Michael B. Streiff and Lauren D. Streiff - Page 7




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                    petitioner meets the criteria for exemption established by                                                                                             
                    Bieberdorf v. Commissioner, 60 T.C. 114 (1973), and Bailey v.                                                                                          
                    Commissioner, 60 T.C. 447 (1973).  The facts in both Bieberdorf                                                                                        
                    and Bailey are analogous to those of the present case.  In                                                                                             
                    Bieberdorf the taxpayer was a medical doctor who received a grant                                                                                      
                    from NIH for research in gastroenterology.  In Bailey the                                                                                              
                    taxpayer was a medical doctor who received a grant from NIH as                                                                                         
                    part of a training program in cardiorenal research.  In both                                                                                           
                    cases, the amount of time spent in activities for the benefit of                                                                                       
                    the hospital was deemed de minimis compared to the amount of time                                                                                      
                    spent in research and training related to the grants, and we held                                                                                      
                    that the taxpayers qualified for exemption under the pre-1986                                                                                          
                    section 117.                                                                                                                                           
                              We may agree that petitioner meets the requirements of                                                                                       
                    Bieberdorf and Bailey.  The problem is that these cases were                                                                                           
                    decided under different statutory provisions.  By the 1986                                                                                             
                    amendments, Congress adopted a different statutory scheme                                                                                              
                    requiring that the funds must be used by degree candidates for                                                                                         
                    qualified tuition and related expenses.  Our holdings in                                                                                               
                    Bieberdorf and Bailey are not germane to the provisions of                                                                                             
                    section 117 that apply here.  Consequently, Bieberdorf and Bailey                                                                                      
                    are not reliable precedent.                                                                                                                            
                              As a final matter, petitioner urges us to look beyond the                                                                                    
                    text of the statute and, as a public policy matter, allow the                                                                                          
                    grant to be exempt.  It is for Congress to resolve tension                                                                                             




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