Jconcurring: While I subscribe to the views expressed by Judge Baum in the first portion of his dissenting opinion, I cannot agree with his ultimate conclusions, and concur with the result reached by the maj ority here. I feel, however, that the wrong reasons are relied upon, and I can see no sound basis for distinguishing between a “new” and an “old” employee. Such distinction is not required or sanctioned by the statute, nor can I agree that the respondent has drawn the distinction in his previous rulings as indicated in the majority opinion.
I feel that we should not compound the confusion already evident from the line of cases involving this issue by deciding this case on what seems to me to be the unrealistic and arbitrary basis of oldness or newness of the employment involved. Indeed, in our most recent decision on the question we properly side-stepped this quagmire and, although it was clear that the taxpayer there was not a “new” employee, we held that the payments made by his employer were taxable income to him because they were compensatory in nature. Harris W. Bradley, 39 T.C. 652 (1963). This, in my view, is the sole issue in these cases, and following the rationale of Commissioner v. Duberstein, 363 U.S. 278 (1960), and Commissioner v. LoBue, 351 U.S. 243 (1956), as we did in Bradley, we should look to the particular facts and circumstances of each case. This is true, as I see it, as to any payments made by an employer to an employee whether they are for moving expenses, real estate commissions, or to make good an economic loss sustained as the result of the sale of a home.
It is true that in all the cases involving new employment, the payment of moving expenses have been held to be taxable income. As I read the cases, however, these decisions do not turn on the fact of newness but rather on the fact that the agreement to pay was made as a part of the employment contract and as an inducement to the employee to accept a new job and move to a new location. Such payments are, therefore, compensatory in nature. In United States v. Woodall, 255 F. 2d 370 (C.A. 10, 1958), certiorari denied 358 U.S. 824, no mention of “new” or “old” employees, as such, was made and the court did not attempt to draw a distinction on such a basis. Rather, the rationale was that the payment of moving expenses “was in the nature of a cash bonus as an inducement to accept employment.” It was held to be taxable income because it represented compensation for personal services.
The fact that in the new employment cases the facts generally support a finding of taxable income does not mean that any payment to an “old” employee is tax free. Cf. Harris W. Bradley, supra. A careful reading of the rulings amply demonstrates this. The respondent uses clearly qualifying language throughout Rev. Rul. 54-429, 1954-2 C.B. 53, which I feel has been ignored in the majority opinion. Only where the employee is transferred “in the interest of his employer” and “primarily for the benefit of the employer” is the payment or reimbursement of expenses generally regarded as noncompensatory in nature. The ruling specifically provides that “In any case in which the transfer is made primarily for the benefit of the employee, any allowance or reimbursement received by the employee is includible in his gross income.” In the light of this qualifying language it is clear that Rev. Rui. 5A-429 does not support the contention that all payments to “old” employees are nontaxable.
I feel that the inevitable result of further expression of an arbitrary discrimination between “old” and “new” employees as the determining factor in this line of cases will be to compound confusion. We need go no further than we did in Bradley or than the Tenth Circuit went in Woodall. Payments by an employer in the nature of bonuses, for services either rendered or to be rendered by an employee, are compensatory and constitute income taxable to him. This should be the result whether the employee be old or new.
With these observations, I concur in the result.
Fisher, J., agrees with this concurring opinion.