It never occurred to me that a Tax Court decision could star in a motion picture, but it has happened. The film has a pretty provocative title On The Basis of Sex, but they don't mean it that way. Felicity Jones portrays a young Ruth Bader Ginsburg (RBG) ... and Arnie Hammer as her husband Martin Ginsburg. I have it on very good authority that Martin Ginsburg was a first-rate tax attorney (See follow-up). And another star in the movie is a Tax Court decision. How often does that happen? ...
The decision is Charles E. Moritz v. Commissioner of Internal Revenue, which was decided by Judge Norman O. Tietjens in 1970 in favor of the IRS. Mr. Moritz had represented himself — not surprisingly given the low stakes. The decision was appealed to the Tenth Circuit where Mr. Moritz was represented by Ruth Bader Ginsburg and Martin Ginsburg backed up by Melvin Wulf of the ACLU and Weil, Gotshal & Manges. The lead attorney for the United States was James Bozarth played by Jack Reynor. Sam Waterston, who has played a lawyer on TV more than once, portrays Solicitor General Erwin Griswold. ...
Mr. Moritz was contesting a $328.80 deficiency. He had taken a deduction under Code Section 214 - Expenses for household and dependent care services necessary for gainful employment. Mr. Moritz was an editor for the publishing firm Lea & Feibiger. He had an office in his home, but he had to travel extensively to meet with authors.
The travel required him to spend money to help care for his mother, who lived with him. She was 89 years old and confined to a wheelchair. Mr. Moritz hired Cleeta Stewart to help care for his mother. He paid her $1,250 of which $600 was attributable to the assurance of Mrs. Moritz's well being.
Code Section 214 as in effect in 1968, the year in question read (emphasis added):
There shall be allowed as a deduction expenses paid during the taxable year by a taxpayer who is a woman or widower, or is a husband whose wife is incapacitated or is institutionalized, for the care of one or more dependents (as defined in subsection (d)(1)), but only if such care is for the purpose of enabling the taxpayer to be gainfully employed.
Since Mr. Moritz had never married, he didn't qualify. ... "Petitioner is treated no differently from other unmarried, past or present, males. His remedy lies with Congress, and not in this Court." ...
The appeal to the Tenth Circuit was argued by the Ginsburgs. They split the oral arguments with Martin doing the tax piece and RBG handling the constitutional issue. ...
[T]he Tenth Circuit held for Moritz:
We conclude that the classification is an invidious discrimination and invalid under due process principles. It is not one having a fair and substantial relation to the object of the legislation dealing with the amelioration of burdens on the taxpayer. See Reed v. Reed, supra, 404 U.S. at 76, 92 S.Ct. 251. The statute did not make the challenged distinction as part of a scheme dealing with the varying burdens of dependents' care borne of taxpayers, but instead made a special discrimination premised on sex alone, which cannot stand.
It was the first time a provision of the Internal Revenue Code had been declared unconstitutional.
That's not quite as big a deal as it might sound. The tax law was not codified until 1939 and then recodified in 1954. In 1895, the Supreme Court ruled that the income tax was unconstitutional since to the extent it reached income from property it was a direct tax requiring apportionment. (Pollock v Farmers' Loan and Trust Company) That's why the Sixteenth Amendment needed to be passed.
A.O. Scott reviewed the film for the New York Times. He doesn't even mention the Tax Court or what circuit was involved. I love the New York Times, but when it comes to their tax coverage, don't get me started.
I was hoping for something from the most indefatigable chronicler of the Tax Court in all the blogosphere, Lew Taishoff, but he is passing.
Mr Reilly, I yield to no one in my admiration for Justice Ginsburg. But I report present cases only. I leave to you the Moritz case, and what will surely be a scintillating blogpost, which I eagerly look forward to reading.
Be sure to check out the trailer. The best line is around 1:05 when Felicity Jones remarks "I don't read Tax Court cases". RBG gave Ms. Jones credit for nailing the Brooklyn accent and I have to say that she sounded pretty good to me.
In the small world department, I clerked for the late William J. Holloway Jr., Chief Judge of the U.S. Court of Appeals for the Tenth Circuit. Judge Holloway wrote the opinion in Moritz v. Commissioner, 469 F.2d 466 (10th Cir. 1972), and a fictional Judge Holloway appears in the movie. To commemorate Judge Holloway's first 15 years on the bench, his law clerks (including my future wife) presented him with a book in 1984 compiling all of the opinions he had written, including Moritz. I wrote about Judge Holloway's powerful impact on my professional and personal life here.