COMMISSIONER v. BILDER

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Argument of Stephen J. Pollak

Chief Justice Earl Warren: Number 384, Commissioner of Internal Revenue, versus Sally L. Bilder, etcetera.

Mr. Pollak.

Mr. Stephen J. Pollak: Mr. Chief Justice and may it please the Court.

This is an income tax case on writ of certiorari to the Third Circuit whose decision is in direct conflict with the decision of the Second Circuit in the Carasso case, now pending on certiorari.

The issue is whether a taxpayer who travels to Florida for the winter months for a heart condition on the advice of his physician may deduct the rent he pays for an apartment, while there, as a medical expense under Section 213 of the 1954 Code or whether the coast of his lodgings is a personal living expense nondeductible under Section 262.

The issue turns on a determination whether Congress, in passing Section 213, narrowed the scope of deductible medical expenses for it is undisputed that lodgings on travel essential to medical care were deductible under the 1939 Code.

We will show that Sections 262 and 213 leave lodgings as a nondeductible personal living expense, that they narrowed the scope of the previous provisions in the 1939 Code, that the regulations of the Internal Revenue Commissioner had been consistent in the interpretation of the statute to provide for nondeductibility and that the legislative history reads precisely on the issue presented here and calls for nondeductibility.

The facts are simple and not in dispute.

The petitioner was 43 years of age in 1953 and engaged in the practice of law in Newark, New Jersey.

He had had four heart attacks since 1945 and was medically classified as a hyperkinetic individual.

His physician, an eminent heart specialist, advised that he spend the deep winter months in a warm climate and, on this advice, he took his wife and child to Fort Lauderdale, Florida for the winters of 1954 and 1955, returning each spring to rej -- resume the practice of law.

He went to Fort Lauderdale as there was a physician there qualified to administer a particular anticoagulant drug that he required.

He also went to -- rented an apartment in Fort Lauderdale near a hospital, one of several hospitals there that were qualified to supervise his taking of this drug.

In his tax returns for 1954 and 1955, he took the rent he paid for the apartment -- the rent he paid for the apartment in which he and his family lived during the periods as a deduction from ordinary income.

There is no dispute that he was in Florida as a matter of medical necessity.

There's no suggestion that he was there on vacation.

Thus, the question presented is one of law, whether Congress in the Internal Revenue Code of 1954 afforded a deduction for the rental expense on travel for medical purpose.

The pertinent --

Justice Potter Stewart: -- don't question out the deductibility of the travel expenses, of the transportation expenses.

Mr. Stephen J. Pollak: There is no question of the deductibility of the transportation expense --

Justice Potter Stewart: Right.

Mr. Stephen J. Pollak: No.

The -- this --

Justice Potter Stewart: And there's also -- well, I've interrupted you, there's no question here as to the apportionment of the rent.

That's not in this case that's now presented.

Mr. Stephen J. Pollak: There is also no question of the apportionment of rent.

It's a pure question --

Justice Potter Stewart: Surely, the --

Mr. Stephen J. Pollak: -- whether the rent is deductible.

The pertinent statutes in the 1954 Code are Sections 262 and 213.

Section 262 sets the framework providing that personal living expenses are not deductible unless expressly provided in the Code.

Section 213, in turn, is the expressed provision for deduction, stating that expenses for medical care shall be allowed as a deduction.

It defines medical care in subsections (a) and (b) as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease or (b) for transportation primarily for and essential to medical care.

We believe that these sections on their face suggest a disposition of the issue.

Lodgings are admittedly a personal living expense.

There is no expressed provision allowing for their deduction in Section 213.

In fact, the expressed allowance of transportation expenses suggests that the similar expenses on travel, of lodgings and meals, or similar personal living expenses, are not deductible.

The regulations of the Commissioner, since 1954, read directly on the point and provide that the cost of meals and lodgings while away from home receiving medical treatment are not allowed as a deduction.

The taxpayer relies on the 1939 Code provision attempting to read and express allowance for deduction of rent into the 1954 Code.

He argues that lodgings were deductible under the 1939 Code definition of medical care, that the -- there was no change in this definition of medical care in the 1954 Code and that Congress, by its adoption of the provisions without change, intended to continue the prior interpretation or at least to prove them.

The taxpayer is right in his first contention that rent payments were deductible under the 1939 Code.

There's no dispute on that.

He is only partially right in suggesting that Congress adopted the provision, the definition of medical care in the 1939 Code.

It adopted the provisions but added significantly to that and its addition, we believe, is conclusive here for it provided explicitly in the 1954 Code a provision which was not in the earlier Code that transportation expenses are not deductible.

The -- this provision, we believe, is conclusive for -- in changing the provision of the law, Congress, we believe, made an allowance for transportation explicit and, thereby, excluded the meals and lodgings which had previously been allowed.

This, we believe, reasonable explanation is confirmed precisely by the legislative history.

Justice John M. Harlan: Was there no comparable provision than the 1939 Code with Section 262 of the -- of the --

Mr. Stephen J. Pollak: The provision which is similar to Section 262 was Section 24 (a) (1) which provided that no deduction shall be allowed for personal living or family expenses except for extraordinary medical expenses as defined in Section 23 (x), which was the medical deduction section, Justice Harlan.

Justice John M. Harlan: Thank you.

Mr. Stephen J. Pollak: The taxpayer, we believe, has no reasonable explanation for the change in the 1954 Code.He asserts that Congress wanted to be positive that transportation expenses would be deductible, although also intending to permit meals and lodgings.

It was well-settled.

There'd been no dispute for a decade that transportation, meals, and lodgings were deductible under the 1939 Code, thereby, Congress had to take no action but to incorporate the words of the 1939 Code had it wished merely to continue transportation, meals, and lodgings.

It did not do so.

It added an expressed provision for transportation thereby, we believe, excluding meals and lodgings.

The taxpayer's argument that it did not have that intention requires a review of the legislative history, and it is here clear beyond really any doubt that this was the intent of Congress.

In proposing the bill, the 19 -- that became the 1954 Code, President Eisenhower recommended liberalizing -- two liberalizing steps for medical deductions, that the ceiling be doubled so that each family could take $10,000 of medical deductions whereas, before, it had been limited to $5,000.

He recommended a second liberalizing step that the threshold exclusion be reduced from 5% to 3%, but then he stated that, and i'm quoting, “however, to avoid abuse in medical deductions, I recommend that the definition of medical expenses be tightened to exclude certain indirect travel expenses.”

All the evidence, and I stress the word “all” is that the tightened that the President spoke of was to be in meals and lodgings.

There is no other explanation of where the definition was to be tightened if it was not to exclude those items.

The committee reports, in turn, are even more conclusive if possible for this is one of those rare cases, I believe, where the issue here, minus respondent's name of course, was posed and disposed of right in the congressional reports of both the Senate and the House.

After stating this in the reports that subsection (b), that is the section added to provided transportation expense deduction, subsection (b) specifically excludes the deduction of any meals or lodgings while away from home receiving medical care.

After stating that in the reports, the reports pose this example and I will quote it it's quite brief.

“If a doctor prescribes that a patient go to Florida in order to alleviate specific chronic illness, to escape climatic conditions which have proved injurious to the health of the taxpayer, the cost of the taxpayer's transportation to Florida would be deductible but not his living expenses while there.

In the Court of Appeals for the Third Circuit, Judge Hastie, referring to this history, stated that the majority decision was extraordinary, in that it held that a recent enactment of Congress meant just the opposite of what the reports and other evidence indicated was the congressional intent.

The taxpayer, in his brief, in this Court attempts to create a mountain of ambiguity surrounding this issue.

We respectfully believe that not even a mouse comes forth.

In conclusion, the respondent complains in the wrong form for Congress allowed a deduction as a matter of legislative grace of certain medical expenses, certain personal living expenses which qualified as medical expenses.

The taxpayer has a sympathetic claim and complains or suggests that line drawing is the difficult issue.

Justice Potter Stewart: The what, line drawing?

Mr. Stephen J. Pollak: That line drawing is the difficult issue presented by the claim.

We believe that, here, the court cannot be asked to draw a line which Congress drew and which places the taxpayer's claim on the nondeductible side.

I'll reserve my remaining time.

Chief Justice Earl Warren: You may.

Mr. Cohen.

Argument of Martin D. Cohen

Mr. Martin D. Cohen: May it please the Court.

My time will be devoted to two efforts.

First, the Government has made certain arguments, the better ones of which deserve to be answered and they shall be answered.

And, secondly, we, in our brief, raise certain issues which directly invited response from the Government.

I shall state what these points were and leave it to this Court to determine whether the Government has responded with respect to each such point in a manner which satisfies the minds of fair and logical men.

Firstly, the Government relies upon the asserted significance of Section 262 of the 1954 Code.

If I may restate the theory of the Government, it is that Section 262 says that no deduction shall be allowed for personal family or living expenses except as otherwise provided in the income tax provisions of the Code.

Justice John M. Harlan: Expressly provided.

Mr. Martin D. Cohen: Expressly, as you say Your Honor.

Justice John M. Harlan: Yes.

Mr. Martin D. Cohen: The Government then goes on from there to say where in the Code is there any expressed provision for lodging in a case such as this.

Chief Justice Earl Warren: Does it say in the Code or in the Chapter?

Mr. Martin D. Cohen: It says in the Chapter, but I think it refers to the income tax provisions of the Code.

Chief Justice Earl Warren: Yes.

Mr. Martin D. Cohen: -- Code.

Chief Justice Earl Warren: Yes.

Mr. Martin D. Cohen: Our answer to this contention is that the Commissioner of Internal Revenue service himself, has undermined that argument by providing in rulings and regulations which he has promulgated that at least four situations he will in fact allow lodging expense and, indeed, food, despite the absence of an expressed provision in the Chapter, referred to in 262.

The first situation, of course, is that of a hospital bill which includes board and lodging.

By regulation, the Commissioner says, this, he will allow, although nowhere in the Code is there any expressed provision for board and lodging as part of a hospital bill.

However, the Commissioner goes a step further.

He says it is not necessary that the board and lodging expense be incurred in a hospital.

It is sufficient if incurred in an institution similar in nature to a hospital where the primary purpose for the taxpayer's presence there is the receipt of care which will alleviate a physical or mental condition.

Then, the Commissioner goes, what I believe is, still a step further.

He says, if an individual is in a school, a special school, the purpose of which is to overcome a physical or mental handicap on the part of that individual, the Commissioner will then allow food, lodging, and the cost of tuition for the presence in that special school and there is no limitation as to time.

Presumably, an individual that have such a defect can remain in the school for many years and, each year, the food and the lodging and the tuition will be deductible by the Commissioner's interpretation and, again, in the complete absence of any expressed authority for such an allowance in the Internal Revenue Code.

And, finally, there is another example of what I regard to be the Commissioner's inconsistency and that is in an unrelated but very analogous situation.

I have reference to the case of the man who is devoting his time to a particular charity which would be the type of charity that would be regarded as a tax-exempt organization.

The Commissioner has ruled, and we cite it in our brief, that where such an individual goes to a convention or a similar type of function on behalf of the charity, that he may deduct a reasonable amount for food and lodging while he is on such a trip.

And, again, there is no expressed authority anywhere in the Code for such an interpretation.

Now, the second point which the Government makes, which I believe deserves answer, is the point why would Congress have added subparagraph (b) to the previous definition of medical care, unless Congress had in mind the expressed exclusion of food and lodging expenses?

We say, first, that if that had been the intent of Congress, Congress could certainly had easily so stated in the Code itself.

It did not do so.

Secondly, we feel that there is a much less strained explanation for the addition of subparagraph (b), and that is contained in Revenue Ruling 55-251 which is cited in our brief.

Now, although that revenue ruling attempts to codify the various types of medical deductions which will be allowed under the 1939 Code, it was, curiously enough, issued in 1955 after the 1954 Code had been enacted.

Now, example 3 in that revenue ruling says this.

As the heading trans --

Justice John M. Harlan: What page is this please?

Mr. Martin D. Cohen: It would be, if the Court please, in the cumulative bulletin.

Justice John M. Harlan: You haven't got it --

Mr. Martin D. Cohen: I just took some inserts for convenience, but the revenue ruling is cited in our brief.

It's Revenue Ruling 55-251 and it's divided I think into 13 subparagraphs, taking the different types of medical expense which will or will not be allowed according to the revenue ruling.

Now, example 3 has a heading “transportation expense of a physically disabled person to and from his place of employment.”

In this case, taxicab fares were paid by a physically handicapped victim of polio in commuting to and from his place of employment.

The expense of such transportation is a personal expense not deductible for federal income tax purposes.

The rationale, I assume, being that the transportation was not to receive medical care but simply to get to work.

On the other hand, in example 8 of the same ruling, again under the heading “transportation expense,” it says transportation expense to a doctor's office says -- Section 39.23 (x)-1 (d) (1) of Regulations 118 provides the travel primarily for and essential to the rendition of medical services is an allowable medical deduction.

Transportation expenses as, for example, taxicab fares paid for and properly substantiated as being primarily for the rendition of medical services constitutes an allowable medical deduction.

So, you see, the Commissioner --

Justice William J. Brennan: But that's covered by the statute, isn't it?

Mr. Martin D. Cohen: This is under the 1939 Code, Your Honor.

Justice William J. Brennan: I beg your pardon.

Mr. Martin D. Cohen: And that had not been expressly covered.

Justice William J. Brennan: I beg your pardon.

Mr. Martin D. Cohen: So, I say that the Commissioner, himself, has furnished the answer to his own question, what would be the purpose for the addition of this subparagraph (b), and I say it is to clarify the difference between transportation of a physically handicapped person who is not, however, using the transportation to receive medical care and the transportation expense of one who is using the transportation in order to obtain medical care and I feel that is a far less strained interpreta -- explanation of the addition of subparagraph (b) than the one from which the Government contends.

Now, the third point which the Government makes, and the one I think that is the real problem in this case, is the committee report, an excerpt of which was read by Mr. Pollak.

My response to this is that, assuming that Congress intended that what it stated in that committee report be the law and if we can sanction legislation by committee report rather than by statute, nevertheless, the facts in that example are not our facts.

If you'll recall that the simple statement was it was a patient, suffering from a chronic ailment, who goes to a warmer climate to alleviate the condition.

We have here, as my adversary so fairly stated, a man who after four heart attacks at the age of 42, was told by his doctor “You have either got to leave the blustery winds and cold temperatures of New Jersey during the winter months and also take this anticoagulant drug that it have prescribed for you or, surely, you are going to die.”

Now, there are two ways that you can avoid the in temp-- the inclement climate of Jersey.

One would be to be hospitalized.

The other would be to go to a climate where you will not be subjected to these intemperate winds and cold temperatures.

“Now, in your case,” the doctor told Mr. Bilder, and this is all in the record, “I advise against hospitalization.

You are a hypertense, over energetic person and if we close you or shut you up in a hospital for three months, the walls are going to start closing in on you and it's going to have the effect of perhaps producing another myocardial infarction.

Statistics demonstrate that a person of your temperament, if closed in, and who has a past history of heart attacks and myocardial infarctions is likely to have further ones.

And, in addition to that, when you rec -- when you had suffered these myocardial infarctions, your coronary arteries were permanently damaged.

Now, true, nature supplies new vessels to take over the function to bring blood to and from the heart, but nature needs an assist in the form of modern exercise and, this, you cannot get in the hospital.

So, in your case, I recommend as the best means of preserving your life that you go to a place where you can get this modern exercise and, at the same time, receive this anticoagulant therapy and, most importantly, have available a doctor and a testing laboratory which is familiar with the peculiar properties of this drug,” because in 1953 there were very few such in the country.

Fort Lauderdale, as the Tax Court found, happen to be one of them.

So, we have the anomaly of this taxpayer, had he not obeyed his doctor's advice, had he nevertheless said “well, put me in a hospital.

It's closer to home and I want to be in touch with the office every day,” had he disobeyed his doctor, he could have gotten his deduction for food and lodging.

However, while obeying what his doctor, one of the most eminent heart men in the world told him to do, he is now confronted with the almost incredible situation of having the Government say “we can't allow you to a deduction if you obey your doctor, only, in your case if you had disobeyed him.”

Justice Felix Frankfurter: Your argument is very appealing but it does presuppose that the tax laws of particular allowances is a very logical system, doesn't it?

Mr. Martin D. Cohen: I wouldn't want to undertake to get into that one, Mr. Justice Frankfurter.

Finally, I think an argument made by the Government which must be answered is a suggestion that the broad interpretation of Section 23 (x) of the 1939 Code had led to widespread abuse.

Now, in our brief, in an appendix, we attempted to list all those cases which our research discovery which under the 1939 Code or under any Code, had dealt with the question of the allowability of this type of expense as a medical deduction.

And, we point out that the Government and the courts were most deciduous in seeing that there was no abuse of this statute which was to be broadly interpreted because I think only 5 of the 40 cases was of full deduction allowed and perhaps in some nine others was a partial deduction allowed.

In all other 26 cases, there was a complete disallowance of the expense because the taxpayer had failed to satisfy the court that the primary purpose for the expense in question was the receipt of medical care.

So, we would sug -- I would respectfully suggest that this case be decided not on possible abuse, which I don't think will occur, but on the correct law to be applied here, and I trust that this Court will decide this case directly and I further trust that the Commissioner will use his discretion in determining the wheat -- separating the wheat from the chaff in subsequent cases as he has in the past.

Now, if I may, I should like to turn to those points that we have made which I do not feel the Government has responded to.

First, I raise the -- we raise the question how can lodging expense be allowed in situations which the regulations permit and not in a case such as this or not in the case such as that of Mr. Carasso who had -- who went to the Second Circuit but lost.

And, if I may very briefly restate the facts in the Carasso case, this was a man of modest means who was employed as a traveling salesman.

While he was in New England, in connection with his duties as such salesman, he was stricken with a serious illness which required the major portion of his stomach be removed by surgery.

And, after two or three weeks of being in the hospital, when he had lost 50 pounds of weight, that required some-23 quarts of blood and informed transfusions, he was released from the hospital but he was too weak to travel back to his home in Brooklyn, New York, so he arranged to stay for a time with some friends nearby the hospital.

And finally, he made the trip back to Brooklyn.

It was in March of the year and he was getting no better.

So, his doctor said to him “If you wish to have a healthy con -- a convalescence which will enable you to regain your vigor, I suggest that you get out of Brooklyn in this month of March, go to some place that will give you a little opportunity to take your wife's arm and walk and gradually build your strength back,” and this man did that.

He went to Bermuda for nine days in the company of his wife whom the Tax Court found served the function of a nurse while there and that he could not in fact have travelled without her.

And, the Tax Court further found that there's no question that a man of this modest means would not have taken that trip had it not been for the doctor's advice.

The question we'd like to put to the -- and, before I ask the question, in our brief on pages 25 and 26, we pose two hypothetical cases which we feel, if the Government's contention were upheld here, would produce very inequitable and even absurd results.

And, it's quite sufficient for the purposes of this Court those cases on page 25 and 26 of our brief be regarded as hypothetical cases.

The fact of the matter is that these facts were brought to my attention in a letter from a lawyer named Sherman R. Burnet of Winnetka, Illinois and he, himself, was the one whose situation was described in our first hypothetical set of facts.

And, the second set of facts relates to an acquaintance that he met while at Madison, Wisconsin at the hospital there.

As I say, I'm satisfied that the Court regard these are hypothetical situations, but I add this to show you that the possibility of these things occurring is not so remote because, in fact, this is how I came to possession of the facts.

So that, if the Government by -- as the Commissioner has provided by his regulation, is going to remit, let us say, an individual who is an athlete and, perhaps, is having trouble with his knee to go to a hospital and to remain there for observation and diagnosis and perhaps nothing will be done about it, and he may deduct his food and lodging for as many times as he may go for this purpose or if they will allow a boy who has some psychological difficulties to go to a special place where, for perhaps many years, an effort was made to straighten him out, whether successfully or not successfully, and he may deduct his food and his lodging and his tuition there.

How can the Commissioner, in fairness, say that a man like Mr. Carasso or a man like Mr. Bilder or either of the two individuals whose cases are posed in the hypotheticals, that they may not get a deduction for that which they -- for that expense which they never would have incurred but for the existence of a serious physical condition and their obedience to the advice of a competent doctor.

The next point which we feel has not been answered at all, either in the Government's brief or here in the oral argument, is the matter of whether or not Section 213 was intended to be a relief statute so that deduction should be allowed at the very least in the cases of those whose hardship situation is due to medical expense would otherwise find no relief.

Now, point three of -- point four, I believe, of our brief goes into some detail of this and I will not attempt now to restate all that, but I do think that this should be brought to the Court's attention.

Our research discovered that there were perhaps some 100 odd cases decided by lower courts and courts of intermediate appellate jurisdiction involving the medical deduction.

This is the first case involving any question coming under the medical expense provision to reach this Court.

I think that the medical deduction is one which, perhaps, affects more taxpayers than any other provision in the Internal Revenue Code, more individual taxpayers and I think that taxpayers and tax administrators, alike, will look to this Court for guidance in the future as to whether this section should be regarded as a remedial provision of the law which is to be liberally construed in favor of those for whose benefit it was intended or whether, as the Commissioner has stated, is to be strictly construed against the taxpayer who is claiming a medical expense.

Much of the legislature -- legislative histories or, I should say, such of the legislative history as it is available indicates only that this was intended to be a remedial statue which was to be liberally construed, and even the statement of Mr. Fulsome, which is cited in the Government's brief, indicates that that is so, with respect to the 1954 Code.

And, finally, we have raised this point.

In the Tax Court, it will be recalled, the Government was contesting both Mr. Bilder's right to the deduction for transportation and his deduction for the lodging.

Following the decision of the Tax Court, the Commissioner acquiesced in that part of the Tax Court's opinion which said that Mr. Bilder should be allowed a deduction for his transportation.

Now, in the Lester case, recently decided by this Court, and a previous case, Olympic Radio and Television, I believe the name was, it was pointed out that every statute should be given as much internal symmetry and consistency as is possible.

We say that if you disallow the lodging to Mr. Bilder in this case, this statute lack such internal symmetry and consistency because if he is entitled to deduct his transportation, as the Tax Court found and as the Commissioner has now acquiesced, he must have taken that transportation, by the very language of the statute, in -- because -- as a primary and essential means of receiving medical care described in subparagraph (a).

And, yet, the Commissioner says that Mr. Bilder didn't receive any medical care under subparagraph (a).

If this is so, it makes -- it makes a completely asymmetrical piece of work out of this section of the Code.

For these reasons and perhaps, more particularly for those more fully set forth in our brief, we respectfully pray that the --

Justice John M. Harlan: If this man had gone into a hospital down in Florida, instead of a boarding house, would he get the deduction?

Mr. Martin D. Cohen: I think, Your Honor, before I can answer that question I would have to know on what basis the doctor suggested that he take that course of --

Justice John M. Harlan: Suppose the doctor said “I want you to be where you can press a button and have medical advice, a moment's notice, and if you can't get lodgings either close enough to this kind of service, then you better go into a hospital.”

Mr. Martin D. Cohen: I would say that if a taxpayer receives such advice from the doctor in good faith on both sides, on the doctor's side, on the taxpayer's side --

Justice John M. Harlan: There's no question of good faith involved in --

Mr. Martin D. Cohen: No.

Justice John M. Harlan: -- (Inaudible) record.

Mr. Martin D. Cohen: I would say that, then, he must -- he must having incurred that expense because of obedience to a doctor's advice, be permitted the deduction.

I'm simply going to say that we feel that our position requires that the judgment alo -- below be affirmed.

Chief Justice Earl Warren: Mr. Pollak.

Justice Potter Stewart: Mr. Pollak, how would you answer Mr. Justice Harlan's hypothetical?

Rebuttal of Stephen J. Pollak

Mr. Stephen J. Pollak: I would state that if the taxpayer's medical advice was that he repaired a hospital in Florida, his meals and lodgings provided as part of the hospital bill will be deductible.

That's stated in the congressional reports and it is part of the Commissioner's regulations.

Justice John M. Harlan: It's hard for me to make any sense by distinction between the two cases.

I'm not saying that it makes -- Congress can do whatever it wants to do and it's still obvious that it still doesn't make much sense.

Mr. Stephen J. Pollak: Well, Congress has indicated the lines that it's drawn and that those -- it is that line which we're standing on in this Court.

Justice John M. Harlan: Well, I think you're entitled to it and I think you'd better walk that rope just as straight as you can.

Justice William J. Brennan: Mr. Pollak, suppose this varies from Mr. Justice Harlan's hypothetical, I gather from what Mr. Cohen has told us that not too many hospitals or something akin to a hospital the same rules apply.

Mr. Stephen J. Pollak: The --

Justice William J. Brennan: Suppose that, if that's so, suppose this was some kind of a convalescent home in Florida rather than a hospital to which the doctor sent him.

Mr. Stephen J. Pollak: Well, Mr. Cohen's hypotheticals pose the question that there are always some problems that are close to the line.

It has been drawn by Congress.

We are not in Court requesting this Court to draw a line.

The issue here, we suggest, is not close to any line.

Justice William J. Brennan: I understand your position.

But I'm --

Mr. Stephen J. Pollak: Yes.

Justice William J. Brennan: -- I'm just interested what would happen if, rather than to a hospital, the doctor told him to go to a convalescent home and he did.

Mr. Stephen J. Pollak: The -- might I rely on the regulations which state the Commissioner's position.

The extent to which expenses for care in an institution other than a hospital shall constitute medical care is primarily a question of fact which depends upon the condition of the individual and the nature of the services he receives rather than the nature of the institution.

A private establishment which is regularly engaged in providing the types of care of services outlined in the subdivision will then allow the deduction of the bill provided by that institution.

And then, this -- this regulation endeavors, I'm sure after a great deal of thought and care to spell out a line which, of course, is not an issue by the particular rental of the apartment Mr. Bilder rented in this case.

Justice William J. Brennan: Well, I suppose it might be the condition that the doctor was satisfied required the climate of Florida but, also, the condition was such that he had to be right nearby some care, not necessarily a hospital care, but that kind of a professional care that a convalescent home or otherwise might provide.

Mr. Stephen J. Pollak: And, he would then be in a home for medical care?

Justice William J. Brennan: Yes.

Mr. Stephen J. Pollak: In that home.

Justice William J. Brennan: In that sense.

Mr. Stephen J. Pollak: Well, I believe if he is in an institution and, therefore, the medical care which he receives is institution bill, be it including lodgings and food is deductible.

Justice John M. Harlan: Of course Blue Cross draws this kind of distinction, too, doesn't it?

If you're in a hospital, you get your Blue Cross and if you're told by the doctor to go off in convalescent bar in Atlantic City, you don't get it.

Mr. Stephen J. Pollak: I accept your characterization --

Justice John M. Harlan: Well, I'm just saying --

Mr. Stephen J. Pollak: -- of Blue Cross (Inaudible) insured me.

I'm sorry, I don't know.

Justice John M. Harlan: You never had to use it.

Mr. Stephen J. Pollak: And, I haven't been so I can't tell whether they draw the same line.

I wanted to address myself only to one of the points that Mr. Cohen has raised.

The statement was made as to whether this provision of the Code is a remedial provision and that this Court will lay down guidelines to which all practitioners will look.

I don't believe that the case raises that issue and that the question of whether this is to receive a liberal construction is raised for it has been clear from the history of the medical deduction provision that it was enacted to liberalize the treatment of taxpayers who suffered severe medical expenses.

The question this morning -- this afternoon is only whether the action taken in 1954 which was characterized by President Eisenhower as the tightening of the definition of medical expenses to preclude abuse is to receive a construction which is directly opposite to what the committee reports and what the reasonable interpretation would be.

Justice John M. Harlan: So that -- so far the Eisenhower statement is in your brief?

Mr. Stephen J. Pollak: It is -- it is not in our brief.

It is -- I found it upon preparing for argument.

Justice John M. Harlan: But what's -- where can you find it?

Mr. Stephen J. Pollak: It is at 1 U.S.C. Congressional and Administrative News 1565.

Justice John M. Harlan: Thank you.

Mr. Stephen J. Pollak: It's the budget message of January 21, 1954.

Chief Justice Earl Warren: Very well.