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Moreover, the parties stipulated that petitioner would have
satisfied the first requirement if he had owned more than 5
percent of the engineering consulting firms. Petitioners’ only
claim is that section 469(c)(7)(D)(ii) is unconstitutional
because, by treating a nonowner employee differently than a
“5–percent owner”, the statute violates the Fifth Amendment’s
guaranty of equal protection under the laws.
Generally, a statutory classification is valid if it is
rationally related to a legitimate government interest. See
Regan v. Taxation With Representation, 461 U.S. 540, 547 (1983).
We would apply a higher standard of review if the statute
infringed fundamental rights or targeted a suspect class. See,
e.g., id.; Harris v. McRae, 448 U.S. 297, 322 (1980).
In taxation, more so than in some other fields, Congress has
broad classification powers. See Regan v. Taxation With
Representation, supra; Lehnhausen v. Lake Shore Auto Parts Co.,
410 U.S. 356, 359 (1973); Steward Mach. Co. v. Davis, 301 U.S.
548, 584 (1937); Brushaber v. Union Pac. R.R., 240 U.S. 1, 25–26
(1916); Flint v. Stone Tracy Co., 220 U.S. 107, 158 (1911). As
the Supreme Court emphatically noted in Madden v. Kentucky, 309
U.S. 83, 87–88 (1940):
The broad discretion as to classification possessed by
a legislature in the field of taxation has long been
recognized. * * * the passage of time has only served
to underscore the wisdom of that recognition of the
large area of discretion which is needed by a legis-
lature in formulating sound tax policies. * * * Since
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