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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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Last modified: May 25, 2011