Case: 13-10586        Date Filed: 03/27/2014      Page: 1 of 8


                                                                             [PUBLISH]


                    IN THE UNITED STATES COURT OF APPEALS

                             FOR THE ELEVENTH CIRCUIT
                            ______________________________

                                     No. 13-10586
                            ______________________________

                                      Agency No. 565-11


ROBERT D. PACKARD,

                                                                   Petitioner-Appellee,
                                             versus


COMMISSIONER OF INTERNAL REVENUE,

                                                                   Respondent-Appellant.


                            ______________________________

                           Petition for Review of a Decision of the
                                   United States Tax Court
                            ______________________________

                                     (March 27, 2014)

Before WILSON, Circuit Judge, and BUCKLEW,* and LAZZARA,** District Judges.

PER CURIAM:

       *
         Honorable Susan C. Bucklew, United States District Judge for the Middle District of
Florida, sitting by designation.
       **
          Honorable Richard A. Lazzara, United States District Court for the Middle District of
Florida, sitting by designation.
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       Appellant Commissioner of Internal Revenue (“the Commissioner”) appeals the

Tax Court’s grant of summary judgment to Appellee Robert Packard (“Mr. Packard”) on

his pro se petition for review of a tax deficiency determination. At issue in this case is

whether the Tax Court erred as a matter of law in holding that Mr. Packard and his wife,

Marianna (“Mrs. Packard”) (collectively “the Packards”), were entitled to the first-time

homebuyer tax credit even though, when considered as a single marital unit, they did not

qualify for the credit under 26 U.S.C. § 36(c) of the Internal Revenue Code. We hold that

the Tax Court’s decision is directly contrary to the plain language of the statute and

should be reversed.

                                    I. BACKGROUND

       The parties stipulated to all of the relevant facts. The Packards were married on

November 22, 2008, and lived in separate residences until December 1, 2009, when they

purchased and moved into a home together in Tarpon Springs, Florida (“the subject

home”). The Packards filed “a married filing jointly” tax return with the Internal

Revenue Service for the 2009 tax year, in which they claimed a $6,500 first-time

homebuyer credit based upon the “exception” provided for in § 36(c)(6) of the Internal

Revenue Code to the definition of “first-time homebuyer.” This exception treats a long-

time resident as a first-time homebuyer if “an individual (and, if married, such

individual’s spouse)” owned and used the same principal residence for five consecutive

years during the eight-year period ending on the date of purchase of a subsequent

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residence. Mrs. Packard had retained an ownership interest in a prior principal residence

in Clearwater, Florida, for more than five consecutive years, ending on November 17,

2009. Mr. Packard rented and lived in a separate residence in Tarpon Springs, Florida,

until he moved into the subject home with Mrs. Packard. Mr. Packard had no ownership

interest in a principal residence during the three-year period ending on December 1,

2009.1

         On October 18, 2010, the Commissioner rejected the Packards’ claimed tax credit

and issued a statutory notice of deficiency with respect to their 2009 federal income tax

liability. On January 6, 2011, within 90 days of the date of the notice, Mr. Packard,

timely petitioned the Tax Court to redetermine the income tax deficiency. See 26 U.S.C.

§ 6213(a).2 In the petition, Mr. Packard alleged that he was entitled to the first-time

homebuyer credit because Mrs. Packard owned a prior residence for more than five

consecutive years before the purchase of the subject home. The Commissioner moved for

summary judgment arguing that under the plain language of § 36(c)(6) both husband and

wife must reside in the same residence for the prescribed period of time in order to




         1
          Section 36(c)(1) defines a “first-time homebuyer” as “any individual if such individual
(and if married, such individual’s spouse) had no present ownership interest in a principal
residence during the 3-year period ending on the date of the purchase” at issue. Therefore, Mr.
Packard would have qualified for the tax credit under this section as an unmarried individual.
         2
          Mrs. Packard did not join in the petition and, therefore, is not a party to this case. See
Faust v. Comm’r, 

, 17 (2011); Edmonds v. Comm’r, 

, 711 n.2 (1998).

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qualify for the credit and that while Mrs. Packard owned and lived in a prior residence for

five consecutive years prior to the purchase of the subject home, Mr. Packard did not.

       The Tax Court, however, granted summary judgment in Mr. Packard’s favor,

determining that the Packards were in fact entitled to a $6,500 first-time homebuyer credit

under § 36(c)(6). In its opinion, the Tax Court acknowledged that under an application of

the plain language of the statute, the Packards were not eligible for the credit, but then

discussed how Mr. Packard would have been eligible for the first-time homebuyer credit

under § 36(c)(1) if Mrs. Packard had not owned a prior residence and that, conversely,

Mrs. Packard would have been eligible for the long-time resident credit under § 36(c)(6)

if Mr. Packard had co-owned her Clearwater, Florida, residence and lived there with her

for five consecutive years. Characterizing the effects of a plain reading of the statutory

sections as “absurd,” the Tax Court concluded that Congress could not have intended to

deny the credit where “[i]ndividually” one spouse would have qualified for the credit

under § 36(c)(1) and the other spouse would have qualified for the credit under §

36(c)(6). Packard v. Comm’r, 

, 394–95 (2012). As the Tax Court

explained, “we cannot believe that Congress intended to restrict the first-time homebuyer

credit to only those married couples where both spouses qualify under the same paragraph

of section 36(c).” 

The Tax Court then ruled that because, in its view, Mr.

Packard qualified as a first-time homebuyer under § 36(c)(1) and Mrs. Packard was

treated as a first-time homebuyer under § 36(c)(6), the Packards were entitled to a first-


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time homebuyer credit under § 36. Finally, the Tax Court held that because the Packards

would not have been entitled to the first-time homebuyer credit except for the addition of

paragraph (6) to § 36(c), they could only claim a credit of up to $6,500, as that is the limit

pursuant to § 36(b)(1)(D) of the Internal Revenue Code for taxpayers who qualified under

the “long-time resident” exception.

       On appeal, the Commissioner argues that the plain language and structure of § 36

require that spouses qualify under the same paragraph to be eligible for a first-time

homebuyer credit. Because no court has addressed this issue in a published decision, oral

argument was held in this case. Mr. Packard did not appear for oral argument, nor did he

file a brief in this appeal.

                               II. STANDARD OF REVIEW

       We review the Tax Court’s decision to grant summary judgment de novo. Roberts

v. Comm’r, 

, 1227 (11th Cir. 2003) (per curiam). Summary judgment is

proper if the evidence before the court “establish[es] that there is no genuine issue as to

any material fact and that a decision may be rendered as a matter of law.” 

marks omitted). “In deciding whether to grant summary judgment, the court

examines the facts in the light most favorable to the nonmoving party.” 

       When Congress originally enacted § 36(c)(1), it defined “first-time homebuyer” as

an “individual (and if married, such individual’s spouse)” who had no present ownership


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interest in a principal residence for the three years preceding the purchase. With that

parenthetical phrase, Congress precluded a husband and wife from being eligible for the

credit unless they both satisfied the requirements of § 36(c)(1). When Congress later

added the long-time resident exception in a separate subsection, § 36(c)(6), it included the

same parenthetical phrase to define a long-time resident as an “individual (and if married,

such individual’s spouse)” who met a five-year consecutive residency requirement. Thus,

Congress originally precluded a married couple from being eligible as first-time

homebuyers unless both spouses satisfied the requirements of § 36(c)(1), and when it

added § 36(c)(6), it also precluded a married couple from being eligible unless both

satisfied the requirements of that subsection.

       The “preeminent canon of statutory interpretation” requires the court to “presume

that the legislature says in a statute what it means and means in a statute what it says

there.” BedRoc Ltd., LLC v. United States, 

, 183, 

, 1593, 

(2004) (quoting Conn. Nat’l Bank v. Germain, 

, 253–54, 

, 1150, 

(1992) (alteration and internal quotation marks

omitted). A court’s inquiry, therefore, “begins with the statutory text, and ends there as

well if the text is unambiguous.” BedRoc Ltd., 

, 124 S. Ct. at 1593.

The unambiguous language of § 36(c)(1) and § 36(c)(6), therefore, requires that a married

individual be considered together with his or her spouse as a unit to qualify under either

paragraph. The Tax Court acknowledged that the language of § 36(c) was unambiguous,


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yet it deviated from that plain language in allowing the Packards to claim the first-time

homebuyer credit when they did not qualify under the same paragraph. The Tax Court’s

observation that the Packards would have qualified for the tax credit individually had they

not been married has no bearing on the application of § 36(c) to the facts of this case.

Further, the Commissioner’s reading of § 36(c) did not produce an absurd result, as the

Tax Court suggested without explaining. The absurdity exception to the plain-meaning

rule only comes into play where the absurdity is “so gross as to shock the general moral or

common sense.” Crooks v. Harrelson, 

, 60, 

, 50, 

(1930). Here, the plain language in § 36(c)(1) and § 36(c)(6) of the Internal Revenue

Code makes clear Congress’s intent to treat married couples as a single inseparable unit

for purposes of determining first-time homebuyer eligibility. While the effect of

enforcing the statute as written may seem inequitable in light of the facts of this case, it

does not shock general moral or common sense. Deductions and credits are matters of

legislative grace and are not allowable unless Congress specifically provides for them.

INDOPCO, Inc. v. Comm’r, 

, 84, 

, 1043, 

(1992); Randall v. Comm’r, 

, 1567 (11th Cir. 1984) (per curiam).

                                    IV. CONCLUSION

       Section 36(c) of the Internal Revenue Code requires that for a married couple to

qualify for the first-time homebuyer tax credit, both spouses collectively must meet the

same statutory requirements, either as first-time homebuyers under § 36(c)(1) or as long-


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time residents under § 36(c)(6). The application of the plain language of § 36(c) to the

facts of this case does not produce an absurd result or frustrate the intent of Congress.

The Tax Court was obligated to enforce the statute according to its plain terms and erred

as a matter of law in failing to do so. Accordingly, we reverse the decision of the Tax

Court and remand with instructions to grant the Commissioner’s motion for summary

judgment.

       REVERSED and REMANDED.




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