Memorandum in Opposition — Wolfe v. Commissioner

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on the Suprenné Court of the Gnited States

OcToBER TERM, 1966

No. 364

EvLpon E. Wore AND Sara A. WOLFE, PETITIONERS

. _ Vv. .

CoMMISSIONER OF INTERNAL REVENUE

On. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT.OF APPBALS FOR THE DISTRICT OF COLUEEIA

CIRCUIT

MEMORANDUM FOR THE RESPONDENT IN OPPOSITION

Petitioner,’ a career Civil Service employee of the

United States Bureau of Public Roads, was sent to

Tran to.work on a road building project. His salary

was paid by the United States, which was-reimbursed

by Iran.. In-general, the Internal Revenue Code ex-

empts from’ taxation income earned by an American

citizen who. has ‘worked outside the United States for

at least 17 out of 18 consecitive months. Code

', 4 911(a)(2).. Excepted from the scope of this ex-

emption are “amounts paid by the United States or .

any agency thereof.”” Ibid. If, as the court of ap-

1Mrs. Wolfe is » party ‘only because she and her husband

filed a joint. return. Mr. Wolfe will be referred to as

petitioner. .

228-651—66 : *- a

; ae

peals concluded, petitioner’s salary earned in Iran -~

was “paid bx the United States’? within the mean-

ing of §911(a)(2), it is mes, otherwise, it is

exempt.

That the salary v was, siketatee “paid by the United

States’? is undisputed. This should. have ended the

matter; but petitioner asserts that there is “uncer-

tainty’’ in the “interpretation” of the statute (Pet.

4), and that the phrase “paid by’’ as used therein |

“refers to the entity which bears the economic burden

of salary payment’? (Pet. 5)—in this instance,

presumably, Iran. The majority of the court of ap-

peals, in rejecting these contentions below, concluded

(Pet. 24):

No such distinction based on. reimbursement

to the Government has béen noted in any com-

mittee report or similar legislative history. If

interjected into the tax law it, would create in-

vidious discriminations’ among the U.S.

Government employees assigned for. service

abroad, dependent on adventitious factors hav-_ 7

ing nothing to do with their employment rela-

tionship with the Government. or rights to

compensation from the Government.

If anything need be added.to the analysis (Pet..21—

24) which led to this conclusion, we would suggest

that this. Court has repeatedly rejected. efforts to-

read. “economie burden” into the law in other, not

unrelated, tax contexts,” The majority below quite

2 See, ¢.g., Maximov v. United States, 373 U.S. 49, 52; Biddle

v. Commissioner, 302-U.S. 573, 5815. Anderson v. Wilson, 289

U.S. 20, 26-27; and see also such intergovernmental immunity

cases as Oklahoma Tax Comm'n v.. Texas Co. 336 US. 342,

fy

<a tS

3

correctly applied the salutary rule that “those who

seek an exemption from. a tax must rest it on more

than a doubt or ambiguity.” United States v. Stewart,

311 U.S. 60, 71. —

. As to the asserted conflict (Pet. 4-5) with Erland-

son V. Commissioner, 277 F. 2d 70 (¢.A. 9), it is non-

existent.’ In Erlandson, the United States had en-

gaged a company which, “as the government’ S agent

‘and not as an independent contractor,’ ’’ managed a

vessel owned by the United States (p. 71). The court

_ concluded that when the agent received money from

the United States and used it to pay the crew’s wages,

the United States had actually made the payment,

through its agent. In the present case there is no

: principal-agent relationship between the governments

of Iran and the United States. |

There is no conflict of appellate decisions, and the

‘instant decision of the court of appeals is correct. |

- The petition for certiorari should therefore be denied.

Respectfully submitted. ihe ae

7 THURGOOD MaRSHALL,

: Solicitor General. .

‘MITCHELL RoGoviy, :

Assistant Attorney General.

~ Harotp. C. WILKENFELD,

_ Attorney.

Avaust, 1966.

363-364; Alabama v. ‘King & Beoser, 314 U.S. 1, 8-9; Doc ‘a

v: United States, 314 US. 14, 18; Helwering v. Gerhardt, 304

U.S. 405, 417, 420-423. :

® Nor is there any basis for the allegation (Pet. 5) that the

government has taken an inconsistent position in Z’rlandson and

other “analogous decisions.”

"U.S. GOVERNMENT PRINTING OFFICE: 1966