                                                 JONATHAN E. STROMME AND MARYLOU STROMME,
                                                   PETITIONERS v. COMMISSIONER OF INTERNAL
                                                            REVENUE, RESPONDENT
                                                        Docket No. 14706–09.                     Filed March 13, 2012.

                                                  Ps owned two houses during the years at issue. They lived
                                                in one of those houses (on LaCasse Drive) and worked (but
                                                did not live) in the other house (on Emil Avenue). In the
                                                house on Emil Avenue they provided lodging for individuals
                                                with developmental disabilities. The county paid sums for the
                                                care of these individuals. Ps reported the amounts on their
                                                tax returns but then excluded them from income. Held: Ps
                                                cannot exclude the payments received to provide foster care
                                                under I.R.C. sec. 131 because they did not live in the house
                                                in which they provided lodging for the developmentally dis-
                                                abled adults.

                                           Jay B. Kelly, for petitioners.
                                           Christina L. Cook, for respondent.



                                                                                                                                       213




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                                      214                 138 UNITED STATES TAX COURT REPORTS                                     (213)


                                        COLVIN, Chief Judge: In 2005 and 2006 three (and then
                                      four) developmentally disabled adults lived in a house on
                                      Emil Avenue in Shoreview, Minnesota. The Emil Avenue
                                      house was owned by Marylou and Jonathan Stromme, who
                                      cared for their clients and managed the property. The local
                                      government paid them more than $250,000 in 2005 and more
                                      than $300,000 in 2006 for providing this foster care service.
                                      The Code makes these payments tax free if the clients were
                                      cared for in the Strommes’ ‘‘home’’. But as discussed below
                                      the Strommes owned and resided in another home, and
                                      worked in, but did not live in, the house on Emil Avenue in
                                      Shoreview. Thus we hold that they may not exclude the
                                      foster care payments from income for the years at issue. 1

                                                                          FINDINGS OF FACT

                                        Judge Holmes, who was the trial Judge in this case, fully
                                      agrees with the findings of fact herein. The Strommes were
                                      Minnesota residents when they filed their petitions.
                                        Marylou Stromme grew up as one of 10 siblings in a small
                                      home, and it was her relationship with one of her brothers,
                                      Danny, that inspired her vocation. Danny was develop-
                                      mentally disabled and, following the custom of the time,
                                      had been sent to live in an institution called the Lake
                                      Owasso Children’s Home (which was later renamed the
                                      Lake Owasso Residence). Ms. Stromme stayed close to her
                                      brother, and from about the age of 12 began making regular
                                      weekend visits to the institution. Danny eventually was able
                                      to move in with the Strommes, and Ms. Stromme cared for
                                      him until his death in 2001.
                                        The course of her brother’s life left Ms. Stromme with a
                                      strong desire to help those with developmental disabilities.
                                      Before Danny died, she had become a board member of the
                                      Lake Owasso Residence. She had long been acquainted with
                                      the case managers there, and after Danny’s death one of
                                      them suggested that she think about operating a group
                                      home—a smaller residence usually in a family-friendly
                                      community that contemporary thinking has concluded pro-
                                      vides a better life for developmentally disabled adults than
                                         1 Unless otherwise noted, all section references are to the Internal Revenue Code (Code) in

                                      effect for the years at issue; all Rule references are to the Tax Court Rules of Practice and Pro-
                                      cedure.




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                                      (213)                         STROMME v. COMMISSIONER                                           215


                                      large congregate care. But where? At the time, Ms. Stromme
                                      and her husband Jonathan Stromme owned two houses in
                                      Shoreview: one on Mound Avenue and another on Emil
                                      Avenue. They lived at the Mound Avenue house with their
                                      children and had purchased the Emil Avenue house as an
                                      investment in April 2001. 2
                                        Petitioners chose to develop the Emil Avenue house as a
                                      group home. Mr. Stromme oversaw the extensive renovation
                                      of the Emil Avenue house. He added a fourth bedroom, a
                                      bathroom, and a living area in the basement and added a
                                      deck with a wheelchair ramp on the outside. He also sought
                                      the advice of a certified public accountant (C.P.A.), and then
                                      he and his wife started doing business as SISTER Group
                                      Home. 3 After the Strommes finished these preparations, the
                                      Ramsey County Human Services Department licensed them
                                      in 2003 as foster care service providers. The Emil Avenue
                                      house, with four bedrooms and an office area where the
                                      Strommes kept detailed records of client activities, was ready
                                      for business.
                                        Ms. Stromme took charge of caring for the clients. Doctor’s
                                      appointments were a constant, but the clients also went
                                      around town to ‘‘do everything like you would do as a normal
                                      person’’. She organized events for them such as making
                                      Easter baskets, painting, and mowing lawns—including the
                                      lawn at the Strommes’ other house. 4 According to Ms.
                                      Stromme, she always had a client with her and the constant
                                      interaction was a ‘‘24/7 job’’.
                                        To handle these client demands, the Strommes also had
                                      help. They hired six employees—most, including Jon and
                                      Molly, were family members, but at least one was not. These
                                      employees helped out both day and night. The sleeping
                                      arrangements, however, were tight; for part of 2005 there
                                      was an open bedroom, but for the rest of that year and 2006
                                      the employees and the Strommes had to sleep on either the
                                      futon or the convertible sofa while they were on duty.

                                        2 For the years in issue, the Strommes had claimed the Emil Avenue house as their ‘‘home-

                                      stead’’, affording them some real property tax relief. See, e.g., Minn. Stat. Ann. sec. 273.1384,
                                      subdiv. 1 (West 2007).
                                        3 SISTER stands for Success in Special Needs Together Encouraging Residents.

                                        4 The reason for the last activity, according to the Strommes, was that a client ‘‘was ‘compul-

                                      sive’ about mowing grass’’, and in fact had to be monitored or else would mow all the time.




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                                      216                 138 UNITED STATES TAX COURT REPORTS                                     (213)


                                         Several neighbors saw the Strommes or their cars during
                                      the day. They saw them collecting mail there. And for all
                                      these neighbors knew, the Strommes lived there.
                                         What the Emil Avenue neighbors did not seem to know
                                      was that the Strommes owned another house. The Strommes
                                      sold their Mound Avenue house in April 2003 and moved into
                                      the one they bought on LaCasse Drive in nearby Anoka
                                      County. It was at the LaCasse Drive house that the
                                      Strommes held family get-togethers and celebrated the safe
                                      return of another son from service in Iraq. The LaCasse
                                      Drive house was also where they celebrated Thanksgiving
                                      and Christmas. Ms. Stromme found it a more restful place to
                                      recover from foot surgery. This was in part because the
                                      LaCasse Drive house was much larger than the one on Emil
                                      Avenue. Excluding the basement, the LaCasse Drive house
                                      had 2,808 square feet, in contrast to the 1,168 square feet of
                                      the Emil Avenue house—and it was large enough to
                                      accommodate the Strommes’ extended family and everyday
                                      life. Its six bedrooms often housed not only the Strommes
                                      and their two children, but also two other children from Ms.
                                      Stromme’s first marriage, plus Ms. Stromme’s brother, a
                                      niece, and two grandchildren. It also was large enough for
                                      the Strommes to bring their clients over for outings.
                                         Four of respondent’s witnesses—the Strommes’ neighbors
                                      on LaCasse Drive—had a good grasp of where the Strommes
                                      spent their time during 2005 and 2006, better than the Emil
                                      Avenue neighbors. The LaCasse Drive neighbors also knew
                                      the Strommes owned two houses, and those neighbors under-
                                      stood that the Strommes worked at the Emil Avenue house.
                                      They frequently saw Ms. Stromme leave in the morning to go
                                      to work at the Emil Avenue house and then return in the
                                      evening. They often saw Mr. Stromme working in the yard
                                      or on his cars; they saw both Strommes bringing in groceries
                                      and noted Ms. Stromme’s car was reliably in the driveway
                                      around dinnertime. They also credibly recounted scenes of
                                      the Strommes having ordinary suburban American fun, like
                                      returning from a Minnesota Wild hockey game or throwing
                                      a lively pool party—the Strommes had installed a pool in
                                      2005. The pool was one of the LaCasse Drive house’s great
                                      features, giving the Strommes, and sometimes their visiting
                                      clients, a place to relax.




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                                      (213)                         STROMME v. COMMISSIONER                                           217


                                        The Strommes and their neighbors had some disagree-
                                      ments. We will not memorialize these in any great detail but
                                      only note that the resulting police reports show that the
                                      Strommes were present at the LaCasse Drive house and
                                      reported it as their residence.
                                        In 2006 the Strommes separated. By November of that
                                      year they had sold the LaCasse Drive house—Mr. Stromme
                                      moved to a home in Forest Lake, Minnesota, and Ms.
                                      Stromme found her own place. The Strommes considered
                                      making the LaCasse Drive house a group home in lieu of
                                      selling it, though they were not licensed by Anoka County.
                                        The State of Minnesota paid SISTER about $256,662 in 2005
                                      and $305,561 in 2006. This enabled the Strommes, even after
                                      they took care of the Emil Avenue house and its clients, to
                                      pay the mortgage, the utilities, and the cost of improvements
                                      at the LaCasse Drive house. 5
                                        Respondent determined that the payments from the State
                                      of Minnesota were taxable. 6 After allowing the Strommes
                                      some business expense deductions, i.e., depreciation, employ-
                                      ment and real estate taxes, interest, and wages, respondent
                                      determined deficiencies and penalties that totaled more than
                                      $140,000.

                                                                                  OPINION

                                      I. Section 131
                                        The Strommes claim eligibility under the section 131 exclu-
                                      sion from income of qualified foster care payments. Under
                                      that section, petitioners may exclude the 2005 and 2006 pay-
                                      ments if they were:
                                        • made pursuant to a foster care program of a State;
                                        • paid by a State or political subdivision thereof, or a
                                      qualified agency; and

                                        5 The record is, for the most part, ambiguous about the exact cost of running SISTER Group

                                      Home. The Strommes drew less than bright lines between their personal expenses and the ex-
                                      penses of their clients. It is difficult for us to understand how certain expenses relating to trips
                                      to Mazatlan, Mexico, and to Treasure Island Resort and Casino in Welch, Minnesota, paid with
                                      SISTER’s American Express card, aided the four developmentally disabled adults living at the
                                      Emil Avenue house.
                                        6 The Strommes did report some taxable business income on their 2005–06 returns: $10,632

                                      from Ms. Stromme’s windshield repair business and a separate payment to Ms. Stromme of
                                      $2,400 for adult foster care, which she did not explain at trial.




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                                      218                 138 UNITED STATES TAX COURT REPORTS                                      (213)


                                        • paid to a foster care provider for the care of ‘‘a qualified
                                      foster individual in the foster care provider’s home.’’ 7
                                      See sec. 131(b)(1). The parties disagree about the third
                                      requirement. Does the phrase ‘‘foster care provider’s home’’
                                      merely require ownership, as petitioners contend; or does it
                                      mean the foster care must be provided in a taxpayer’s resi-
                                      dence, as respondent contends? We conclude that it means
                                      the foster care must be provided in a taxpayer’s residence. 8
                                           A. Ownership
                                         There are no regulations under section 131, and there is
                                      not much caselaw on the issue before us. 9 We explicate the
                                      meaning of ‘‘home’’ in section 131 by looking first to the text
                                      of the Code. If the meaning is plain, we generally enforce it
                                      according to its terms. See, e.g., United States v. Ron Pair
                                      Enters., Inc., 489 U.S. 235, 241–243 (1989). If the language
                                      is ambiguous, we can consider the legislative history. See,
                                      e.g., Cato v. Commissioner, 99 T.C. 633, 640–641 (1992).
                                         The only case on the meaning of ‘‘home’’ in section 131 is
                                      Dobra v. Commissioner, 111 T.C. 339 (1998). In Dobra, the
                                      taxpayers owned four houses where they cared for develop-
                                      mentally disabled people, but conceded that only one house
                                      was their ‘‘ ‘personal family residence.’ ’’ Id. at 340. The
                                      Dobras nevertheless argued that because they owned each
                                      house, they could exclude payments tied to the individuals in
                                      all four. Id. at 342. We held, however, that under section 131
                                      a person’s ‘‘home’’ is where he resides. 10 ‘‘Put more plainly,
                                      in order for a ‘house’ to constitute * * * [a home], petitioners
                                      must live in that house.’’ Id. at 345. Precedent fences us in:
                                        7 The sec. 131 requirements we list are those relevant to the Strommes’ situation for the years

                                      at issue.
                                        8 We need not consider whether the foster care may be provided in a taxpayer’s second home

                                      because in this case the care was not provided in petitioners’ second home; the place the care
                                      was provided was not petitioners’ primary or second home. For now, the better course is ‘‘to ob-
                                      serve the wise limitations on our function and to confine ourselves to deciding only what is nec-
                                      essary to the disposition of the immediate case.’’ Whitehouse v. Ill. Cent. R.R., 349 U.S. 366,
                                      372–373 (1955); Ashwander v. TVA, 297 U.S. 288, 345–346 (1936) (Brandeis, J., concurring); ac-
                                      cord Liverpool, N.Y. & Phila. S.S. Co. v. Emigration Comm’rs, 113 U.S. 33, 39 (1885). Our si-
                                      lence on the issue should not be construed as our agreement with either party’s argument.
                                        9 There is caselaw construing the phrases ‘‘paid by a State or political subdivision thereof or

                                      by a placement agency’’, see Cato v. Commissioner, 99 T.C. 633, 640–646 (1992), and ‘‘qualified
                                      foster individual’’, see Micorescu v. Commissioner, T.C. Memo. 1998–398.
                                        10 We also found that the legislative history of sec. 131 ‘‘provides little if any guidance to the

                                      meaning of ‘home’, for purposes of adult foster care, that cannot also be gleaned from the plain
                                      language of the statute.’’ Dobra v. Commissioner, 111 T.C. 339, 344 (1998).




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                                      (213)                          STROMME v. COMMISSIONER                                           219


                                      The Strommes’ mere ownership of the Emil Avenue house is
                                      insufficient to make it their home.
                                            B. Did the Strommes Live at the Emil Avenue House?
                                         It was easy enough to decide that the Dobras did not live
                                      in more than one of their houses—hired help provided the
                                      care—but the Strommes spent a lot of time at the Emil
                                      Avenue house in 2005 and 2006. Ms. Stromme had an office
                                      there, and that is where she kept records of the clients’ daily
                                      activities. Their neighbors regularly saw the Strommes at the
                                      house and saw the Strommes’ cars in the driveway. And
                                      respondent stipulated that the Strommes worked shifts at
                                      the Emil Avenue house.
                                         These facts show the Strommes were frequently present at
                                      and worked at the Emil Avenue house, but is that enough?
                                      We conclude that using a house for business 11 does not make
                                      it a residence. We interpret the Code’s use of the word
                                      ‘‘home’’ to mean the house where a person regularly performs
                                      the routines of his private life—for example, shared meals
                                      and holidays with his family, or family time with children or
                                      grandchildren.
                                         The Strommes did argue that the Emil Avenue house was
                                      a home in this sense. They pointed to the bedroom available
                                      to them there early in 2005, and then to the living room
                                      couch and basement sofa once the fourth client moved in. But
                                      they did not dispute that the other six employees also slept
                                      in the same locations when their turns for night shifts came.
                                      The Strommes focused as well on the location of their
                                      clothes, claiming that they had two dressers in the basement,
                                      with additional clothes stored in the laundry room. 12 Mr.
                                      Stromme also said that when he needed to stay at the
                                      LaCasse Drive house to make improvements, he would carry
                                      over personal items in a duffel bag. 13
                                           11 We
                                               do not read sec. 131 as prohibiting a profit motive.
                                           12 They
                                                 also claimed that they received both personal mail (such as Christmas cards) and busi-
                                      ness mail at the Emil Avenue house; but the record contained specific examples of only the lat-
                                      ter, some using the Emil Avenue address and others (e.g., tax documents and bank statements)
                                      the LaCasse Drive address.
                                         13 The fact that the Strommes homesteaded the Emil Avenue house, but not the LaCasse

                                      Drive house, also fails to convince us. The Strommes claimed that they could not homestead
                                      the LaCasse Drive house because it was not their home. We disagree. The Strommes listed the
                                      LaCasse Drive house as their principal residence on their 2003 Certificate of Real Estate Value
                                      filed with the State—rebutting their assertion. In fact, declaring the LaCasse Drive house their
                                                                                                    Continued




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                                      220                 138 UNITED STATES TAX COURT REPORTS                                     (213)


                                         The Emil Avenue neighbors either do not recall or never
                                      actually saw the living arrangements inside the Strommes’
                                      Emil Avenue house. And one of the Strommes’ employees,
                                      Daniel Hess, testified that Ms. Stromme did not always sleep
                                      at the Emil Avenue house during the shifts he worked.
                                         We have only the Strommes’ word, but their unwillingness
                                      to admit that the LaCasse Drive house was even one of their
                                      ‘‘homes’’ casts serious doubt on their claim about living at the
                                      Emil Avenue house. The Strommes said they had a plan to
                                      make the LaCasse Drive house a group home, which limited
                                      their use of that house during the years at issue to visits
                                      with their children, repair work, and outings with their cli-
                                      ents. They want us to believe that they did not eat lunch or
                                      dinner at the LaCasse Drive house and that Mr. Stromme
                                      slept there only when he needed to do repairs.
                                         Their actions do not match their words. The Strommes
                                      received a license from Ramsey County for the Emil Avenue
                                      house in a mere six months, even though they had to
                                      remodel the entire basement. In contrast, they never applied
                                      for a similar license from Anoka County during their more
                                      than three years at the LaCasse Drive house. And while
                                      their neighbors did see the Strommes working at the
                                      LaCasse Drive house, they also saw them doing everyday
                                      chores, from bringing in groceries and eating meals with the
                                      family to hosting late-night pool parties. Their neighbors on
                                      LaCasse Drive credibly testified that the Strommes said that
                                      they ‘‘worked’’ at Emil Avenue. We believe that admission
                                      and find that the Strommes lived at the LaCasse Drive
                                      house. It was a big house, with plenty of amenities. It was
                                      where they spent time with their children and grandchildren.
                                      It was the house where they lived their private life, while
                                      they worked at the Emil Avenue house. We therefore find
                                      that the LaCasse Drive house was their only home. 14 The
                                      homestead was not in their financial interest. The Emil Avenue house was eligible for the home-
                                      stead tax credit, but the LaCasse Drive house was not. The Strommes bought the LaCasse Drive
                                      house for $415,000 and the Emil Avenue house for $123,000. The homestead tax credit is phased
                                      out completely for property valued over $413,000. See Minn. Stat. Ann. sec. 273.1384, subdiv.
                                      1 (homestead credit equal to 0.4% of the first $76,000 of the property value minus 0.09% of the
                                      excess of $76,000).
                                        14 Although the Strommes sold the LaCasse Drive house in November 2006, it is unclear ex-

                                      actly when, and for where, Marylou Stromme left. Mr. Stromme claimed she went to the Emil
                                      Avenue house. A LaCasse Drive neighbor remembered Ms. Stromme’s moving to the Floral Bay
                                      Drive house. We do not know where the Strommes’ children moved. Without support for the
                                      position that Ms. Stromme in fact moved to the Emil Avenue house in 2006, see Rule 142(a),
                                      we cannot allow her an exclusion for even part of the year.




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                                      (213)                         STROMME v. COMMISSIONER                                           221


                                      payments that they received from the State of Minnesota in
                                      2005 and 2006 are therefore taxable income.
                                      II. Accuracy-Related Penalty
                                         Respondent also determined that the Strommes are liable
                                      for the penalty under section 6662(a) for each year in issue,
                                      claiming that the Strommes’ exclusions of the foster care
                                      payments were negligent or in disregard of rules or regula-
                                      tions or led to substantial understatements of income tax.
                                      See sec. 6662(b)(1) and (2). Negligence, as the regulations
                                      define it, is the failure to make a reasonable attempt to pre-
                                      pare one’s tax returns, keep adequate books and records,
                                      substantiate items properly, or otherwise comply with the
                                      Code. Sec. 1.6662–3(b)(1), Income Tax Regs. Disregard of
                                      rules includes careless, reckless, or intentional disregard of
                                      Code provisions or regulations. Sec. 1.6662–3(b)(2), Income
                                      Tax Regs. And an understatement of income tax is substan-
                                      tial if it is more than $5,000 or 10% of the tax required to
                                      be shown on the return, whichever is greater. Sec.
                                      6662(d)(1)(A).
                                         Respondent has met his burden of production for at least
                                      the substantial understatement ground by producing the
                                      income tax returns reflecting the error. See sec. 7491(c);
                                      Campbell v. Commissioner, 134 T.C. 20, 29 (2010), aff’d, 658
                                      F.3d 1255 (11th Cir. 2011). The amounts excluded resulted
                                      in substantial understatements of income tax—since the
                                      Strommes did not report any taxable income for 2005 and
                                      2006.
                                         But there is a reasonable cause and good faith defense to
                                      the penalty irrespective of whether it is based on negligence,
                                      intentional disregard, or a substantial understatement of
                                      income tax. See sec. 6664(c)(1). We find, taking into account
                                      all the relevant facts and circumstances, that the Strommes
                                      had reasonable cause for the positions taken on their returns
                                      and acted in good faith. See id.; sec. 1.6664–4(b)(1), Income
                                      Tax Regs. The Strommes reported the amounts of the
                                      receipts on their returns, albeit not as taxable income. They
                                      met all the other requirements of section 131. And while
                                      Dobra defines ‘‘home’’ as a ‘‘residence’’, the Strommes’ situa-
                                      tion was arguably different—the Dobras never litigated the
                                      question of whether they lived in more than one home. IRS




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                                      222                 138 UNITED STATES TAX COURT REPORTS                                     (213)


                                      publications do not even try to define what a ‘‘home’’ is in
                                      describing the foster care exclusion. Given the ambiguity in
                                      this area of the law, we find the Strommes’ confusion reason-
                                      able and honest. See Higbee v. Commissioner, 116 T.C. 438,
                                      449 (2001) (noting that an honest and reasonable misunder-
                                      standing of fact or law weighs against imposing an accuracy-
                                      related penalty) (citing section 1.6664–1(b)(1), Income Tax
                                      Regs.). On the basis of these facts, particularly the
                                      Strommes’ honest attempts to calculate their tax liabilities,
                                      we therefore find that the Strommes had reasonable cause to
                                      take the reporting position that they did.
                                        Respondent counters that there are clear indicators the
                                      Strommes did not act in good faith. Respondent notes they
                                      failed to produce records to substantiate their foster care
                                      expenses and failed to substantiate when the fourth client
                                      came to the Emil Avenue house. Respondent also suggests
                                      that the Strommes relied on their C.P.A. to create a section
                                      131 ‘‘facade’’. The Strommes, however, did keep records. And
                                      the date that the fourth client entered the group home would
                                      not have changed the character of payments.
                                        We therefore reject respondent’s determination that the
                                      Strommes owe accuracy-related penalties.
                                        To reflect the foregoing,
                                                                          Decision will be entered under Rule 155.
                                        Reviewed by the Court.
                                        COHEN, HALPERN, FOLEY, VASQUEZ, GALE, THORNTON,
                                      MARVEL, GOEKE, WHERRY, KROUPA, HOLMES, GUSTAFSON,
                                      PARIS, and MORRISON, JJ., agree with this opinion of the
                                      Court.



                                        HOLMES, J., concurring: I agree with nearly everything in
                                      the opinion of the Court, except where it states that the
                                      Commissioner argues that the phrase ‘‘foster care provider’s
                                      home’’ means that ‘‘foster care must be provided in a tax-
                                      payer’s residence’’. See op. Ct. p. 218. That’s not exactly what
                                      the Commissioner was arguing—in his brief and at trial, he
                                      argued that the phrase ‘‘foster care provider’s home’’ means
                                      that foster care must be provided in a taxpayer’s principal




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                                      (213)                         STROMME v. COMMISSIONER                                            223


                                      residence. See, e.g., Answering Br. for Respondent 24; Pre-
                                      trial Memorandum for Respondent 8.
                                         It is our failure to engage that argument that compels me
                                      to write separately.

                                                                                          I.
                                        The Commissioner argued throughout this case that the
                                      Emil Avenue house needs to be the Strommes’ principal resi-
                                      dence for section 131 to apply. He points to section 121’s
                                      home-sale exclusion, 1 and reads Dobra as excluding foster
                                      care payments from income only if the taxpayers provide care
                                      in their principal home. 2 The Strommes even went along
                                      with this and argued that the Emil Avenue house was their
                                      primary residence.
                                        I do not think that the Strommes had to argue quite so
                                      vociferously (and unconvincingly) because I disagree with the
                                      argument that ‘‘home’’ under section 131 means only a tax-
                                      payer’s principal residence. We held in Dobra that ‘‘in ordi-
                                      nary, everyday speech, the phrase * * * [foster care pro-
                                      vider’s home] means the place (or places) where petitioners
                                      reside.’’ Dobra v. Commissioner, 111 T.C. 339, 345 (1998)
                                      (emphasis added). As support for our reading, we looked else-
                                      where in the Code. See id. at 348. Section 2(b)(1), for
                                      example, says that a head of household has to ‘‘maintain[ ] as
                                      his home a household which constitutes for more than one-
                                      half of such taxable year the principal place of abode * * *
                                      of * * * a qualifying child * * * [or] a dependent.’’ The
                                      Ninth Circuit has held that this language does not limit a
                                      taxpayer to having only one home. See Dobra, 111 T.C. at
                                      347 (discussing Smith v. Commissioner, 332 F.2d 671 (9th
                                      Cir. 1964), rev’g 40 T.C. 591 (1963)); see also Muse v. United
                                      States, 434 F.2d 349, 353 (4th Cir. 1970). Acknowledging the
                                      Ninth Circuit’s decision, we clarified in Dobra that the rel-
                                        1 Section 121 excludes gain from the sale of a principal residence. If a taxpayer owns two resi-

                                      dences, he can apply section 121 to only one—the one, in light of the time he spends there dur-
                                      ing the year and other relevant factors, that is his principal residence. See sec. 1.121–1(b)(2),
                                      Income Tax Regs.
                                        2 The Commissioner took the one-home approach in a 1994 Technical Advice Memorandum.

                                      See Tech. Adv. Mem. 9429004 (July 22, 1994). We don’t give Technical Advice Memoranda any
                                      more deference than we would a litigating position taken by the Commissioner. See sec.
                                      6110(b)(1)(A), (k)(3); CSI Hydrostatic Testers, Inc. v. Commissioner, 103 T.C. 398, 409 n.10
                                      (1994), aff’d, 62 F.3d 136 (5th Cir. 1995).




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                                      evant inquiry for a ‘‘home’’ is whether the taxpayer resided
                                      in the house at issue. See Dobra, 111 T.C. at 348.
                                        We recently had another chance to construe a Code section
                                      where Congress used the word ‘‘home’’ without nailing ‘‘prin-
                                      cipal’’ to it. See Driscoll v. Commissioner, 135 T.C. 557
                                      (2010), rev’d and remanded, 669 F.3d 1309 (11th Cir. 2012).
                                      According to the Code, a minister of the Gospel doesn’t
                                      include in income the ‘‘rental value of a home furnished to
                                      him as part of his compensation.’’ Sec. 107(1). Driscoll’s con-
                                      gregation provided him with two houses. Driscoll excluded
                                      payments associated with both from his income, but the
                                      Commissioner allowed the exclusion only for his principal
                                      residence. See Driscoll, 135 T.C. at 558–559. We disagreed:
                                      We read section 107 as applying to compensation in the form
                                      of a dwelling house; and since the parties had stipulated that
                                      the Driscolls’ second house was also Driscoll’s ‘‘residence’’, we
                                      found that it too was covered by the plain meaning of the
                                      statute. See id. at 566.
                                        In my view, Driscoll supports Dobra: A home is where one
                                      resides. And because a taxpayer may reside in more than one
                                      house, section 131 does not limit him to only one ‘‘home’’. But
                                      Driscoll was also controversial: It carried only by a seven-to-
                                      six vote. See id. at 567, 573. It was reversed by the Court of
                                      Appeals for the Eleventh Circuit, which is not where this
                                      case would be headed.

                                                                                          II.
                                         Therein is the explanation for why this case, like McLaine
                                      v. Commissioner, 138 T.C. 228 (2012), also filed today, ended
                                      up in conference: a reluctance to include in the opinion sup-
                                      porting our decision a fuller explanation of why we’re doing
                                      what we do.
                                         The audience for our opinions should note a decided lack
                                      of majority support, especially after Driscoll, in actually
                                      defending the Commissioner’s position that a taxpayer who
                                      provides foster care in his home may exclude payments only
                                      if (or maybe to the extent that) he provides that care in his
                                      principal home. Not only did we implicitly reject that point
                                      in Dobra, but as mentioned above, Dobra itself built on cases
                                      like Smith v. Commissioner, 332 F.2d at 673, holding that




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                                      ‘‘[a] person can have but one domicile, but we see no reason
                                      why a person cannot have two homes.’’
                                         Once we decided Driscoll, which would seem to have been
                                      a harder case—the Code section there does use the singular
                                      ‘‘a home’’—it seems odd not to mention it in Stromme. And
                                      if a minister can own more than one ‘‘a home,’’ surely a
                                      foster-care provider can provide care in more than one ‘‘tax-
                                      payer’s home.’’ Unless, of course, we want to go back on
                                      Dobra’s holding that ‘‘home’’ means ‘‘residence’’ and challenge
                                      the Ninth Circuit’s similar construction of section 2(b) by
                                      adopting a different rule of construction to require us to
                                      insert ‘‘principal’’ or ‘‘at most one’’ before ‘‘home’’ where the
                                      Code uses that word, or maybe to interpret ‘‘home’’ to mean
                                      ‘‘domicile’’.
                                         In one way, of course, Driscoll is directly on point: The
                                      opinion of the Court there held that the rule of construction
                                      in current section 7701(p)(1) (cross-referencing title 1 of the
                                      U.S. Code) applies, and tells us to treat singular nouns as
                                      including plural. See Driscoll, 135 T.C. at 565 (citing prior
                                      version at section 7701(m)(1)). Judge Gustafson nevertheless
                                      argues, as he did in his Driscoll dissent, that ‘‘home’’ has a
                                      connotation of singularity, that one can only use one house
                                      at a time. See Gustafson op. pp. 227–228.
                                         In Driscoll he had further argued that allowing the parson-
                                      age allowance for more than one home served no legislative
                                      purpose. See Driscoll, 135 T.C. at 569–571. Noting the phrase
                                      ‘‘to the extent used by him to * * * provide a home,’’ in sec-
                                      tion 107(2), he suggested a reading that would require a min-
                                      ister to allocate his rental allowance among his homes with
                                      only a part excluded. See id. at 571.
                                         One can be sure that this part of Judge Gustafson’s dissent
                                      in Driscoll does not apply to section 131. Not only does the
                                      phrase ‘‘to the extent’’ not occur in section 131, but the legis-
                                      lative history runs directly opposite:
                                      The recordkeeping necessitated by present law requires prorating such
                                      expenses as housing and utility costs as well as expenditures for food. The
                                      committee believes that the requirement of such detailed and complex
                                      recordkeeping may deter families from accepting foster children or from
                                      claiming the full exclusion from income to which they are entitled. [H.R.
                                      Rept. No. 99–426, at 863 (1985), 1986–3 C.B. (Vol. 2) 1, 863.]




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                                        The aim of the amendment was to help taxpayers afford
                                      the advantages of a home life to children or the disabled in
                                      need. And it seems obvious that a family can have more than
                                      one home. If not, how would we possibly analyze in any
                                      reasonable way, situations like:
                                        • a down-on-its-luck family that moves with its foster chil-
                                      dren among several homes during the course of the year; or
                                        • a family where one spouse moves with a small child to
                                      the family’s summer home, while the other stays with the
                                      school-age children at their principal residence; or
                                        • a minister’s family that shuttles between the various
                                      homes whose expenses we’ve already decided are all subject
                                      to exclusion in Driscoll?
                                        As it turns out, there is no majority to take this reasoning
                                      on, only a simple reluctance to rule against the Commis-
                                      sioner on one point when he wins on another. A similar
                                      reluctance is at work in McLaine, but it’s not one I think it
                                      wise for us to indulge in as a general matter. Judge Halpern,
                                      in his concurrence in McLaine, lists the advantages of alter-
                                      native holdings where there’s a reason for reaching alter-
                                      native arguments. As trial Judge here, I faced the related
                                      problem of a bad argument in support of the winning side.
                                      The Commissioner raised the argument, and the presence of
                                      the still-outstanding Technical Advice Memorandum 9429004
                                      (July 22, 1994), see supra note 2, suggests that the Commis-
                                      sioner will continue to do so until there’s authority to the
                                      contrary. Proposing to address it was not gratuitous, but a
                                      reasonable progression from Dobra (home means residence,
                                      not ownership) to Driscoll (home includes two houses that
                                      the parties stipulated were residences) to Stromme—where
                                      one party relied on the legal argument that only principal
                                      residences are homes, but presented lots of evidence on the
                                      factual issue that the house in question wasn’t a residence at
                                      all.
                                        The answer to the legal question seemed pretty obvious,
                                      and would clear up this tiny, murky corner of the Code a bit.
                                      See, e.g., Ashcroft v. al-Kidd, 563 U.S. ll, ll, 131 S. Ct.
                                      2074, 2080 (2011) (court has discretion to correct errors at
                                      each step of two-step analysis). We did the same thing in
                                      Dobra itself, where we held for the Commissioner, but also
                                      rejected his definition of ‘‘foster care provider’s home’’ as
                                      meaning ‘‘the family residence of a licensed foster care pro-




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                                      vider in which the licensee is the primary provider of foster
                                      care.’’ Dobra, 111 T.C. at 342–343.
                                        It seems odd to have the Court sit in conference on cases
                                      where there’s no disagreement on the result, and the only
                                      articulated dispute on the underlying legal questions reiter-
                                      ates a dissent from an earlier case decided differently. It is
                                      clearly prudent and justified for any Judge not to reach out
                                      and analyze tangential issues, or even especially controver-
                                      sial issues, but as in Mitchell v. Commissioner, 131 T.C. 215
                                      (2008), discussed in Koprowski v. Commissioner, 138 T.C. 54,
                                      66 (2012) (Holmes, J., concurring), so today in McLaine and
                                      Stromme, we take this counsel of prudence imprudently far:
                                      A home-plate umpire shouldn’t be opining on the theoretical
                                      applicability of the infield-fly rule, but surely he can tell the
                                      catcher that, though the pitch was outside, at least it was
                                      above the knees.



                                         GUSTAFSON, J., concurring: I agree with the opinion of the
                                      Court. I write separately here to address the concurring
                                      opinion of Judge Holmes, who proposes we should hold that
                                      a foster parent may have two ‘‘homes’’ under section 131. I
                                      disagree for two reasons:
                                         First, we manifestly did not need to reach this issue in
                                      order to decide this case. Section 131 excludes from income
                                      payments made ‘‘to the foster care provider for caring for a
                                      qualified foster individual in the foster care provider’s home.’’
                                      A trial was conducted, and the evidence yielded a finding of
                                      fact (with which Judge Holmes fully agrees) that the Emil
                                      Avenue house was not the petitioners’ ‘‘home’’. The opinion
                                      of the Court reaches this conclusion without having to con-
                                      sider whether section 131 contemplates that a foster parent
                                      may have two ‘‘homes’’ or instead permits only one. Judge
                                      Holmes suggests that one should note ‘‘a decided lack of
                                      majority support’’ for a one-‘‘home’’-only interpretation of sec-
                                      tion 131, see Holmes op. pp. 224–225; but in fact one should
                                      note instead simply that the majority found it unnecessary
                                      even to reach this interpretive question, which is not really
                                      implicated here.
                                         Second, if we were required to reach that question, I would
                                      conclude that the statutory phrase ‘‘in the foster care pro-




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                                      vider’s home’’ does not mean ‘‘in one of the foster care pro-
                                      vider’s homes’’. Rather, as I observed before in another con-
                                      text,
                                      In common usage, a person has one ‘‘home’’,2 and the word therefore has
                                      a connotation of singularity.
                                           2 The
                                              leading (non-obsolete) definition of ‘‘home’’ in the Oxford English
                                      Dictionary (1933) is ‘‘A dwelling-place, house, abode; the fixed residence of
                                      a family or household; the seat of domestic life and interests; one’s own
                                      house; the dwelling in which one habitually lives, or which one regards as
                                      one’s proper abode’’; and the first definition for ‘‘home’’ in Webster’s Third
                                      New International Dictionary (1966) is ‘‘the house and grounds with their
                                      appurtenances habitually occupied by a family : one’s principal place of
                                      residence : DOMICILE’’.
                                        [Driscoll v. Commissioner, 135 T.C. 557, 569–570 (2010) (Gustafson, J.,
                                      dissenting), rev’d and remanded, 669 F.3d 1309 (11th Cir. 2012).]

                                      The most that can be said for the multiple-‘‘homes’’ position
                                      is that the statute might be ambiguous—i.e., that the appar-
                                      ently singular ‘‘home’’ might actually mean the plural
                                      ‘‘homes’’. But if the statute is ambiguous, then we must
                                      interpret it in light of the elementary principle ‘‘ ‘that exclu-
                                      sions from income must be narrowly construed.’ ’’ Commis-
                                      sioner v. Schleier, 515 U.S. 323, 328 (1995) (quoting United
                                      States v. Burke, 504 U.S. 229, 248 (1992) (Souter, J., concur-
                                      ring)). The narrower construction here—and the one I would
                                      adopt—is that ‘‘home’’ means one home.
                                         COLVIN, GOEKE, and KROUPA, JJ., agree with this concur-
                                      ring opinion.

                                                                               f




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