Sorenson v. Secretary of the Treasury

RESPONDENT: Secretary of the Treasury
LOCATION: City of Cleveland Fire Department

DOCKET NO.: 84-1686
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 475 US 851 (1986)
ARGUED: Jan 15, 1986
DECIDED: Apr 22, 1986

Peter Greenfield - on behalf of the petitioner
Richard Farber - on behalf of the respondents

Facts of the case


Media for Sorenson v. Secretary of the Treasury

Audio Transcription for Oral Argument - January 15, 1986 in Sorenson v. Secretary of the Treasury

Warren E. Burger:

We will hear arguments next in Sorenson against the Secretary of the Treasury of the United States and the United States.

Mr. Greenfield, I think you may proceed whenever you are ready.

Peter Greenfield:

Thank you, Mr. Chief Justice, and may it please the Court, in this case the Court is asked to construe Section 2331 of the Omnibus Budget Reconciliation Act of 1981, or OBRA.

In OBRA, Congress established the tax intercept program for collecting child support owed to state welfare agencies, and it directed the Secretary of the Treasury to intercept "refunds of federal taxes paid" payable to certain individuals.

What this Court is asked to decide is whether Congress authorized the interception of earned income credit benefits when it directed the interception of refunds of federal taxes paid.

It is petitioner's contention that it did not authorize interception of earned income credit benefits, and that was also the holding of the Second Circuit in Nelson versus Regan and the Tenth Circuit in Bucker versus the Secretary of the Treasury.

We are here because the Ninth Circuit ruled the other way.

There are three points that I would like to emphasize this morning.

The first is that the statutory phrase "refunds of federal taxes paid" is a distinctive and unambiguous phrase which literally does not encompass earned income credit benefits.

The second is that the structure of Section 2331 of OBRA is inconsistent with the broad reading the Secretary has given to Section 6402(c) of the Internal Revenue Code.

And the third and perhaps most important point is that when Congress enacted Section 2331, it was concerned with support for children and with reducing the cost of the AFPC program, and it would have made no sense in that context to fund support for one group of needy children aided under the AFDC program by taking benefits from another group of children, perhaps as needy or more needy who because their parents were working were assisted under the earned income credit benefit program.

To start with the phrase "refunds of federal taxes paid"--

Byron R. White:

What group of children do you say was in that latter category?

Peter Greenfield:

--Children, Justice White... in order to qualify for an earned income credit benefit, an applicant must reside with a dependent child, and the benefit only goes to low income families, so the children I am speaking about are children in families eligible for earned income credit benefits.

Byron R. White:

And the problem is that the Secretary wants to take that credit and withhold it?

Peter Greenfield:

That's correct.

Byron R. White:

For the benefit of some other group of children?

Peter Greenfield:

To help--

Byron R. White:

To make the applicant pay his debts.

Peter Greenfield:

--To reduce the cost of the AFDC program.

As adopted in 1981, this would reflect an attempt to recoup the costs of support for needy children already paid.

Byron R. White:

I see--

Peter Greenfield:

The expression "refund"--

John Paul Stevens:

--Let me just be clear.

The money, though, if it is withheld and recouped, it doesn't go to the parents of... the first family; rather, it goes to the state, doesn't it?

Peter Greenfield:

--That was the only place that it could go in 1984.

Perhaps the most important of these, referred to in the government's brief, is in the Deficit Reduction Act of 1984, which adopts a parallel intercept program using virtually the same language to collect any debt owed to the federal government with a limited exception.

I think it is Social Security overpayments.

Byron R. White:

Where do these withholdings go today?

Suppose we agree with the government, and they withhold.