participating judges had dissented from the majority opinion. In so holding the Tax Court majority had relied on the reference in Code Section 7701(p)(1)(1) to the Dictionary Act (Title 1, U.S.C.) to the effect that the singular term home includes the plural “home” as well. The Eleventh Circuit quoted Code Section 7806(a) which makes clear that cross references in the Code “are made only for convenience, and shall be given no legal effect.” The Court quoting the Supreme Court in United States v. Hayes, 555 U.S. 415, 415, note 5, which explained that the Dictionary Act, by its own terms, does not apply if “the context indicates otherwise.”
The court noted that the Section 61(a) definition of income is all-inclusive and that income exclusions are narrowly construed. The Court found that the context of the parsonage allowance in Section 107(2) does not support a “singular-to-plural” interpretation of home. That according to Webster’s Third New International Dictionary, 1082(1983), home refers to “the house and grounds with their appurtenances habitually occupied by a family: one’s principal place of residence: DOMICILE.” The court found that “home has decidedly singular connotations.” The court found further that the legislative history of Section 107(2) does not support a plural application of the term “home” but continuously refers to the term “home” or similar words in the singular.
The court, again referring to Webster’s Dictionary also gave the Tax Court an English grammar lesson, noting that “the word ‘a’ is used as a function word before most singular nouns other than proper and mass nouns when the individual in question is undetermined, unidentified or unspecified, especially when the individual is being first mentioned or called to notice. Thus, while “a” may indeed mean ‘no particular home’ (as the Driscoll’s argued) we conclude that ‘a” maintains a singular connotation, especially when context indicates a singular meaning as here.”
Thus, Reverend Driscoll was found to be entitled to a parsonage allowance exclusion under Section 107(2) for only one home, his principal residence and not for the lake home. The Eleventh Circuit not only has made Strunk and White (authors of classic grammar book, The Elements of Style) proud, but has issued a ruling that makes eminent sense and comports with the spirit and intent of the exclusion from income granted by congress which certainly was not intended for the financial enrichment of the shepherd at the expense of the flock.
Copyright 2012 by Robert S. Steinberg, Esquire
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