RESPONDENT: United States
LOCATION: First Division Circuit Court, Pulaski County
DOCKET NO.: 76-1058
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Seventh Circuit
CITATION: 435 US 21 (1978)
ARGUED: Oct 12, 1977
DECIDED: Feb 28, 1978
Sharon L. King - for petitioner
Stuart A. Smith -
Facts of the case
Media for Central Illinois Public Service Company v. United StatesAudio Transcription for Oral Argument - October 12, 1977 in Central Illinois Public Service Company v. United States
Audio Transcription for Opinion Announcement - February 28, 1978 in Central Illinois Public Service Company v. United States
Warren E. Burger:
The judgment and opinion in Central Illinois will be announced by Mr. Justice Blackmun.
Harry A. Blackmun:
Three months ago, on November 29, this Court in a case called Commissioner against Kowalski, held that meal allowance payments made by the state of New Jersey to which State Police Troopers, were includeable in gross income under Section 61 (a) of the 1954 Internal Revenue Code, and the tax year in question of that that litigation was 1970.
The present case which comes to us from the Legislate Court of Appeals for the Seventh Circuit, concerns another aspect of meal allowances.
The question in this one is whether an employer, who in 1963 reimbursed lunch expenses of employees who were on company travel, but not away overnight, must withhold federal income tax on those reimbursements or stated another way, the issue is whether the lunch reimbursement is codified as wages under Section 3401 (a) of the 54 code.
This of course is a question different from their qualifying as an income, as the Court decided in Kowalski, for many items that are income and not necessarily wages, examples are dividends and interest.
In an opinion filed today, we hold that reimbursement for 1963 lunch expenses did not constitute wages within the meaning of Section 3401 (a).
Mr. Justice Brennan has filed a separate opinion, joining the Court's opinion, and emphasizing that we don't decide whether a new Internal Revenue Service Regulation that would require withholding would or wouldn't be valid and further emphasizing that the petitioner here couldn't be subjective retroactively to withholding tax.
The Chief Justice and Mr. Powell have joined Mr. Justice Brennan in that opinion.
Mr. Justice Powell has also filed a concurring opinion.
He joins a Court's opinion and observes that it seems particularly inappropriate for the Commissioner, absent express statutory authority, to impose retroactively a tax prior to the date on which taxpayers clearly were put on notice of the liability.
The Chief Justice has also joined Mr. Justice Powell's decision.
Mr. Justice Stewart has filed a separate opinion concurring in the judgment.
Warren E. Burger:
Thank you, Mr. Justice Blackmun.