Has the IRS Ruled on When Life Begins?

IRS abortion
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Hot-button issues in the 2020 campaign will include how to respond to climate change, foreign interference in our elections and immigration. Add to the list, abortion access.  

Abortion disputes cause opponents and supporters to cluster in different corners on the question of when life begins. Opponents say at conception and supporters say at birth.

“When Does Life Begin Again?”, an article in the June 9, 2019 edition of the New York Times, notes that many opponents “take it still further, that the blastocyst, that clump of cells smaller than a raspberry that forms in the early days after a sperm meets an egg, is a person.”

Why, Dear Readers,  am I opening one to tell you more than you ever wanted to know about abortion lingo? Well, it's because of something the officially apolitical Internal Revenue Service did in 1973. It unwittingly delivered a body blow to what the Times article says is “the ‘life begins at conception’ school of abortion banning.”

To understand why, go back with me to the closing days of December, 2017, when Congress approved and President Trump signed the Tax Cuts and Jobs Act (TCJA), the most comprehensive overhaul of the Internal Revenue Code since the Tax Reform Act of 1986. The wide-ranging legislation included a provision that deep-sixed dependency exemptions, starting with returns for 2018 that were filed in 2019.

Before the TCJA took effect, those exemptions had been on the books since 1914, when the Department of the Treasury unveiled the new Form 1040 for calendar year 1913. Allowable write-offs included a deduction of $3,000 for single taxpayers and $4,000 for married couples.

Subsequently, the IRS has issued many rulings on when exemptions could or couldn’t be claimed. Also, disgruntled taxpayers often have asked the courts to approve disallowed exemptions.

Consider Revenue Ruling 73-156 and its unexpected tie to our polarized politics. Whatever one’s views on abortion, there can be no two opinions on whether the ruling provides comfort for abortion supporters.

How come? Because it noted the agency’s long-standing position that an exemption for a child could be claimed only if the child was born alive. This holds true even when a child lives only for a moment.

Whether a child is born alive depends on state law. There must be proof of a live birth “shown by an official document, such as a birth certificate.” The ruling prohibited an exemption for a stillborn child.

The courts agree with the IRS that an unborn child fails to qualify as a dependent, as Andrea Cassman learned. She became pregnant in October of 1991 and gave birth to a son in July of 1992. Andrea amended her return for 1991 and claimed the son.

When the IRS rejected Andrea’s refund claim, she took the dispute to the U.S. Court of Claims, which sided against her. The court noted that to allow an exemption as of the date of conception would spawn an administrative morass, whereas the date of birth is an easily identified date, with a live birth resulting in the issuance of a birth certificate and the creation of a clear record.

To allow deductions based on conception would create confusion because of uncertainty about when conception actually takes place. Moreover, said the court, a date-of-conception approach would authorize exemptions for pregnancies that never resulted in live births and the issuance of birth certificates, including pregnancies ended by miscarriages, induced abortions and stillbirths.

Additional articles: A reminder for accountants who would welcome advice on how to alert clients to tactics that trim taxes for this year and even give a head start for next year: Delve into the archive of my articles (more than 300 and counting). 

About Julian Block

Julian Block

Attorney and author Julian Block is frequently quoted in the New York Times, Wall Street Journal, and the Washington Post. He has been cited as “a leading tax professional” (New York Times), an “accomplished writer on taxes” (Wall Street Journal), and “an authority on tax planning” (Financial Planning magazine). More information about his books can be found at julianblocktaxexpert.com

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Jun 12th 2019 00:27

Just a dumb question, someone ACTUALLY, amended a return, to get the exemption, perhaps EITC, all amounting to a few thousand dollars? Then paid someone to take this to Court? I think that is the REAL story here. Nice read

Thanks (1)
to Craig Smalley
Jun 12th 2019 14:10

Craig Smalley wrote:

Just a dumb question, someone ACTUALLY, amended a return, to get the exemption, perhaps EITC, all amounting to a few thousand dollars? Then paid someone to take this to Court? I think that is the REAL story here. Nice read

Thanks (0)
to Julian Block
Jun 12th 2019 14:18

Craig, The last two words of your comment underscore that there can be no two opinions about whether you are a perceptive person. Thanks.

Thanks (1)
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By bfralic
Jun 12th 2019 17:06

I don’t think this is a valid argument for deciding the IRS has made a determination for when life begins. The purpose of the deduction is to offset some of the expenses for parenting. During the pregnancy those expenses are not yet being incurred. To allow a deduction for a baby still in the womb would be a little like allowing depreciation on a vehicle your in the process of buying at year end. Common sense says you don’t get the deduction until you have the expenses. There is no morality indication here.

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to bfralic
Jun 12th 2019 17:17

I believe that is what the author is pointing out, right? I mean, OBVIOUSLY, in 2019 we are looking a 1973 Rev Rul saying it is common sense. However, I believe that the crux of Roe v Wade was when life began. From the Rev Rul, you can see that at the time someone questioned it. I was only a year old at the time. I am just putting two and two together.

Thanks (1)
Jun 12th 2019 17:29

Understandably, I'm flattered that my article has generated some back and forth.

Thanks (1)
to Julian Block
Jun 12th 2019 17:35

careful what you wish for :)

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