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Thursday, May 22, 2003

Is the IRS's Definition of Disability Valid?

So I pack up my home computer for a never-ending move to a new home, and Tax Court decides NOW is the time to release an opinion I might actually be qualified to review.

First, go read Stuart Levine�s review of Keeley, in a post entitled �A Depressing Opinion�. He analyzes this case as well as any tax attorney can, so I don�t need to repeat it, and much of what I have to say further in this post will refer to items in his post.

Done? Good.

The reason I am commenting further here is that it turns out that in my day job, I am a legal aid attorney who specializes in representing SSI disability applicants. This perspective seems relevant to analyzing this case.

First, Stuart notes, �the Court concluded, without any real discussion, that Keeley's condition was not irremediable.� This legal sloppiness is indicative of a particular type of discrimination faced by the mentally ill. The mentally ill are treated with an attitude of, �Oh come on! Just snap out of it!� This is an attitude not exhibited around those who are blind, deaf, or missing both their feet, and it steams from a lack of belief in the �reality� of mental illness.

Next, Stuart notes that the restrictive definition of mental illness found in the regulations and applied by Tax Court is absent from the statute. Consider the statutory definition of �disability� as an �inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.� This is not the language from IRC Section 72(m)(7), but the language from 42 USCS Sections 423(d)(1)(A), and 1382c(a)(3)(A), defining disability for purposes of Social Security Disability Insurance and Supplemental Security Income. Social Security�s regulations, however interpret this entirely differently from Treasury�s. Significantly, Social Security does not require, �continued institutionalization or constant supervision� for a mental illness to be a �disability�. To oversimplify, if the mental impairment is medically documented and prevents substantial gainful activity, it is a �disability�. I have helped obtain SSI for many clients based on mental disabilities despite the fact that they live alone, manage their own funds, and see psychiatrists less than once a month.

Now, I have not done the appropriate legal research, but I bet if I did, I would discover the following:
1. The similarity in language from the SSI/SSDI code and the IRC defining disability is not a coincidence.
2. The purpose of the SSI/SSDI code is to help the disabled, the purpose of the IRC is to collect revenue. It is therefor much more likely that the shared definition of disability was developed in the sausage grinder of writing the SSI/SSDI code, and then copied into the IRC, rather than the other way around.
3. The copying of the disability definition from the SSI/SSDI code into the IRC represents an intent on the part of congress that the same standards be used for both.

The Keeley opinion cites only one case, a T.C. case from 1996 (Dwyer), as precedent. All other cites were to the code and regulations. This suggests to me that the underlying regulations have not been challenged above Tax Court, which cannot be expected to consider the implication of the Social Security Code. I therefor have to slightly disagree with Stuart�s conclusion that it is good that this is only a Summary opinion. Rather, I think that if this were not a Summary opinion, it would make a good case for an appeal challenging Treasury�s regulations as not following the intent of the statute.

HUGE CAVEAT: I say I �slightly� disagree because I am not sure that adopting Social Security�s regulatory definitions would be all that beneficial, or that it would have helped Mr. Keeley. True, in a Social Security disability hearing under these facts, no Administrative Law Judge would question whether or not Mr. Keeley suffered from a severe mental disorder. Of course he did. No, the big issue at the SSDI hearing would be whether he was capable of engaging in �substantial gainful activity� (SGA). Treasury regulations define SGA as the activity, or a comparable activity, in which the individual customarily engaged prior to the disability. Sounds great to me. Social Security, oversimplifying again, defines SGA as any work earing over $800.00 per month. Can Mr. Keeley collect tickets at a movie theater? Can he stuff envelopes? Can he be a gas station attendant? Can he be a security guard? You know, the kind that just sits there and watches the video monitor? I swear to God this is type of shit I deal with on a daily basis. Of course, I can avoid this by proving that Mr. Keeley�s depression is bad enough to be a �listed� level impairment, but with Mr. Keeeley showing moderately severe symptoms it would be a very close call and involve a lot of complex medical evidence that the tax experts sitting in Tax Court have no reason to understand.

So we have a choice between the regulations written by the accountants running the IRS who don�t understand real-world mental illness, and the regulations written by the health care administrators running Social Security who don�t understand real world ecconomics.

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