                            143 T.C. No. 11



                  UNITED STATES TAX COURT



            DENNIS E. BOHNER, Petitioner v.
    COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 24166-12.                          September 23, 2014.



       While P worked for the Federal Government, he participated in
the Civil Service Retirement System (CSRS). After P retired, he
received a letter explaining that he could elect to increase his CSRS
retirement annuity by remitting a fixed sum. P remitted the funds to
CSRS. Because P did not have sufficient funds in his bank account,
he borrowed a portion of the fixed sum. P paid off the loan and
replenished his bank account by making withdrawals from his
traditional individual retirement account (IRA).

       P did not report any of the amounts he withdrew from his IRA
as taxable income. P contends that he engaged in a tax-free rollover.

    R contends that rollover contributions cannot be made to
CSRS.
                                         -2-

             Held: Because CSRS did not accept his remittance as a
      rollover, P must include his withdrawals in his taxable income for the
      year at issue.



      Kathryn L. Everlove-Stone, for petitioner.

      Joel D. McMahan, for respondent.



      KERRIGAN, Judge: Respondent determined a deficiency of $4,590 with

respect to petitioner’s Federal income tax for tax year 2010.

      Unless otherwise indicated, all section references are to the Internal

Revenue Code in effect for the year in issue, and all Rule references are to the Tax

Court Rules of Practice and Procedure.

      The sole issue for consideration is whether a tax-free rollover occurred

when petitioner withdrew funds from his traditional individual retirement account

(IRA) to cover a deposit of the same amount to the Civil Service Retirement

System (CSRS).

                               FINDINGS OF FACT

      Some facts have been stipulated and are so found. Petitioner resided in

Florida when he filed the petition.
                                         -3-

      Petitioner was an employee of the Social Security Administration in 2009

and retired before April 13, 2010. He was eligible to participate in Federal

Government retirement plans offered through the Office of Personnel Management

(OPM), and he participated in CSRS during his years of Government service.

      After petitioner retired, OPM mailed him a letter on April 13, 2010,

explaining that he could elect to increase his CSRS retirement annuity by remitting

$17,832 with respect to creditable Government service for a period during which

no retirement contributions had been withheld from his salary. The letter required

that petitioner remit the funds within 15 days of the date of the letter. The letter

was silent as to whether the remittance could be made through a tax-free rollover

contribution.

      Petitioner elected to remit to CSRS the $17,832 to increase his retirement

annuity. Because petitioner did not have sufficient funds to make the entire

payment directly from his bank account, he borrowed a portion of the $17,832

from a friend. On April 27, 2010, petitioner mailed a check to OPM for $17,832.

      During 2010 petitioner maintained a traditional IRA with Fidelity

Investments (Fidelity). Petitioner made two separate requests to withdraw funds

from his Fidelity IRA, one in April 2010 and another in May 2010. Petitioner’s

monthly Fidelity investment report for April 2010 shows that he requested a
                                        -4-

$5,000 distribution, of which $4,500 was sent to him on April 15, 2010, and $500

was withheld to satisfy Federal income tax liability in connection with the

distribution. Petitioner’s Fidelity investment report for May 2010 shows that he

requested a $12,832 distribution, which was sent entirely to him on May 3, 2010;

no Federal tax was withheld. Petitioner used the funds he received from Fidelity

to reimburse his friend and to replenish his bank account.

      Fidelity issued petitioner a Form 1099-R, Distributions From Pensions,

Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., in

which it reported $17,832 in distributions and listed the entire $17,832 as taxable

income. On his Form 1040A, U.S. Individual Income Tax Return, for tax year

2010 petitioner reported receipt of the $17,832 in distributions from his Fidelity

IRA on line 11a, IRA Distributions. He did not report any of the $17,832 as

taxable income as a result of those distributions on line 11b, Taxable Amount.

      On July 2, 2012, respondent issued petitioner a notice of deficiency which

determined a deficiency of $4,590 and treated the $17,832 withdrawal from the

IRA as taxable income.
                                       -5-

                                    OPINION

      Generally, the Commissioner’s determinations in a notice of deficiency are

presumed correct, and the taxpayer bears the burden of proving those

determinations are erroneous. Rule 142(a)(1); Welch v. Helvering, 290 U.S. 111,

115 (1933). The parties do not dispute any material facts; therefore, the burden of

proof is not at issue.

I.    CSRS

      CSRS is a statutorily created retirement plan designed to provide retirement

benefits in the form of annuities and lump-sum benefits to Federal civil service

employees. See generally 5 U.S.C. secs. 8331-8351 (2006). The statutory

provisions governing CSRS do not include a provision allowing pretax employee

contributions. Id. An eligible employee contributes portions of his or her salary

to CSRS, and the employing agency withholds the contributions from the

employee’s salary. Id. sec. 8334(a)(1)(A); Malbon v. United States, 43 F.3d 466,

467 (9th Cir. 1994); see also Logsdon v. Commissioner, T.C. Memo. 1997-8, slip

op. at 3-4. Matching contributions are made from funds appropriated for the

employing agency. 5 U.S.C. sec. 8334(a)(1)(B)(i).

      To assure that income will be taxed only once, the Internal Revenue Code

deems an annuity, such as one for a CSRS participant, to have two components:
                                        -6-

one taxable, one not. See sec. 72; Montgomery v. United States, 18 F.3d 500 (7th

Cir. 1994). The employing agency withholds a mandatory contribution from the

employee’s salary, and that withheld amount is after-tax income because it is

taxable for the year in which it is withheld. Malbon, 43 F.3d at 467. On

distribution that portion is nontaxable because it was already subject to tax. See

Montgomery, 18 F.3d at 500. The amount contributed by the employing agency

and any interest earned on the employee’s investment are not taxed to the

employee until distributed. Secs. 72, 402(a). This portion of the distribution is the

taxable component. Montgomery, 18 F.3d at 500.

      Petitioner contends that all distributions from CSRS are taxable and that

unless the distributions from his IRA are excluded from income, he will be subject

to double taxation. Petitioner will not be subject to double taxation, however,

because under section 72 he will be able to exclude from his gross income CSRS

distributions attributable to his previously taxed contributions to the plan. See sec.

72(c)(1)(A). Section 72(c)(1)(A) and (B) defines “investment in the contract” as

of the annuity starting date as “the aggregate amount of premiums or other

consideration paid for the contract, minus * * * the aggregate amount received

under the contract before such date, to the extent that such amount was excludable

from gross income under this subtitle or prior income tax laws.”
                                        -7-

      CSRS provisions include that “[e]ach employee or Member credited with

civilian service after July 31, 1920, for which retirement deductions or deposits

have not been made, may deposit with interest an amount equal to * * * [certain

statutorily defined] percentages of his basic pay received for that service”.

5 U.S.C. sec. 8334(c). This provision allows civil service employees to elect to

make a deposit for creditable Government service and thus increase their CSRS

retirement annuity. See Dela Cruz v. OPM, 553 Fed. Appx. 977 (Fed. Cir. 2014).

II.   Rollover Contributions Under Section 408(d)(3)

      In general, any amount paid or distributed out of an individual retirement

plan is included in the gross income of the payee or distributee as provided in

section 72. Sec. 408(d)(1); Arnold v. Commissioner, 111 T.C. 250, 253 (1998).

This general rule does not apply to a rollover contribution. See sec. 408(d)(3)(A).

A rollover contribution is any amount paid or distributed out of an IRA or

individual retirement annuity to the individual for whose benefit the account or

annuity is maintained if the entire amount received is paid into an eligible

retirement plan no later than 60 days after receipt. Sec. 408(d)(3)(A)(ii); see also

Schoof v. Commissioner, 110 T.C. 1, 7 (1998). An “eligible retirement plan” is

defined as any (1) qualified trust; (2) annuity plan described in section 403(a);
                                           -8-

(3) eligible deferred compensation plan described in section 457(b) which is

maintained by an eligible employer described in section 457(e)(1)(A); or

(4) annuity contract described in section 403(b). Secs. 408(d)(3)(A), 402(c)(8)(B).

A “qualified trust” is any employees’ trust described in section 401(a) which is

exempt from tax under section 501(a). Sec. 402(c)(8)(A). Respondent does not

dispute that CSRS is a qualified trust.1

      Respondent contends, however, that petitioner’s deposit to CSRS does not

constitute a rollover contribution under section 408(d)(3) because CSRS does not,

and is not required to, accept rollovers.2


      1
        The Commissioner has taken the position in published guidance that CSRS
is a qualified trust under sec. 401(a). See Rev. Rul. 74-138, 1974-1 C.B. 29, 30
(“[CSRS] is a qualified trust under section 401(a) of the Code and is exempt from
Federal income tax under section 501(a).”); Rev. Rul. 68-486, 1968-2 C.B. 184;
Rev. Rul. 58-472, 1958-2 C.B. 30; IRS Publ’n 721, Tax Guide to U.S. Civil
Service Retirement Benefits 13 (rev. Feb. 22, 2011) (“CSRS, FERS, and TSP are
considered qualified retirement plans” for the purpose of determining whether a
CSRS distribution can be used in a tax-free rollover to another plan or trust).
CSRS is a plan that meets the requirements of sec. 401(a). Guilzon v.
Commissioner, 97 T.C. 237, 241 (1991), aff’d, 985 F.2d 819 (5th Cir. 1993);
Gomez v. Commissioner, T.C. Memo. 1996-212, slip op. at 5; Roundy v.
Commissioner, T.C. Memo. 1995-298, aff’d, 122 F.3d 835 (9th Cir. 1997);
Shimota v. United States, 21 Cl. Ct. 510, 519 (1990), aff’d, 943 F.2d 1312 (Fed.
Cir. 1991).
      2
       Respondent also contends that petitioner’s deposit to CSRS is not a
rollover because the funds paid to CSRS were not a distribution from an IRA. We
have held that the phrase “if the entire amount is contributed into an eligible
                                                                        (continued...)
                                          -9-

      Even though there is no specific provision in the Internal Revenue Code

concerning whether a qualified trust must accept a rollover that is an indirect

transfer from an IRA in order to constitute an eligible retirement plan for purposes

of section 408(d)(3), this issue is contemplated in similar circumstances. Section

401(a)(31)(E) and the legislative history associated with the rollover provision of

section 402 address this issue in the context of transfers from other qualified

trusts. For the purpose of a direct transfer of eligible rollover distributions, a

qualified trust plan must permit distributees to elect to have a distribution paid

directly to an eligible retirement plan, which for this purpose must be a defined

contribution plan that permits the acceptance of rollover distributions. The Senate

report explaining this provision includes the following statement: “As under

present law, a transfer cannot be made to another qualified plan unless the terms of

the transferee plan permit the acceptance of such transfer.” 138 Cong. Rec. S8180

(1992).


      2
        (...continued)
retirement plan” is not to be read so narrowly as to require the taxpayer to roll over
the exact same money that he or she received in the distribution from the IRA.
Zaklama v. Commissioner, T.C. Memo. 2012-346, at *68. Respondent did not
raise the issue of the second IRA distribution’s taking place after petitioner’s
deposit to CSRS, and we deem respondent to have waived that issue. In any
event, our disposition of this case does not require addressing the timing of the
second distribution.
                                         - 10 -

      The instant case does not involve a defined contribution plan; rather, it

involves a defined benefit plan. However, for the reasons explained below, we

conclude and hold that because CSRS did not accept petitioner’s remittance as a

rollover, he must include his withdrawals in his taxable income for 2010.

      The letter that OPM sent to petitioner after he retired explained how he

could make a deposit to make up for years for which no retirement contributions

were withheld from his pay. The letter requested that a check be sent to OPM for

these contributions; it is silent on whether the deposit can be made as a rollover.

Title 5 U.S.C. sec. 8334(c) does not specifically permit civil service employees to

remit the deposit by means of a tax-free rollover contribution from an IRA or

another eligible retirement plan. The regulations promulgated under 5 U.S.C. sec.

8334(a)(2) likewise do not require CSRS to accept tax-free rollovers as a form of

deposit. 5 C.F.R. sec. 831.303 (2001).

      Amounts deposited under 5 U.S.C. sec. 8334(c) allow civil service

employees to make up for years in which there were no contributions from their

salaries. See 5 C.F.R. sec. 831.303. Deposited amounts take the place of after-tax

contributions that were not originally made. See 5 U.S.C. sec. 8334(a), (c). Only

the portion of a distribution from an IRA that is otherwise includible in gross

income may be rolled over from the IRA to an eligible retirement plan other than
                                        - 11 -

an IRA. Sec. 408(d)(3)(A)(ii); see Janine H. Bosley & Martha L. Hutzelman,

Qualified Plans--Taxation of Distributions, 370-3d Tax Mgmt. (BNA), at A-158.

After-tax contributions that were made to an IRA cannot be rolled over. See sec.

408(d)(3)(A)(ii); see also Bosley & Hutzelman, supra, at A-158. A rollover

contribution does not result in taxation until distribution. See secs. 72,

408(d)(3)(A).

      The instant case involves an indirect transfer. Because it was not a direct

transfer, CSRS was likely not aware that petitioner was attempting to make a tax-

free rollover contribution, and there is nothing in the record to suggest that

petitioner informed CSRS of his attempt to make a rollover. Unless it explicitly

accepted rollovers, a qualified plan such as CSRS would not be aware of the

proper tax treatment of the payment upon distribution.

      Even if CSRS accepted rollovers, section 408(d)(3)(A)(ii) would permit it to

accept as a rollover only the portion of the IRA distribution includible in gross

income. Petitioner attempted to effect a rollover in order to make the payment to

CSRS with pretax dollars. Petitioner did not distinguish for CSRS the extent to

which the payment was made with pre- or post-tax dollars. Petitioner’s deposit

was to make up for wage contributions which were not withheld in prior years;

those contributions would have been taxable. CSRS does not provide for the
                                      - 12 -

acceptance of rollovers. Because the payment was not accepted as a pretax

contribution, it is taxable. See Montgomery, 18 F.3d at 500. Therefore, section

408(d)(3) does not apply and the $17,832 petitioner withdrew from his Fidelity

IRA must be included in gross income under section 408(d)(1).

      Any contention we have not addressed is irrelevant, moot, or meritless.

      To reflect the foregoing,


                                               Decision will be entered for

                                     respondent.

      Reviewed by the Court.

       THORNTON, COLVIN, GALE, GOEKE, PARIS, LAUBER, and NEGA,
JJ., agree with this opinion of the Court.
                                       - 13 -

      VASQUEZ, J., concurring: I concur with the opinion of the Court’s holding

that petitioner’s payment to the Civil Service Retirement System (CSRS) was not a

rollover. I write separately to emphasize that this case can be resolved solely on

the basis of the Office of Personnel Management’s (OPM) authority to choose

whether to accept rollovers. I also take this opportunity to address Judge Buch’s

dissent.

      I agree with the facts as laid out by the opinion of the Court. OPM gave

petitioner an opportunity to make a payment to CSRS in order to increase his

annuity, as provided by 5 C.F.R. sec. 831.303(b) (2001). See op. Ct. p. 3. Within

a two-month period, petitioner borrowed money from a friend, made a withdrawal

from his Fidelity Investments individual retirement account (IRA), made the

payment, made a second withdrawal from the same IRA, and repaid his friend.

See id. pp. 3-4. The only question before us is whether one or both of the

withdrawals from the IRA were rollover contributions to CSRS under section

408(d)(3).

      As the opinion of the Court recognizes, CSRS is a qualified trust. See id.

p. 8 and note 1. OPM administers CSRS. 5 U.S.C. sec. 8347(a) (2006); see also

5 C.F.R. sec. 838.101(a)(1) (2001) (“[T]he Civil Service Retirement System * * *

[is] administered by the Office of Personnel Management”.). OPM’s policy is to
                                       - 14 -

not accept rollovers to CSRS. See op. Ct. pp. 11-12. Petitioner has failed to

provide any authority requiring OPM to accept rollovers, and OPM did not treat

petitioner’s payment as a rollover. These are the only facts necessary to decide the

issue before us.

      “A trustee * * * has broad powers that are only ‘limited by statute or the

terms of the trust’”. Dabney v. Commissioner, T.C. Memo. 2014-108, at *10

(quoting 3 Restatement, Trusts 3d, sec. 85 (2007)). In Dabney, the taxpayer

attempted to invest in real property through an IRA he held with Charles Schwab

& Co., Inc. (Charles Schwab). Id. at *3. The Internal Revenue Code does not

prohibit IRAs from holding real estate. Id. at *10. However, Charles Schwab did

not permit IRAs to purchase or hold real property. Id. at *3. We held that,

because it was the trustee or custodian of the IRA, Charles Schwab’s policies

controlled and the taxpayer would not have been able to use his Charles Schwab

IRA to hold the real property regardless of how he had structured the transaction.

Id. at *11-*12.

      The same analysis holds true here. As the administrator of CSRS, OPM

may choose whether to accept rollover contributions to CSRS. No statute or

regulation restricts OPM’s authority to do so. OPM chose not to accept rollovers.

Therefore, petitioner’s payment to CSRS was not a rollover contribution.
                                       - 15 -

      In his dissent, Judge Buch raises the issue of the plain language of section

408(d)(3). The Supreme Court has stated:

      There is, of course, no more persuasive evidence of the purpose of a
      statute than the words by which the legislature undertook to give
      expression to its wishes. Often these words are sufficient in and of
      themselves to determine the purpose of the legislation. * * *
      Frequently, however, even when the plain meaning did not produce
      absurd results but merely an unreasonable one ‘plainly at variance
      with the policy of the legislation as a whole’ this Court has followed
      that purpose, rather than the literal words. * * *

United States v. Am. Trucking Ass’ns, Inc., 310 U.S. 534, 543, 544 (1940) (fn.

refs. omitted.) (quoting Ozawa v. United States, 260 U.S. 178, 194 (1922)).

      Under Judge Buch’s reading of the statute, neither CSRS nor any other

qualified plan or trust has the discretion to choose whether to accept rollover

contributions. I do not believe that such an approach is reasonable or in keeping

with Congress’ intent. See H.R. Rept. No. 107-51 (Part 1), at 81 (2001)

(“Qualified plans are not required to accept rollovers.”). The term “qualified plan”

refers to “a plan which satisfies the requirements of section 401(a).” Sec. 1.401-

0(b)(1), Income Tax Regs. As the opinion of the Court states: “CSRS is a plan

that meets the requirements of sec. 401(a)”. See op. Ct. p. 8 note 1. Qualified
                                       - 16 -

plans have the discretion to decide whether to accept rollover contributions, and

OPM exercised that discretion. No further analysis is required.

      LAUBER, J., agrees with this concurring opinion.
                                        - 17 -

      HALPERN, J., dissenting: I join Judge Buch's dissent and write separately

to explain why the second distribution fails. It fails under the statutory definition

of a rollover. Mr. Bohner made his payment into CSRS on April 27, 2010, before

he received the second distribution on May 3, 2010. Section 408(d)(3)(A)

requires that the amount received as a distribution be paid into the eligible

retirement plan no later than 60 days after distribution. A distribution cannot be

rolled over before it is received. Judge Buch may not have included that reason

because some joining his side opinion may have objected that that ground was not

raised by respondent. That is not necessarily a valid objection.

      A deficiency determination may be sustained upon any legal ground that

supports it, even though the grounds relied upon by the Commissioner may have

been different or unsound. Blansett v. United States, 283 F.2d 474, 478 (8th Cir.

1960); Metrocorp, Inc. v. Commissioner, 116 T.C. 211, 232 (2001); Smith v.

Commissioner, 56 T.C. 263, 291 n.17 (1971); Wilkes-Barre Carriage Co. v.

Commissioner, 39 T.C. 839, 845-846 (1963), aff'd, 332 F.2d 421 (2d Cir. 1964);

Williams v. Commissioner, T.C. Memo. 1997-326. As we said in Barnette v.

Commissioner, T.C. Memo. 1992-595, aff'd without published opinion sub nom.

Allied Mgmt. Corp. v. Commissioner, 41 F.3d 667 (11th Cir. 1994):
                                         - 18 -

      It is the Court's right and obligation to decide the case upon what it
      considers to be the correct application of the law, based upon the
      record presented, whether the parties have properly pleaded the
      controlling issues or not. * * * [I]f the Court feels that a full and fair
      opportunity to present the facts has been given, and the Court feels
      that no further briefing on the law is necessary, the Court can go
      forward and decide the case on the record presented.

      We have sufficient facts to permit us to determine that the second

distribution fails under the statutory definition of a rollover because it could not be

rolled over before it was received, and I believe that we are obligated to so

conclude.

      HOLMES and BUCH, JJ., agree with this dissent.
                                        - 19 -

      BUCH, J., dissenting: The opinion of the Court turns on the question of

whether CSRS accepts rollovers, yet in that opinion a majority of the Court

candidly states that “there is no specific provision in the Internal Revenue Code

concerning whether a qualified trust must accept a rollover that is an indirect

transfer from an IRA in order to constitute an eligible retirement plan for purposes

of section 408(d)(3)”. See op. Ct. p. 9. They then go on to create such a rule.

      This may or may not be a good or wise rule, but that should be irrelevant. It

is not our role to act as rulemaker. Indeed, on the same day the Court Conference

considered this opinion, the Court of Appeals for the D.C. Circuit made this very

point: “The Tax Court is in the business of interpreting and applying the internal

revenue laws, see Freytag, 501 U.S. at 891, not in the business of making those

laws.” Kuretski v. Commissioner, 755 F.3d 929, 943 (D.C. Cir. 2014), aff’g T.C.

Memo. 2012-262. After noting what the statute says (and does not say), we are to

apply what is written. The Court of Appeals for the Eleventh Circuit (where an

appeal of this case could be taken) reminded us of that earlier this year: “The

‘preeminent canon of statutory interpretation’ requires the court to ‘presume that

the legislature says in a statute what it means and means in a statute what it says

there.’” Packard v. Commissioner, 746 F.3d 1219, 1222 (11th Cir. 2014) (quoting
                                         - 20 -

Bed Rock, Ltd., LLC v. United States, 541 U.S. 176, 183 (2004), rev’g 139 T.C.

390 (2012).

      Indeed, over the years circuit after circuit has had occasion to remind us of

this point. See Textron, Inc. v. Commissioner, 336 F.3d 26, 32 (1st Cir. 2003)

(“Statutory language ‘is the most persuasive evidence of the statutory purpose’ and

should not have been avoided by the Tax Court in this case.” (quoting Woodral v.

Commissioner, 112 T.C. 19, 22 (1999))), rev’g 115 T.C. 104 (2000); Estate of

Swan v. Commissioner, 247 F.2d 144 (2d Cir. 1957) (reversing the Tax Court for

failing to apply the plain meaning of the statute), aff’g in part, rev’g in part 24

T.C. 829 (1955); Zackim v. Commissioner, 887 F.2d 455 (3d Cir. 1989) (reversing

the Tax Court for looking beyond the statute to a Senate report when the language

of the statute is clear), rev’g 91 T.C. 1001 (1988); Hillman v. IRS, 263 F.3d 338,

342-343 (4th Cir. 2001) (holding that the plain meaning rule applies unless the

literal application of the statute “produces an outcome that is demonstrably at odds

with clearly expressed congressional intent to the contrary” or when literal

application of the statute “produces an absurd result”), rev’g 114 T.C. 103 (2000);

Estate of Monroe v. Commissioner, 124 F.3d 699 (5th Cir. 1997) (holding that the

Tax Court incorrectly applied the law when it interpreted a statute in a way that

conflicts with the statutory language), rev’g 104 T.C. 352 (1995); Limited, Inc. v.
                                        - 21 -

Commissioner, 286 F.3d 324, 336 (6th Cir. 2002) (“[I]t is not the Tax Court's role

to inject its own policy determinations into the plain language of statutes.”), rev’g

113 T.C. 169 (1999); De Soto Sec. Co. v. Commissioner, 235 F.2d 409, 411 (7th

Cir. 1956) (“The courts can only interpret congressional acts. They cannot

legislate.”), rev’g 25 T.C. 175 (1955); Estate of Farnam v. Commissioner, 583

F.3d 581 (8th Cir. 2009) (holding that when the language of the statute is plain

and unambiguous, there is no need to look to policy considerations), aff’g 130

T.C. 34 (2008); Easson v. Commissioner, 294 F.2d 653, 657 (9th Cir. 1961)

(reversing the Tax Court for “failing to adhere to the unambiguous language

contained in the statutes in question”), rev’g 33 T.C. 963 (1960); Hawkins v.

Commissioner, 86 F.3d 982, 989 (10th Cir. 1996) (holding that the Tax Court’s

interpretation of the statute was “unduly narrow” and ran counter to the plain

meaning of the statute), rev’g 102 T.C. 61 (1994); Matthews v. Commissioner,

907 F.2d 1173, 1179 (D.C. Cir. 1990) (holding that the language of the statute is

“too plain to be mistaken”), aff’g 92 T.C. 351 (1989).

      And the Supreme Court has reminded us. Badaracco v. Commissioner, 464

U.S. 386, 398 (1984) (affirming the Court of Appeals for the Third Circuit’s

reversal of the Tax Court and stating that “[c]ourts are not authorized to rewrite a
                                        - 22 -

statute because they might deem its effects susceptible of improvement”), aff’g

693 F.2d 298 (3d Cir. 1982).

      We have acknowledged this point, as well. See Belk v. Commissioner, 140

T.C. 1, 10 (2013) (“When the plain language of the statute is clear and

unambiguous, that is where the inquiry should end.”). We often make this point in

apologetic tones when denying a taxpayer a tax benefit not clearly contemplated

by the Internal Revenue Code. See, e.g., Eichelburg v. Commissioner, T.C.

Memo. 2013-269 at *7-*8 (“We acknowledge that the result we reach may seem

harsh. * * * However, this Court may not rely on general equitable principles to

expand the statutorily prescribed time for filing a petition.” (Citations omitted.));

Cutler v. Commissioner, T.C. Memo. 2013-119, at *34 (“While we sympathize

with her children, we must apply the law as written; it is up to Congress to address

questions of fairness and to make improvements to the law.”); Moody v.

Commissioner, T.C. Memo. 2012-268, at *8 (“We are sympathetic to petitioner’s

plight; however, we are bound by the statute as written and the accompanying

regulations when consistent therewith.”); Ball v. Commissioner, T.C. Memo.

1995-520, slip op. at 13 (“While the result to petitioner may seem harsh, we

cannot ignore the plain language of the statute and, in effect, rewrite the statute to

achieve what might be an equitable result.”).
                                       - 23 -

      So with that, I would look to the law as written and apply it to the material

facts, which are fairly straightforward. Mr. Bohner worked for the Social Security

Administration and participated in the CSRS during his years of service. After

Mr. Bohner retired, he received a letter from OPM explaining that he could

increase his CSRS retirement annuity by remitting $17,832 to make up for years

when he did not have retirement contributions withheld. The letter required the

amount to be paid within 15 days. The letter was silent as to whether that payment

could be made through an indirect rollover.1

      During 2010 Mr. Bohner maintained an IRA with Fidelity Investments. Mr.

Bohner made two requests for distributions from his IRA. Here, the chronology

becomes important. Fidelity made a first distribution of $5,000 on April 15, 2010,

withholding $500 of Federal income tax. Mr. Bohner then borrowed money from

a friend and mailed a check for the full $17,832 to OPM for payment into CSRS

on April 27, 2010. Fidelity then made a second distribution of $12,832 on May 3,

2010. Mr. Bohner used these funds to reimburse his friend and replenish his bank

account.




      1
       Such a statement would not affect the outcome the opinion of the Court
reaches, and whether any such statement would affect the outcome under the
analysis in this dissent is not an issue before us.
                                         - 24 -

      The question for us to decide under the arguments properly preserved by the

parties is whether Mr. Bohner made valid rollovers.2

      The relevant statute is section 408(d). To begin, an IRA distribution is

taxable as provided under section 72. Sec. 408(d)(1). However, that distribution

is not taxable if it is a rollover. Sec. 408(d)(3)(A). That section sets forth the

requirements of a rollover as follows:

      Paragraph (1) [providing that distributions are taxable] does not apply
      to any amount paid or distributed out of an individual retirement
      account or individual retirement annuity to the individual for whose
      benefit the account or annuity is maintained if--

                  *        *        *      *        *        *        *

            (ii) the entire amount received (including money and any other
      property) is paid into an eligible retirement plan for the benefit of
      such individual not later than the 60th day after the date on which the
      payment or distribution is received, except that the maximum amount
      which may be paid into such plan may not exceed the portion of the
      amount received which is includible in gross income (determined
      without regard to this paragraph).

      CSRS is an “eligible retirement plan”. Through a series of cross-references,

a qualified trust is an eligible retirement plan. See secs. 408(d)(3) (flush

language), 402(c)(8)(B). In Rev. Rul. 58-472, 1958-2 C.B. 30, the IRS held that

CSRS, which was first created by the Civil Service Retirement Act of 1920, Pub.


      2
          See op. Ct. p. 8 and note 2.
                                        - 25 -

L. No. 66-215, 41 Stat. 614, is a qualified trust under section 401(a). Although

revenue rulings are not binding on the Court, they may serve to bind the

Commissioner where a longstanding revenue ruling that has not been modified or

revoked is relevant to the case before us. Rauenhorst v. Commissioner, 119 T.C.

157, 173 (2002). The IRS has not revoked this revenue ruling, and respondent did

not challenge CSRS’ status as a qualified trust here. Accordingly, CSRS is a

qualified trust and therefore an eligible retirement plan.

      So we must see whether either of the two distributions qualifies as a

rollover. The opinion of the Court denies rollover treatment for both distributions

in one fell swoop.

      Like the facts, the law is fairly straightforward. The requirements for a

distribution to be treated as a rollover are found in section 408(d)(3)(A)(ii). A

distribution from an IRA will not be included in gross income if the entire amount

received from the IRA is paid into an eligible retirement plan no later than 60 days

after the date the payment is received. Mr. Bohner received the first distribution

on April 15, 2010. Twelve days later, Mr. Bohner wrote a check exceeding the

amount of the distribution to OPM for payment into CSRS. Accordingly, he

fulfilled all of the requirements for a rollover contribution under section
                                        - 26 -

408(d)(3)(A)(ii), and the first distribution should not be included in his gross

income.

      The opinion of the Court makes it abundantly clear that there is no rule that

overrides the rollover treatment allowed under section 408. The opinion cites

section 401(a)(31), which relates to the qualification of a plan, not the tax

treatment of a rollover.3 The opinion cites section 402, which relates to rollovers

from exempt trusts, not rollovers from IRAs. In fact, the opinion does not cite any

specific provision in section 402 but rather cites the legislative history of 1992

amendments to section 402.

      In looking to analogous provisions to assist in interpreting section 408, the

opinion of the Court has done the exact opposite of what canons of statutory

construction instruct. Canons of statutory construction encourage courts to look to

analogous provisions when resolving ambiguity in the provision under

consideration. Atl. Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 433

(1932) (“Undoubtedly, there is a natural presumption that identical words used in

different parts of the same act are intended to have the same meaning.”). Where

      3
         Both the opinion of the Court and respondent cite a regulation for the
proposition that eligible retirement plans are not required to accept rollovers. Sec.
1.401(a)(31)-1, Q&A-13, Income Tax Regs. The regulation is irrelevant because
it not only addresses the qualification requirements for a plan (an issue not before
us); it also relates to accepting direct rollovers, which are not at issue here.
                                        - 27 -

one provision contains a specific rule and another is silent, canons of statutory

construction tell us that the omission is intentional. Rand v. Commissioner, 141

T.C. 376, 390-391 (2013). And we should interpret the provision consistent with

the omission; we do not add a rule to the statute that Congress did not itself

include.

      The strongest statutory authority the opinion of the Court can muster is the

statement “The statutory provisions governing CSRS do not include a provision

allowing pretax employee contributions.” See op. Ct. p. 5. But the statutory

framework of CSRS also does not include a provision prohibiting pretax employee

contributions. A review of that statutory framework reveals that it is silent on the

subject of its Federal income tax treatment. 5 U.S.C. secs. 8331-8351 (2006). The

only tax-related provisions within CSRS’s governing statutes relate to State taxes

and withholding. 5 U.S.C. sec. 8345(k).

      The provisions governing the tax treatment of CSRS distributions and

rollovers into the CSRS are (unsurprisingly) found in title 26, the Internal

Revenue Code. Section 408(d)(3) governs rollovers from an IRA. That provision

tells us that a rollover distribution is to be treated as income on the contract when

contributed to the new plan. Sec. 408(d)(3)(H)(ii)(II). If treated properly, that

amount would be taxable when paid out by CSRS. Sec. 72(b) (because it is not
                                         - 28 -

treated as an investment in the contract, it is not part of the amount that is

excluded from income).

      The opinion of the Court seems intent on solving a problem that does not

exist. The statutory scheme places no weight on whether CSRS has a practice of

accepting rollover contributions. Indeed, the statute places no weight on a plan’s

preferences regarding accepting rollovers when determining the taxability of a

rollover distribution. The Internal Revenue Code, however, would tax that

rollover when it comes out of CSRS. If CSRS does not properly account for that

(a fact that is not in the record), then that is a problem for those who administer

CSRS to resolve, not the Court.

      The concurring opinion cites Dabney v. Commissioner, T.C. Memo.

2014-108, for the proposition that the trustee or custodian of a plan can restrict the

types of investments the plan will allow, even when the statute would otherwise

permit the investment. See concurring op. p. 14. Dabney is inapposite because

the question presented to the Court was whether the distribution at issue was either

an investment by Mr. Dabney’s IRA or a transfer between IRA trustees. Mr.

Dabney did not intend or attempt to make a rollover contribution under section

408(d)(3) from one retirement account to another; rather, Mr. Dabney attempted to

change the investments within his IRA in violation of the trustee’s internal
                                          - 29 -

policies. Mr. Dabney claimed that he acquired an investment in real property as

agent for the IRA trustee; however, he could not act as agent for the trustee where

then trustee had a policy against investing in real property. Our approval of the

IRA trustee’s right to restrict the investment of IRA funds is not authority for the

proposition that an otherwise qualified recipient of an IRA rollover contribution

may, through its internal policies, cause the contribution not to qualify as such.

Thus the analysis in Dabney has no bearing on the case before us.

      On the basis of the foregoing, the first distribution fulfills the necessary

requirements for a rollover contribution. As for the second of the two Fidelity

distributions, that distribution may fail to qualify as a rollover for reasons not

addressed here.

      Because Mr. Bohner complied with all the necessary steps to make a

rollover contribution as to the first distribution, I dissent.

      HALPERN, FOLEY, HOLMES, GUSTAFSON, and MORRISON, JJ.,
agree with this dissent.
