Before TAMM and WALD, Circuit Judges and MARKEY,* Chief Judge, United States Court of Customs and Patent Appeals.
UNITED STATES COURT OF APPEALS, DISTRICT OF COLUMBIA CIRCUIT
Appeal from the Tax Court of the United States (T.C. No. 934-75).
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE WALD
Appellant Iona Sutton Lane-Burslem challenges a decision of the Tax Court *fn1 upholding a deficiency *fn2 noted by the Commissioner of the Internal Revenue Service ("Commissioner") against her 1971 federal income tax return. Appellant contends that the assessment of the deficiency violates her fourteenth amendment right to equal protection of the laws since it results from the disallowance of an exclusion from income she claims would have been available to a similarly situated male. Finding that no person, male or female, in the position of appellant was entitled to the disputed exclusion from income, we affirm the decision of the Tax Court without reaching the constitutional issue. *fn3 I. BACKGROUND
Until 1976, when Congress changed the statute, *fn4 the Internal Revenue Service ("IRS" or "Service") allowed some Americans working and residing abroad but domiciled in community property states to insulate one-half of their earnings from federal income taxation by attributing it to their nonresident alien spouses. *fn5 Despite an IRS and Tax Court finding that she had no legal basis for claiming that her salary should be considered community income, appellant asks the court to give her the benefit of this tax provision.
Appellant, born and bred in the Natchitoches Parish in Louisiana, has been employed overseas since 1951 by the United States Government as a teacher for dependents of United States military personnel. *fn6 In 1964, she married a British citizen, Eric Lane-Burslem. Since that time, the couple has resided together in England, *fn7 though both profess an intention to move to Louisiana following appellant's retirement in 1981 or 1982. *fn8
In 1972, when she learned that a tax advantage was available to residents of community property states married to nonresident aliens, appellant filed an amended tax return *fn9 for the 1971 tax year*fn10 in which she denominated her income as community income, attributed one-half of it to her nonresident alien husband, calculated the tax due on the remainder, and demanded a tax refund. The Commissioner responded with a statutory Notice of Deficiency assessing federal income tax on the excluded income. Attached to the Notice was an Explanation of Adjustments, which read in pertinent part:
It is determined that your domicile is the domicile of your husband therefore, since your (sic) are not domiciled in a community property state, you are not entitled to the income-splitting provision of Louisiana community property law.*fn11
Appellant challenged the deficiency in the Tax Court, arguing that under Louisiana law, her earnings should be considered community property, or, alternatively, if her earnings were not considered community property because Louisiana law deemed her domicile to be that of her husband, Louisiana law invidiously discriminated against women because it made it harder for a married woman to qualify her earnings as community property than it did for a man.*fn12 The Tax Court affirmed the Service's interpretation of Louisiana law, holding that community property existed only if both spouses lived in Louisiana. The opinion failed, however, squarely to confront the equal protection implications of the hypothetical posed by appellant: that a nonresident woman's domicile could be deemed to be that of her Louisiana husband, thus entitling him to the exclusion from income denied appellant, while a Louisiana wife could not make a similar claim of exclusion for her nonresident spouse. Instead the Tax Court found appellant's marital domicile to be England even if a gender-neutral "facts and circumstances" test were applied.
In a supplemental opinion, the Tax Court expanded its analysis. The court reasoned that appellant had no standing to raise the constitutional issue because the alleged constitutional violation arose not from the community property laws, but from the section of the Civil Code of Louisiana, Article 39, which presumes a woman's domicile to be that of her husband.*fn13 Since without this presumption, no person in appellant's situation regardless of sex could claim community property status attached to income earned abroad, a ruling that the presumption was unconstitutional would not benefit appellant. Rather, it would result in the denial of the benefit to all Louisiana domiciliaries, like appellant, married to nonresident aliens.*fn14 Thus, the court concluded, resolution of the constitutional challenge was unnecessary to settle the dispute in the instant case. II. THE ISSUE
On appeal, appellant presses only her constitutional argument, that because a similarly situated male would be allowed to exclude one-half of his income from federal income taxation as community property owned by a nonresident alien spouse, she is entitled to the same benefit.*fn15 However, as a preliminary matter we must confront the question raised by the Service: whether Louisiana law*fn16 provides community property treatment of any income earned outside the state by any person, man or woman, in appellant's situation. III. ANALYSIS
Appellant premises her argument that the sex-based domiciliary presumption in Article 39 is determinative of the existence of a community interest in her salary on her interpretation of the requisites of a community property regime under Louisiana law: "(t)o obtain the benefits of community property, a taxpayer must establish (only) that he or she is domiciled in a community property state."*fn17 In fact, Louisiana has a more complicated system for determining whether and to what extent a "community of acquets or gains" exists between partners in marriage.*fn18 The foundation of this system is contained in three articles of the Civil Code. Article 2399 establishes a community for "(e)very marriage contracted in this State...."*fn19 Article 2400 provides that "(a)ll property acquired in this State by nonresident married persons ... shall be subject to the same provisions of law which regulate the community of acquets and gains between citizens of this State."*fn20 Finally, Article 2401 declares:
(a) marriage, contracted out of this State, between persons who afterwards come here to live, is also subjected to community of acquets, with respect to such ...