A DECADE AGO the French historian Emmanuel Le Roy Ladurie published a remarkable book called Montaillou, in which he brought back to life a peasant village in the Pyrenees as it had existed during the first decades of the fourteenth century. What made the book possible was the existence, in the Vatican Library, of the Inquisition records of Jacques Fournier, the bishop of Pamiers, who had betaken himself to Montaillou in 1318 to investigate the persistence there of the Albigensian heresy. Fournier, a fastidious man, deposed dozens of people. “In the process of revealing their position on official Catholicism,” Ladurie wrote, “the peasants examined by Fournier’s Inquisition . . . have given an extraordinarily detailed and vivid picture of their everyday life.” The picture is complete down to the kitchen utensils and the hams hanging from the rafters. We learn what people customarily wore to bed in Montaillou, and the etiquette of giving a party, and who employed a wet-nurse. All the petty feuds and curious bonds among families and friends are laid bare. With little more than Fournier’s records to work from, Ladurie was able to describe a medieval community in just the way that modern social anthropologists now routinely describe living ones.
Jacques Fournier, who became Pope Benedict XII, died in 1342. But his work is carried on, in a way, by the lawyers and judges of an arm of the federal government called the United States Tax Court. For a fee of $60 any American who has received a “statutory notice of deficiency” from the Internal Revenue Service can go to tax court and mount an appeal. Mostly the cases are settled before trial or quickly resolved in an informal sort of court. But not a few cases, some of which have the potential to set precedents, get a full-blown hearing. Lawyers can be brought in, the petitioner provides an account of his predicament and how he got into it, the IRS counters with its own interpretation, and in the fullness of time a decision is handed down.
The decisions that are citable or precedential are published every month in a series called United States Tax Court Reports, and one morning recently, after a friend alerted me to their existence, I went to the library and settled down with the latest volume it had. By the time the librarians whispered me out into the night, I had read my way back to the early 1970s.
WHAT IMPRESSED me most upon looking into the lax Court Reports is the indomitability of the human spirit. To be sure, many of the cases in these volumes involve faceless conglomerates arguing over such things as depletion allowances and investment tax credits, but the cases that really stand out involve private citizens who have decided to stand up for what they believe to be their rights, and who in most cases haven’t got a prayer.
I’m thinking of petitioners like Harvey Waldman, a businessman in Marina del Ray, California, who pled guilty to conspiracy to commit grand theft and, in lieu of a one-to-ten-year prison sentence, was ordered to pay restitution to his victims, the cost of which he decided to deduct on his next tax return as a “legal or professional fee.” The IRS disallowed the deduction on the grounds that a “fine or similar penalty” was never deductible, and Waldman appealed to tax court, arguing that restitution was something altogether different. Judge Mary Ann Cohen, who heard the case, ruled, in effect, that the petitioner must be kidding.
Or consider the matter of Arnold H. and Carole L. Feldman, petitioners. The Feldmans lived in Philadelphia, where Arnold was a rabbi. Arnold invited all 725 families in Congregation Shaare Shamayim (“Gates of Heaven”) to the bar mitzvah of his son, David, and then deducted as a business expense the cost of the reception. The Feldmans argued that while the bar mitzvah of a lawyer’s son might be a purely social event, the bar mitzvah of a rabbi’s son “is an integral part of [the rabbis] professional activities.” It was further noted that during the reception certain people had been approached and persuaded to contribute money for thirty new stainedglass windows in the synagogue’s sanctuary. The tax court would have no part of it. “We do not propose,” Judge Herbert L. Chabot wrote, “to set down a general rule in the instant opinion that one can never convert a basic life-cycle family celebration into a business expense. We content ourselves with concluding that petitioners did not succeed in effecting such a conversion in the instant case.” Judge Chabot noted that just because John C. Coolidge had sworn in his son as President didn’t mean he could have deducted the cost of a subsequent reception.
And here is Biltmore Blackman, petitioner, a resident variously of Maryland, South Carolina, and Massachusetts. Blackman set fire to his wife’s clothing (she wasn’t in it) after a quarrel one Labor Day weekend, and though he “took pots of water to dowse the fire,” the fire spread and consumed a house that Blackman owned in Baltimore. Blackman claimed a deduction on his next tax return of $97,853 for a casualty loss that his insurance company, State Farm, had refused to reimburse. The IRS disallowed the deduction and Blackman appealed. The tax court’s curt dismissal of the case must have seemed unreasonably harsh to a man who had just been through a divorce. “We refuse,” Judge Charles R. Simpson wrote in his opinion, “to encourage couples to settle their disputes with fire.”
THE TAX COURT judges do have their peeves. They dislike “tax-motivated transactions” that “lack economic substance” — tax shelters, in other words; such phrases as “mining exploration” and “farm losses” and “commodity straddles” are certain to invite scrutiny. The justices are scornful of anyone who claims “reliance on erroneous advice of preparer” as a reason to be excused from tax penalties. They turn deaf ears to those who, in pursuit of constructive engagement with the IRS, have been poorly served by the United States Postal Service. They are understandably impatient with petitioners who have “instituted proceedings for the purpose of delay.”
And they are profoundly skeptical of any claims to exemption involving religions, such as the Universal Life Church, the Church of Ethereal Joy, and the Ecclesiastical Order of the Ism of Am, that are perhaps not fully in the spiritual mainstream. Lewis Kessler, who lived in Ypsilanti, Michigan, and worshiped the sun god, found this out after the IRS disallowed a deduction of $1,380 for the cost of one of Kessler’s “annual journeys to the region located between the Tropic of Cancer and the Tropic of Capricorn (hereinafter sometimes referred to as the tropics) for the purpose of religious worship and prayer.” In this case, the pilgrimage had been to Puerto Rico. It is frequently overcast in Ypsilanti, and Kessler argued in tax court that denial of the deduction impeded his free exercise of religion. Judge Chabot, while conceding goodnaturedly that “we do not question the sincerity of Lewis’ beliefs,” ruled against him. “Petitioners are free to practice their religion,” Chabot wrote; however, “they will not be subsidized.”
I don’t know how tax-court judges are selected, but by and large they seem to be a sensible, articulate, well-meaning lot. Oh, there are times when the judges wax censorious, and now and again they give someone what clearly seems to be a raw deal. In lots of cases, however, they side with the petitioner. William W. Mattes, Jr., a balding resident of Bel Air, Maryland, was allowed to deduct the cost of surgical hair implants. Donald Givens, a police officer in Los Angeles, was allowed to exclude from his gross income the accumulated sick pay he received following injuries incurred in the line of duty. William H. Horton, of Flint, Michigan, a peripatetic hockey player employed by many different minorand major-league teams, was allowed to take deductions for related travel expenses and for a subscription to Hockey News. Christine Byrne, a clerk in the billing department of a New Jersey company engaged in the sale of steel, was told that she did the right thing in not reporting some of the compensation she received from her employer after a complicated lawsuit stemming from a sex-discrimination investigation. When the issues are not entirely clear-cut, as in the matter of David Cass, an economist at the University of Pennsylvania, the tax court can be truly solomonic. Justice Julian I. Jacobs ruled, on the one hand, that Cass, whose specialty was “formulating and analyzing mathematical models of various aspects of economic behavior,” was entitled to deduct the cost of the groceries he used while away from home on a fellowship at Caltech; and he ruled, on the other, that Cass’s method of determining which proportion of the groceries was consumed by him and which by his wife, two children, and dog—he came up with a formula based on proportionate body weights—was ridiculous. “Any parent having a teenage child,” Judge Jacobs wrote, “can attest to the fact that a teenager eats as much as, or more than, the parent regardless of weight.” He ordered Cass to simply deduct a sum equal to one fourth of the family’s total grocery expenses, discounted by five percent “to account for dog food.”
THE UNITED STATES tax court publishes about a dozen decisions a month. With a full set of these documents, and them alone, historians millennia hence could probably put a big chunk of America back together, with its quirks of mind and taste and law exquisitely rendered. As I left the library, it occurred to me to give a small assist to some unborn Ladurie by making sure that our own inquisition records survive. For all I know, the Vatican Library already gets the United States Tax Court Reports, but in case it doesn’t, I intend to arrange for it to receive all the volumes for 1989. Perhaps others will be willing to pick up the tab for 1990 and beyond. There might even be some slight tax advantage in doing so. The work of the Vatican does seem generally to conform to that of a church, and the cost of a donation to this enterprise is surely to be considered a legitimate deduction. I, at any rate, will be declaring it as one, and if the Commissioner of Internal Revenue decides to behave shamefully about the matter, my response will be immediate and unequivocal:
See you in court.