1976 U.S. Tax Ct. LEXIS 61 | Tax Ct. | 1976
Lead Opinion
OPINION
Respondent determined deficiencies in petitioner’s income tax for the years 1972 and 1973 in the respective amounts of $226 and $681. The sole issue presented is whether petitioner is liable for the tax on self-employment income under sections 1401 and 1402,1.R.C. 1954,
All of the facts have been stipulated and are summarized below. The stipulation of facts together with exhibits attached thereto are incorporated herein by this reference.
Petitioner Julia C. Henson maintained her legal residence in Los Angeles, Calif., at the time of filing the petition herein. Petitioner filed timely Federal income tax returns for the taxable years 1972 and 1973 with the Internal Revenue Service in Fresno, Calif.
During the taxable years at issue petitioner was a self-employed bookkeeper. She earned $3,012.75 in 1972 and $8,511.25 in 1973, of “self-employment income” within the meaning of section 1402(b), but paid no self-employment taxes for either of those years.
Respondent determined deficiencies in petitioner’s income tax based upon her liability for self-employment tax and issued notices of deficiency on July 16, 1974, for the taxable year 1972 and on October 11,1974, for the taxable year 1973.
On August 15, 1973, petitioner filed T.D. Form 4029 (Application for Exemption from Tax on Self-Employment Income), based upon her membership in the Sai Baba Society. The Social Security Administration considered petitioner’s application and recommended that it be disapproved. On January 6, 1976, petitioner’s application was formally disapproved by the District Director of the Fresno Internal Revenue Service Center.
Since December 1972 petitioner has been a devotee of Sai Baba. Sai Baba is a living religious figure in the Country of India who was born on November 23, 1926, and was worshiped as a holy figure before December 31, 1950. Some of the teachings of Sai Baba have been translated and are contained in seven volumes entitled “Sathya Sai Speaks.” One of the tenets and teachings of Sai Baba is that individuals should rely upon God to provide their needs rather than on public or private institutions of man.
As an adherent to and based on the tenets and teachings of Sai Baba, petitioner is opposed to the acceptance of the benefits of any private or public insurance which makes payments in the event of death, disability, old age, or retirement, or which makes payments toward the cost of, or provides services for, medical care. Petitioner is conscientiously opposed to any form of insurance since she feels that it is detrimental to her spiritual growth and her relationship with God. Petitioner was conscientiously opposed to any form of insurance or public assistance prior to becoming a devotee of Sai Baba, but it was her exposure to Sai Baba’s teachings that gave her the strength to take a firm stand on the matter. Petitioner does not carry any form of public or private insurance which would make payment in the event of her death, disability, retirement, or old age, nor does she carry medical care insurance. However, petitioner does provide insurance for her employees and does recommend insurance to her clients who are not devotees of Sai Baba.
Petitioner has no religious scruples against payment of taxes, except those which are designed to provide insurance or insurance benefits.
It is not the practice of the Sai Baba Society to make reasonable provisions for its dependent members in view of the general level of living of such members. Apparently, this was the basis for respondent’s deficiency determination.
Section 1402(h)
Obviously, petitioner does not meet the requirements for exemption under section 1402(h)(1)(D) because it is stipulated that the Sai Baba Society does not provide for its dependent members. Petitioner does not contend otherwise. However, she does contend that somehow this Court should ignore or eliminate the requirement of paragraph (D) and conclude that she does qualify for exemption under section 1402(h). This we cannot do; Congress enacted the provision and we cannot write it out of the law.
Petitioner also levels an attack upon this Code section based on provisions of articles I and V of the Constitution of the United States.
This Court has previously considered the arguments made herein by petitioner in William E. Palmer, 52 T.C. 310 (1969), and several subsequent Memorandum Opinions
Petitioner’s attempt to distinguish the facts herein from those in Palmer is futile. We perceive no distinction herein which would require a different analysis or conclusion from that in our prior decisions; nor do we perceive any reason to disturb our prior holdings, which we will continue to follow.
The only argument made by petitioner which warrants further discussion concerns the existence of separate exemptions in subsection (e)
Section 1402(e) prescribes the conditions under which an individual who is “(A) a duly ordained, commissioned, or licensed minister of a church or a member of a religious order * * * or (B) a Christian Science practitioner” may obtain an exemption from self-employment tax imposed on income received “with respect to services performed by him as such minister, member, or practitioner.”(Emphasis supplied.) This subsection was added to the Code by section 201(c) of the Social Security Amendments of 1954.
It is inherent in the exercise of the power to tax that a state be free to select the subjects of taxation and to grant exemptions. * * * This Court has repeatedly held that inequalities which result from a singling out of one particular class for taxation or exemption; infringe no constitutional limitation. * * *
We find that the different requirements for exemption from tax provided for the different classifications under sections 1402(e) and (h) have a rational basis and do not arbitrarily deprive petitioner of her right to due process of law. See Abney v. Campbell, 206 F.2d 836 (5th Cir. 1953), cert. denied 346 U.S. 924 (1954). Nor do they provide for “an establishment of religion” or interfere with petitioner’s “free exercise” of her religion. See William E. Palmer, supra, and the Memorandum Opinions following Palmer cited in n. 5.
Decisions will be entered for the respondent.
All section references are to the Internal Revenue Code of 1954, as amended, unless otherwise stated.
(h) Members of Certain Religious Faiths.—
(1) Exemption — Any individual may file an application (in such form and manner, and with such official, as may be prescribed by regulations under this chapter) for an exemption from the tax imposed by this chapter if he is a member of a recognized religious sect or division thereof and is an adherent of established tenets or teachings of such sect or division by reason of which he is conscientiously opposed to acceptance of the benefits of any private or public insurance which makes payments in the event of death, disability, old-age, or retirement or makes payments toward the cost of, or provides services for, medical care (including the benefits of any insurance system established by the Social Security Act). Such exemption may be granted only if the application contains or is accompanied by—
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and only if the Secretary of Health, Education, and Welfare finds that—
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(D) it is the practice, and has been for a period of time which he deems to be substantial, for members of such sect or division thereof to make provision for their dependent members which in his judgment is reasonable in view of their general level of living, * * *
Art. I: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; * * *
Art. V: No person shall be * * * deprived of life, liberty, or property, without due process of law; * * *
Alan Lerner, T.C. Memo. 1975-60; Ronald E. Randolph, T.C. Memo. 1969-289; see Leonard H. Church, T.C. Memo. 1970-Í46.
SEC. 1402(e). Ministers, Members of Religious Orders, and Christian Science Practitioners.—
(1) Exemption. — Any individual who is (A) a duly ordained, commissioned, or licensed minister of a church or a member of a religious order * * * upon filing an application * * * together with a statement that either he is conscientiously opposed to * * * acceptance * * * of any public insurance [etc.] * * * shall receive an exemption from the tax * * *
Pub. L. No. 761.