- 7 -
Rose v. Commissioner, 55 T.C. 28, 31 (1970). Such retroactive
application violates the Due Process Clause of the Fifth
Amendment when "'retroactive application is so harsh and
oppressive as to transgress the constitutional limitation.'"
United States v. Carlton, 512 U.S. 26, 30 (1994) (quoting Welch
v. Henry, 305 U.S. 134, 147 (1938)). According to the Supreme
Court in Carlton the “harsh and oppressive” standard is the same
as the “‘prohibition against arbitrary and irrational
legislation’ that applies generally to enactments in the sphere
of economic policy.” Id. (quoting Pension Benefit Guar. Corp. v.
R.A. Gray & Co., 467 U.S. 717, 733 (1984)). Therefore,
retroactive tax provisions will be upheld if they are supported
by a “legitimate legislative purpose furthered by rational
means”. Id. at 30-31.
We understand petitioner’s frustration because she complied
with the requirements of section 32(c)(3) as they existed when
she filed her Federal income tax returns for 1995 and 1996, and
we are particularly sympathetic to her position. However, we are
compelled to follow our recent opinion in Sutherland v.
Commissioner, T.C. Memo. 2001-8. In that case, this Court
concluded that the 1998 retroactive amendment of section 32(c)(3)
was a clarification of existing law and upheld it as
constitutional. Accordingly, for the reasons set forth in
Sutherland, we sustain respondent’s determination. If
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011