118 T.C. No. 24
UNITED STATES TAX COURT
THOMAS WILLIAM MCADAMS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 12763-00. Filed May 15, 2002.
P married his wife (W) in 1947. P and W were not
legally separated or divorced. During 1998, W resided
in Boise, Idaho (Boise address). During 1998, P stayed
at the Boise address in excess of 30 days. P and W
maintained separate bedrooms at the Boise address.
In 1998, P received $11,181.60 in Social Security
income. P filled out the Social Security Benefits
Worksheet associated with his 1998 tax return. P
listed $25,000 as his “base amount” because he was
married and believed that he lived apart from W for the
entire year. On his 1998 tax return, P claimed
“married filing separately” status, reported $11,181.60
of Social Security benefits, and reported $0 as the
taxable amount of his Social Security benefits.
In the notice of deficiency, R increased P’s
interest income by $52 and reduced P’s “base amount” to
zero, thereby increasing the taxable amount of P’s
Social Security benefits.
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Held: For purposes of sec. 86(c)(1)(C)(ii),
I.R.C., “live apart” means living in separate
residences. P and his wife lived in the same residence
at least 30 days during the taxable year in issue.
Accordingly, P did not live apart from his spouse at
all times during the taxable year, and P’s “base
amount” pursuant to sec. 86(c)(1), I.R.C., is zero.
Held, further, sec. 86, I.R.C., is not
unconstitutional.
Thomas William McAdams, pro se.
Kay Hill, for respondent.
VASQUEZ, Judge: Respondent determined a deficiency of
$1,106 in petitioner’s Federal income tax for 1998. After
concessions,1 the issues for decision are: (1) Whether
petitioner did not “live apart” from his spouse at all times
during 1998, and (2) whether section 862 is unconstitutional.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time he filed the
petition, petitioner resided in Ninilchik, Alaska.
As of the time of trial, petitioner was 74 years old and
retired from the U.S. military. Petitioner has a bachelor’s
1
Petitioner concedes that his correct amount of interest
income for 1998 was $530 and not $478.64 as reported on his 1998
Federal individual income tax return.
2
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue.
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degree in social work and a master’s degree in human relations.
During his last 22 years in the military, he taught classes about
race relations and nuclear weapons at the Command General Staff
College in Fort Leavenworth, Kansas.
In 1947, petitioner married Norma McAdams. During the year
in issue and up to the date of trial, petitioner and Mrs. McAdams
were married. As of the date of trial, petitioner and Mrs.
McAdams had not legally separated.
During 1998, Mrs. McAdams resided at 4802 Shirley Avenue,
Boise, Idaho (Boise address). Petitioner’s two children, four
grandchildren, and two great-grandchildren all reside in Boise,
Idaho.
During 1998, petitioner used the Boise address as a mailing
address. Petitioner received mail and telephone messages at the
Boise address. Petitioner kept “things” at the Boise address.
From approximately April 15 through October 15, petitioner
lived in Alaska. During the rest of the year, petitioner resided
in “the lower 48”--i.e., in the continental United States. When
in the lower 48, petitioner traveled in a “fifth-wheel” trailer
to Wyoming, Arizona, Utah, Nevada, and California. When he was
in Boise, he stayed at the Boise address.
During 1998, petitioner stayed at the Boise address in
excess of 30 days. He parked his fifth-wheel trailer at the
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Boise address and slept inside the house located at the Boise
address. Petitioner and Mrs. McAdams maintained separate
bedrooms at the Boise address.
During 1998, petitioner’s main source of income was his
military retirement pay. During 1998, petitioner also received
Social Security income in the amount of $11,181.60. Petitioner
received a Form SSA-1099, Social Security Benefit Statement, for
1998 reporting “Benefits Paid in 1998” and “Net Benefits for
1998” in the amount of $11,181.60.
Petitioner filed his 1998 Federal individual income tax
return claiming “Married filing separately” status. When he
prepared his 1998 tax return, petitioner filled out the Social
Security Benefits Worksheet. Petitioner listed $25,000 as his
“base amount” because he believed that he lived apart from his
spouse for the entire year. On his return, petitioner reported
$11,181.60 of Social Security benefits and zero as the taxable
amount of his Social Security benefits.
In the notice of deficiency, respondent increased
petitioner’s interest income by $52 and reduced petitioner’s
“base amount” to zero, thereby increasing the taxable amount of
petitioner’s Social Security benefits to $9,218.
OPINION
Section 86 provides for the taxability of Social Security
benefits pursuant to a statutory formula. If a taxpayer’s
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“modified adjusted gross income” plus one-half of the Social
Security benefits received during the taxable year exceeds the
“base amount”, then a portion of the taxpayer’s Social Security
benefits are includable in gross income. Sec. 86(a) through (d).
A. Base Amount and Living Apart at All Times During the
Taxable Year
Section 86(c)(1) provides that for purposes of section 86,
the term “base amount” means:
(A) except as otherwise provided in this
paragraph, $25,000,
(B) $32,000 in the case of a joint return, and
(C) zero in the case of a taxpayer who--
(i) is married as of the close of the
taxable year (within the meaning of section
7703) but does not file a joint return for
such year, and
(ii) does not live apart from his spouse
at all times during the taxable year.
When he prepared his 1998 tax return, petitioner filled out
the Social Security Benefits Worksheet. Petitioner listed
$25,000 as his “base amount” because he was married and believed
that he lived apart from his spouse for the entire year.
Respondent contends that petitioner did not live apart from his
wife at all times during the taxable year within the meaning of
section 86(c)(1)(C)(ii). Whether a taxpayer did not “live apart”
from his spouse “at all times during the taxable year”, within
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the meaning of section 86(c)(1)(C)(ii), is an issue of first
impression.3
We do not find any ambiguity in the language “at all times
during the taxable year.” “All” means “whole”, “entire”, “each
and every one”, or “each and every thing”.4 Webster’s II New
Riverside University Dictionary 93 (1994).
Neither the statute nor the legislative history defines what
“live apart” means. See S. Rept. 98-23, at 27 (1983), 1983-2
C.B. 326, 328; H. Conf. Rept. 98-47, at 122 (1983), 1983-2 C.B.
336, 340. Similar language to that contained in section
86(c)(1)(C)(ii) is contained in sections 22(e)(1), 66(a)(2)(A),
152(e)(1)(A)(iii), 219(g)(4)(B), and 469(i)(5)(B)(ii).
Therefore, we look to the case law interpreting the phrase “live
apart” contained in those sections.
In Costa v. Commissioner, T.C. Memo. 1990-572, in 1970 the
taxpayer and her husband purchased a residence located in
Fairfax, California (Fairfax residence). In 1982, as a result of
3
The resolution of this issue does not depend on which
party has the burden or proof. We resolve this issue on the
basis of a preponderance of evidence in the record.
4
We note that this construction is supported by the
legislative history, which provides that the base amount is “zero
in the case of a married individual filing a separate return,
unless he or she lived apart from his or her spouse for the
entire taxable year”. S. Rept. 98-23, at 27 (1983), 1983-2 C.B.
326, 328 (emphasis added).
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marital problems, the taxpayer moved out of the Fairfax
residence. During 1982, the taxpayer’s husband also moved out of
the Fairfax residence. In 1983, the taxpayer resumed residing at
the Fairfax residence. In 1984, the taxpayer’s husband visited
the Fairfax residence several times on an intermittent basis, he
used the Fairfax residence address for receiving mail, he kept
documents and clothes there, he received telephone messages
there, he had a key to the Fairfax residence, and he came and
went at his convenience. The taxpayer did not file a joint
return with her husband for 1984. The taxpayer did not obtain a
formal termination or separation, and as of the time of trial the
taxpayer was still legally married to her husband.
We concluded that, for purposes of section 66(a), the
taxpayer “did not live apart at all times during the year as
required by statute” for 1984. Costa v. Commissioner, T.C. Memo.
1990-572. We based our holding on the fact that during 1984 the
taxpayer’s husband intermittently resided at the Fairfax
residence. Id.
In Dawkins v. Commissioner, T.C. Memo. 1991-225, during 1987
the taxpayer and his wife were in the process of obtaining a
divorce. During 1987, the taxpayer had not obtained a legal
separation, and the taxpayer, his wife, and his three children
all resided in the same household. The taxpayer and his wife,
however, maintained separate quarters under the same roof.
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We concluded that, for purposes of section 152(e), the
taxpayer and his wife were not “living apart” because they lived
under the same roof. Dawkins v. Commissioner, T.C. Memo. 1991-
225. In determining what “living apart” meant, we referred to
several cases that considered what living apart meant in the
context of alimony payments and being separated (sections 71 and
215). Id. In those cases, courts held that “living apart” meant
living in separate residences. Lyddan v. United States, 721 F.2d
873, 876 (2d Cir. 1983); Washington v. Commissioner, 77 T.C. 601,
605 (1981) (a Court-reviewed decision, disagreeing with the U.S.
Court of Appeals for the Eighth Circuit’s holding in Sydnes v.
Commissioner, 577 F.2d 60 (8th Cir. 1978), revg. 67 T.C. 170
(1977), that taxpayers could be treated as separated when both
are living under the same roof); Coltman v. Commissioner, T.C.
Memo. 1991-127, affd. 980 F.2d 1134 (7th Cir. 1992).
Additionally, we have explored the concept of living apart
as it related to sections 2 and 7703. As it relates to these
sections, we held that living apart required geographical
separation and living in separate residences. Chiosie v.
Commissioner, T.C. Memo. 2000-117; Hopkins v. Commissioner, T.C.
Memo. 1992-326.
Furthermore, prior to amendment by section 121 of the Tax
Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2109, section 85(b)
defined a “base amount” for purposes of computing the taxable
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amount of unemployment compensation similarly to section
86(c)(1). Section 1.85-1(b)(4), Income Tax Regs., which was
still in effect during the year in issue, provided:
A taxpayer does not “live apart” from his or her spouse
at all times during a taxable year if for any period
during the taxable year the taxpayer is a member of the
same household as such taxpayer’s spouse. A taxpayer
is a member of a household for any period, including
temporary absences due to special circumstances, during
which the household is the taxpayer’s place of abode. A
temporary absence due to special circumstances includes
a nonpermanent absence caused by illness, education,
business, vacation, or military service.
We conclude that for purposes of section 86(c)(1)(C)(ii)
“living apart” means living in separate residences.
Petitioner contends that because he and his wife maintained
separate bedrooms this is sufficient to find that they “lived
apart”. We disagree. See Dawkins v. Commissioner, supra. We
decline to explore the quality of a marriage, or to infer some
form of constructive absence of one spouse, when the spouses live
under one roof. See Lyddan v. United States, supra at 876;
Chiosie v. Commissioner, supra.
Petitioner also argues that he merely “visited” his wife and
did not live with her. In Costa v. Commissioner, supra, we
concluded that intermittent visits to the taxpayer’s home by the
taxpayer’s spouse were sufficient to find that the spouse and the
taxpayer did not live apart. In the case at bar, petitioner’s
“visits” lasted in excess of 30 days. Even if we term
petitioner’s stay at the Boise address a visit, petitioner
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resided in the same house with his wife during this time.
We conclude that for purposes of section 86(c)(1)(C)(ii)
petitioner did not live apart from his spouse at all times during
the taxable year. Accordingly, his “base amount” for 1998 was
zero.
B. Constitutionality
Petitioner’s final argument is leveled at the
constitutionality of section 86. In essence, petitioner
questions the fairness of section 86. In San Antonio Indep. Sch.
Dist. v. Rodriguez, 411 U.S. 1, 41 (1973), the U.S. Supreme Court
noted that “No scheme of taxation, whether the tax is imposed on
property, income, or purchases of goods and services, has yet
been devised which is free of all discriminatory impact.” We
have repeatedly held that section 86 does not suffer any
constitutional infirmities. Thomas v. Commissioner, T.C. Memo.
2001-120; Clark v. Commissioner, T.C. Memo. 1998-280, affd.
without published opinion 187 F.3d 641 (8th Cir. 1999); Roberts
v. Commissioner, T.C. Memo. 1998-172, affd. without published
opinion 182 F.3d 927 (9th Cir. 1999). Accordingly, we deny
petitioner’s constitutional claim.
To reflect the foregoing,
Decision will be entered
for respondent.