*1 application deny so, we court. If discretion, our in view as matter experiences.
past pre- impossible MacNeil seems unembarrassed appeals this court sent pres- snarl; and the procedural some exception. case is no
ent dismissing the be entered An order will diligent prosecution.
appeal lack Plaintiff-Appellant, KAISER,
Allen America, STATES
UNITED Defendant-Appellee.
No. 12317. Appeals States
United Circuit. Seventh 22, 1958.
Dec. Raskin, Milwaukee, Wis., Max Harold Detroit,
Cranefield, Mich., appellant. Rice, Atty. Gen., K. Charles Asst. S. Division, Bledsoe, Tax Dept. Carter S. U. Justice, Washington, C., D. Edward Minor, Atty., U. S. Francis G. L. McEl- *2 368 Wis., ligott, Atty.,. Milwaukee, and two children. The funds from which Asst. U. S. Graney,
Joseph. Goetten, strike the distributed F. Melva M. benefits were were. Attys., Union, Dept. Justice, derived Washington, D. from the local the Inter- of C.,. appellee. national and contributions for organizations unions, individ- and Greisman, Arthur J. Gold- M. Julius. uals. Paul, berg, Carolyn Stevenson, Agger, E. April 1955, 15, Rifkind, Garrison, On Elliot Kaiser filed with & Wharton Counsel, Bredhoff, Indus- Director of Internal Associate Gen. Revenue Washing- Wisconsin, Dept., AFL-CIO, District of an tax trial income re- Union showing wages year Dept., ton, C., turn Union received in the for Industrial D. $2,669.48 AFL-CIO, 1954 in of with curiae. the amount as amicus wages liability tax of As with- $359.00. DUFFY, Judge, MA- Chief and Before $388.84, held totaled he refund. claimed a Judges. KNOCH, Circuit JOR and February 17, 1956, Director, by On adjusted gross
audit, in- increased the by adding $565.54, Judge. come the value of DUFFY, Chief by plain- received maintenance assistance alleged This is a suit to recover an tiff. in resulted a tax of $467. overpayment year of income taxes for the plaintiff paid the sum as ad- $108.00 question presented 1954. The is whether plus interest, ditional tax sued for a strike from a union benefits received refund. a worker in- while on is taxable or, alternative, come in the which for basic condition exempt jury are from income tax. The present assistance was actual need in the Court found By question- of the individual worker. gifts. by plaintiff benefits received naire, was determined whether he it Subsequently, trial court set-aside clothing food, needed shelter. Such the judgment verdict entered a right a matter assistance was not like dismissing for defendant compensation. unemployment When . complaint herein. plaintiff assistance, nei- he April 1954, gave 5, anything On promised Allen Kais- ther nor in re- employee Company er an required of Kohler was. turn. He was render Kohler, Wisconsin. On and of. service to the Union. .before date, UAW, said Local 833 an affiliate of judge apparently The learned trial as- UAW, International was the sumed that strike benefits constitute tax- .bargaining agent certified collective for excepted able income unless are production and maintenance workers scope He relied on the broad employedby Company. Kohler Not all of 61(a) the definition in Sec. of the In- employees such were members of the 1954, ternal Code of Revenue 26.U.S.C.A. Union. “gross 61(a) that all § means in- April 5, 1954, in On concert with other from whatever source come derived.” employees, plaintiff Kaiser long went out on the Commissioner has ac- knowledged strike. On date concept he was not a mem- that the of taxable apply ber of the Union and did not receipts income does not include all even- August membership 19, though specifical- until receipts Dur- were not ing did not ly excepted strike he receive from taxable income stat- commencing cash, May 4, but ute. The Commissioner has ruled that 1954, damages received from the Union main- he income did include food, in the affections,1 damages tenance assistance form of alienation of clothing payments of promise marry,2 rent breach an award occupied wrongful statute,3 house he with his wife under a death (.1923). H-2 61 I.T. Cum.Bull. 3. See VII-2 I.T. Cum.Bull. 123 (1928). 4363,. 2. G.C.M. VII-2 Cum.Bull. (1928). Cir., F.2d Burdick, 3 States v. prisoners for mistreat- war held Despite said: “As we the ab- the Court captors.4 by their ment Manning, Cir.,] F. authority, statutory Smith v. express [3 sence receipts subject `2d 348 whether refused *3 Commissioner gifts primarily question fact a of receipt of retirement the income tax * * *» Age paid Federal Old under the benefits System,5 un- Insurance Survivors and adequately The trial submitted court paid compensation employment benefits gift Excerpts question jury. the of to the state,6 public relief by assistance from fol- the court’s instructions as are payments.7 lows : der in vide relief to fits are About a within the did not public ployees measured phasized special American receipt ruled that an other [1939] In Public victims of analogy ruled forms assistance fund set area of Code.”9 intended to provisions assistance benefits year solely by Red Cross food rehabilitation not represent the Commissioner to strike concept their families the of subsistence to be taxable also and medical later, the contributions tornado up benefits. indigent. need. prevent by by benefits. benefit the Commissioner Commissioner taxable gross a disaster § disaster payments made large employer 22(a) “do supplies and Strike want which income of ruled that from Both income.8 his em- provide victim as bene- come were have pro- em- are the un- After strike benefits received instructions, dict of the from labor is the Union because of ments are income” ly either though should answer the compensation In income and not “Compensation “If these “If the “If overruling have that payments listening to legal it was the the jury, pay Union did payments or moral intent, to and were not taxable the trial court was of the gifts.” the jury services, setting ; intention of question services, considering any obligation, were by plaintiff income were made not conscious- found that * * * gifts aside refraining these constitute made ‘no’ * then even pay- you the by were ”; ”; ver- view that were made benefits hold We plaintiff pursuant available to moral to a by plaintiff under the facts obligation of the International Union to case are not income. this taxable its members. the Union sure- re benefits as to whether such ly obligation plaintiff. did not an owe might circumstances under other ceived He was not a member of the Union for course, is, of taxable constitute four and a half months after strike presented on this record. began, yet he received strike bene- Furthermore, testimony fits. was there event, any strike bene which the was entitled to believe by plaintiff which fits received discretionary it was with the Union excepted in expressly from taxable whether strike benefits were Code of Internal Revenue § come distributed. 102. There is sub U.S.C.A. § The second sus basis for record to evidence this stantial finding jury. decision In United Court’s was that Union ex- tain 57-102, 1957-1, 55-132, 213. Rev.Rul. Cum.Bull. Cum.Bull. 1955-1 26. 7. 4. Rev.Rul. Spec.Rul. I.R.S., Stan.Fed.Tax.Rep. 8. Cum.Bull. 1941-1 5. I.T. § 3230, 1938-2 Cum.Bull. 136. 6. I.T. 9. Rev.Rul. 1953-2 Cum.Bull. 112. properly participation plaintiff applied regulations, acted which continued rulings.10 law, have in the strike in return for the force of than to words, more benefits. In other been said “no the rules have by giving binding legal plaintiff opinion or force than the per week, peri- lawyer.”11 valued at for a about $17 eight months, od of has exacted Significant weight also on participation in continued given to this 1920 statement is the abstaining the strike and from work Supreme case of the late previously him a week. netted $166 Commissioner of Internal Revenue *4 that Company, The answer to this contention is Glenshaw Glass 348 U.S. 431, remaining 473, at plaintiff, 477, if on while 75 99 483 S.Ct. L.Ed. “ * * * employment Kohler, temporary particularly had found Re-enactment— slightest elsewhere, would have his strike without the benefits indica- affirmative Congress Highland tion ceased. The been true same would have that ever had the family (Highland Corp., if found em- members of Farms his had decision Farms 1314) ployment, condition of 42 because the B.T.A. basic it—is an unrelia- before * * *” present need benefits was the ble indicium at best. plaintiff. particularly appropriate is statement here, as Government made no It benefits seems clear that the strike showing that the 1920 ever rule was paid complete- which ly were were by Congress. considered earnings. to unrelated his former determining factor the amount of bene- Reversed. paid need, personal him fits to was his de- his marital number of status KNOCH, Judge (dissenting). Circuit given pendents. be- benefits were opinion As indicated in the of Chief family need cause he and were in his Judge DUFFY, the sole here working. after he ceased Such presented is whether strike benefits re- charity. only were We consistent with by striking ceived from a union a work- hold not taxa- were were er are taxable income to him. ble. Judge Chief DUFFY that concludes placed re The District Court the benefits received are nontaxable (1920) liance on 2 Cum.Bull. 73 O.D. case, After careful consideration of the in which ruled that the Commissioner regretfully myself agree. I find unable to by union “Benefits received a labor plaintiff, true that a non-mem- (emphasis sup an individual member plied) given ber of was bene- on strike included while are to be only fits after had he shown himself ” to ** * Although gross in his clothing food, inbe need of and shelter. little if given to have attention seems been given based, The amount of aid was not ruling to from 1920 this obscure earnings, on his per- former but on his judge to trial it the learned stated need, sonal marital status and number of Congres be to must held have dependents. Such benefits would not have approval sional and to have assumed the given, terminated, or would have and effect force of law. regardless participation of his continued strike, had his need ceased to exist ruling This 1920 did cover through receipt of income from paid a union non to family. source him or a member his to a situation where a members or union paid both secondary strike benefits to members and his need awas qualification any event, alike. non-members consideration was given only primary doctrine is more after he had reenactment met the so-called Birmingham, Bennett, Cir., 332 U.S. 11. United States v. 5 Bartels v. L.Ed. 1947. F.2d 67 S.Ct. may all qualification: strike. reasonable inferences that participation light qualifica- primary drawn therefrom favor- in the most Had he met plaintiff’ (citing cases) tion, benefits. mat- received no able would he have qual- primary ter of law meet that benefits constituted Had he ceased gift.” termi- ification, have would taxable income and his not a benefits notwithstanding the extent nated Congres- The District Court inferred mem- need, personal he was whether or approval repeated sional re-enact- The fact Union or not. ber applicable ment sections paid to members light Code, in of the 1920 emphasizes real alike non-members (described majority opinion) in the namely, class payment, either reason for years in- consistent administrative circumstances, in necessitous must be terpretation practice. many per- As all, strike. but, on above must paid sons who have similar tax clearly awaiting indicated said to be this The District Court outcome go cause, policy question allowed the case was exists as to ap- advisability making jury only present full record *5 strike benefits tax peal. free. having predicated of the character dissent on Determination totally presented question of ground, however, strike benefits different including facts, Union’s matters All reached. law. fully dis intent, were
motivation and
by stipulation
facts
uncon
closed
Bogardus
testimony.
Com
v.
troverted
missioner, 1937,
S.Ct.
302 U.S.
32;
Colony
v.Co.
L.Ed
Trust
Old
Commissioner,
U.S.
S.
499,
Ct. require consideration The Union did plain- bestowed on parties: stipulated It was tiff. GREATER DELAWARE VALLEY FED- grants International “The ERAL & SAVINGS LOAN non-members of strike benefits to ASSOCIATION strike, participate in a who do not have sufficient if BOARD, FEDERAL BANK HOME LOAN purchase to meet an food or emer- Appellant. gency Union treats situation. The No. 12664. ba- same non-members Union, but as members Appeals sis States Court of United well as members Third Circuit. non-members they may be strikers before must re- Argued Nov. 1958. Union.” assistance ceive DecidedDec. that instructed refraining compensation labor majority opinion income. The is taxable question re- this was holds that light jury. solved my opinion stipulated facts it only, law awas
there pre- remained factual issue no jury. sented Judge’s affirm the I would “ ‘viewing the evidence and