Howard Chandler Christy
via Wikimedia Commons
What amendment to the constitution of the United States comes to mind when you think of federal income taxes? The sixteenth? That’s no surprise, since the thirty words of the sixteenth amendment authorize a federal income tax.
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.
The taxpayer in T.C. Memo. 2013-111 (Field) has a different amendment in mind—the fifth. No, not the part about not having to be a witness against yourself. The fifth amendment also forbids discrimination that is “so unjustifiable as to be violative of due process”—in other words, it provides for equal protection under the law.
What’s the definition of equal protection? Look to yet another amendment to find out. According to the US Supreme Court, fifth amendment equal protection claims are the same as equal protection claims under the fourteenth amendment, which assures “equal application” of law.
Equal application of law—equal protection—means the result of a law is not relevant as long as there is no discrimination in its application.
In Field, the taxpayer believes she is being discriminated against because she cannot claim a $10,144 adoption credit on her federal income tax return. The problem? She claimed the filing status of married filing separately instead of choosing to file a joint return with her spouse, and the rules for claiming the adoption credit require a married couple to file a joint return. (While there are exceptions to the general rule, none of them applied.)
The tax court labels this rule a “tax classification”, and, following Supreme Court opinions, says such a classification is constitutional if it has a rational basis to a legitimate purpose.
And what about the fact that the IRS allowed the deduction in prior years under the same circumstances? Does lack of consistency equal discrimination?
No, because each tax year stands on its own.
The result: No discrimination means no credit.