BNSF Railway Company v. United States, 745 F.3d 774

BNSF seeks RRTA refunds for taxes paid on NQSOs and certain moving-expense benefits.
RRTA imposes Tier I taxes on compensation; Treasury Regulation § 31.3231(e)-1 defines compensation like wages for RRTA purposes.
District court granted summary judgment to BNSF on all refund claims; the government appeals.
NQSOs were exercised by thousands of employees with substantial total spread and RRTA taxes paid.
BNSF also paid extensive moving expenses to relocate employees, some excluded under § 217 and others alleged as non-cash compensation.
BNSF filed refunds since 1993–1998; the IRS granted some employer-portion refunds on moving expenses but not others; formal vs. informal claim timing becomes disputed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are NQSOs compensation under the RRTA?	BNSF: compensation should be narrow; NQSOs are not cash remuneration.	Government: compensation is inherently ambiguous; regulation defines as wages.	NQSOs are compensation under RRTA; regulation reasonable and Chevron applies.
Are moving expenses excludable from RRTA compensation?	§ 3231(e)(1)(iii) excludes bona fide travel expenses; moving expenses not explicitly excluded by § 3231(e)(5) fall here.	§ 3231(e)(5) provides specific exclusion; broad § 3231(e)(1)(iii) would nullify specific exclusions.	Harmonize § 3231(e)(1)(iii) with § 3231(e)(5); moving expenses excludable only to extent not covered by § 3231(e)(5) and on travel/bonafide-expense basis.
Whether BNSF’s 1996–1997 moving-expense employee tax refunds were properly before the court given informal/formal claim requirements.	Informal claims preserved rights pending formal filing.	Failure to perfect formal claims bars jurisdiction; informal claims were not perfected.	BNSF’s claims for 1996–1997 employee taxes must be dismissed for failure to perfect formal claims.
Remand or resolution on moving-expense determinations?	Expenses can be parsed to determine compensation vs. travel exclusions.	Lower court should determine per-expense whether excluded or not.	Remand for district court to parse each disputed moving expense and apply § 3231(e)(1)(iii)/(e)(5) accordingly.

Mayo Foundation for Medical Educ. and Research v. United States, 131 S. Ct. 704 (2011) (applies Chevron deference to tax regulations interpreting FICA/RRTA)
Hinck v. United States, 550 U.S. 501 (2007) (specific statute preempts general remedies when clearly intended)
EC Term of Years Trust v. United States, 550 U.S. 429 (2007) (specific-general canon governing interpretation)
Radzanower v. Touche Ross & Co., 426 U.S. 148 (1976) (specific-general canon principle cited)