Commissioner v. Bilder
8 L. Ed. 2d 65, 1962 U.S. LEXIS 2305, 369 U.S. 499 (1962)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
The definition of "medical care" under § 213 of the Internal Revenue Code of 1954 does not include personal living expenses, such as meals and lodging, incurred while away from home for medical treatment, even if the travel itself is medically necessary. Only the cost of transportation for such travel is deductible.
Facts:
- A New Jersey attorney, the taxpayer, had suffered four heart attacks over an eight-year period.
- In December 1953, a heart specialist advised him to spend the winter season in a warm climate as part of his medical treatment.
- Following this advice, the taxpayer, his wife, and his three-year-old daughter traveled to Fort Lauderdale, Florida, for three months.
- During their stay, they rented an apartment for $1,500.
- The following winter, they returned to Fort Lauderdale for two months, renting another apartment for $829.
- The taxpayer claimed both rental payments as deductible medical expenses on his 1954 and 1955 federal income tax returns.
Procedural Posture:
- The Commissioner of Internal Revenue disallowed the taxpayer's deductions for rental payments in Florida.
- The taxpayer challenged the Commissioner's determination in the U.S. Tax Court.
- The Tax Court reversed the Commissioner in part, allowing one-third of the rental payments (the portion attributable to the taxpayer) as a deduction.
- Both the taxpayer and the Commissioner cross-appealed the Tax Court's decision to the U.S. Court of Appeals.
- The Court of Appeals held that the full rental payments were deductible, reversing the Tax Court's partial allowance.
- The U.S. Supreme Court granted certiorari to resolve a conflict between the decision of the Court of Appeals and a contrary holding from another circuit.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the term "medical care" under § 213 of the Internal Revenue Code of 1954 permit a taxpayer to deduct living expenses, such as rent, incurred while away from home for a medically necessary change of climate?
Opinions:
Majority - Mr. Justice Harlan
No, the term "medical care" under § 213 does not permit the deduction of such living expenses. While the prior 1939 tax code had been interpreted to allow deductions for meals and lodging during medical travel, the legislative history of the 1954 Code reveals a clear congressional purpose to change this rule. The House and Senate Committee Reports accompanying the 1954 Act explicitly state that the provision allowing a deduction for transportation for medical care "specifically excludes deduction of any meals and lodging while away from home receiving medical treatment." The reports provide a direct example of a patient ordered to Florida for health reasons, clarifying that transportation would be deductible but living expenses would not. This unequivocal expression of legislative intent is controlling and forecloses any interpretation that would permit the taxpayer to deduct the rental payments.
Dissenting - Mr. Justice Douglas
Yes. Justice Douglas would have affirmed the judgment of the Court of Appeals, which held that the full rental payments were deductible as expenses for "medical care."
Analysis:
This case is a foundational lesson in statutory interpretation, demonstrating the power of legislative history to clarify, and in this instance effectively alter, the meaning of a statute. By relying heavily on committee reports, the Court established that even if a statute's text is re-enacted, its meaning can change if Congress provides clear, authoritative guidance on its new intent. This decision created a bright-line rule distinguishing deductible transportation costs from non-deductible living expenses for medical travel, significantly narrowing the scope of the medical expense deduction and impacting taxpayers who must temporarily relocate for health reasons.
