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[PUBLISH] In the United States Court of Appeals For the Eleventh Circuit
____________________
No. 20-12494 ____________________
CSX CORPORATION, ATLANTIC LAND & IMPROVEMENT COMPANY, CARROLLTON RAILROAD, CHESSIE COMPUTER SERVICES, INC., CSX INTERMODAL TERMINALS, INC., CSX RAIL PAYROLL SERVICES, INC., CSX REAL PROPERTY, INC., CSX TRANSPORTATION, INC., CSX TRANSPORTATION TERMINALS, CYBERNETICS & SERVICES, INC., FRUIT GROWERS DISPATCH, INC., FRUIT GROWERS EXPRESS COMPANY, TOTAL DISTRIBUTION SERVICES, INC., TRANSFLO TERMINAL SERVICES, INC., Plaintiffs-Appellants, USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 2 of 26
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versus UNITED STATES OF AMERICA,
Defendant-Appellee.
Appeal from the United States District Court for the Middle District of Florida D.C. Docket No. 3:15-cv-00427-BJD-JRK ____________________
Before WILLIAM PRYOR, Chief Judge, LAGOA, Circuit Judge, and WATKINS,* District Judge. WILLIAM PRYOR, Chief Judge: This appeal requires us to decide whether relocation bene- fits provided by a railroad to its employees are exempt under the Railroad Retirement Tax Act as “bona fide and necessary expenses incurred [by the employee] . . . in the business of the employer,” 26 U.S.C. § 3231(e)(1)(iii), and if so, what, if any, substantiation re- quirements apply. CSX Corporation appeals a summary judgment in favor of the United States that relocation benefits for its employ- ees, although incurred in the business of the employer, were not
*Honorable W. Keith Watkins, United States District Judge for the Middle District of Alabama, sitting by designation. USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 3 of 26
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adequately substantiated. The United States argues that the bene- fits were not incurred in the business of the employer, but if they were, it requests that we remand to determine which substantia- tion requirements apply. Because the benefits are bona fide and necessary expenses incurred by the employee in CSX’s business and there is no requirement to prove or substantiate anything beyond compliance with the statute, we affirm in part, reverse in part, and remand for the district court to calculate the amount of CSX’s re- fund and to oversee the required notification process. I. BACKGROUND CSX and its various subsidiaries operate a network of rail lines throughout the eastern United States. In so doing, CSX re- quires its employees to move to different locations because of op- erational consolidations, mergers, promotions, and other business- related reasons. CSX chooses to pay for most of the expenses the relocating employee incurs in moving to the new location. CSX provides benefits such as long-term storage, temporary housing, home-sale and purchase costs, a cost-of-living allowance, a monthly stipend for the duration of the move, career assistance for the employee’s spouse, and lease cancellation fees. Some of the re- location benefits are provided in-kind through third parties, and some are provided through monetary payments to cover costs ac- tually or reasonably expected to be incurred by relocating employ- ees. When CSX first provided the benefits, it treated the benefits as taxable compensation under the Railroad Retirement Tax Act. USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 4 of 26
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The Act imposes on the employer and employee a tax calculated as a percentage of the employee’s “compensation.” 26 U.S.C. § 3231(e); see generally id. § 3201 et seq. Section 3231(e) defines compensation as “any form of money remuneration” paid by the employer to the employee “for services rendered.” Id. § 3231(e)(1). The Act is similar to the Federal Insurance Contributions Act, which does not govern railroad companies and their employ- ees. See Wis. Cent. Ltd. v. United States, 138 S. Ct. 2067, 2071–72 (2018). The railroad company collects the employee’s liabilities by deducting income from the employee’s paycheck and then remits both the employee’s and its own portion of the tax to the govern- ment. 26 U.S.C. § 3202(a)–(b). Some payments are exempt from the retirement tax, including “amount[s] paid specifically—either as an advance, as reimbursement or allowance—for traveling or other bona fide and necessary expenses incurred or reasonably expected to be incurred in the business of the employer.” Id. § 3231(e)(1)(iii). In 2009, CSX deducted and paid to the Internal Revenue Ser- vice approximately $1.76 million in taxes for these relocation ben- efits. CSX later decided that these benefits were exempt because they were “advance[s,] . . . reimbursement[s,] or allowance[s] . . . for traveling or other bona fide and necessary expenses” that were “incurred or reasonably expected to be incurred” by its employees “in the business of” CSX. Id. § 3231(e)(1)(iii). The Act limits this ex- emption to payments “identified by the employer either by a sepa- rate payment or by specifically indicating the separate amounts USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 5 of 26
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where both wages and expense reimbursement or allowance are combined in a single payment.” Id. CSX sought a refund of the taxes. After the Service refused, CSX sued for refunds of these and other taxes paid on behalf of itself and its employees. In addition to the taxes on relocation benefits, CSX sought refunds for taxes paid on stock transactions, which CSX claimed were not “money remuneration.” The parties stipulated to the material facts and filed cross- motions for summary judgment. The district court held that cor- porate stock and in-kind relocation benefits were “properly consid- ered” money remuneration by the Treasury Department. And it held that relocation benefits did not fall under the exemption in section 3231(e)(1)(iii) because the exemption covered only those expenses incurred during short-term travel to perform employ- ment duties. During the pendency of an appeal by CSX, the Supreme Court decided that “money remuneration” in the Act did not apply to in-kind benefits, but instead applied only to compensation that is a commonly used “medium of exchange.” Wis. Cent., 138 S. Ct. at 2074. The government conceded on appeal that CSX’s stock transactions were not subject to the Act, but it contested the status of CSX’s relocation benefits. CSX Corp. v. United States, 909 F.3d 366, 368 (11th Cir. 2018) (CSX I ). We agreed that corporate stock was not “money remunera- tion” and reversed the district court on that issue, but we did not USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 6 of 26
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address whether in-kind relocation benefits were “money remu- neration.” Id. at 368–69. On the issue of cash relocation benefits, “we [held] that relocation benefits and moving expenses that com- port with the statutory requirements of [section] 3231(e)(1)(iii) are excluded from taxable compensation under the [Act].” Id. at 369. Because “[w]hether CSX complied with these statutory require- ments [was] outside the scope of [the] decision,” we “remand[ed] for further consideration of the statutory requirements” and refund calculations. Id. In a concurring opinion, Judge Jordan reiterated that “[r]elo- cation benefits . . . fit comfortably within this broad provision [sec- tion 3231(e)(1)(iii)].” Id. at 370 (Jordan, J., concurring). Judge Jordan explained that he disagreed with an interpretation of the same sec- tion in BNSF Railway Co. v. United States, 775 F.3d 743, 758–59 (5th Cir. 2015). In CSX I, the government argued that the Fifth Cir- cuit’s interpretation of section 3231(e)(1)(iii) properly considered section 3231(e)(5)—which exempts all money remuneration if it is reasonable to believe that an employee could deduct that benefit from his income, including certain moving expenses—as a specific limitation on the general exemption and as potentially superfluous under CSX’s interpretation. CSX I, 909 F.3d at 370 (Jordan, J., con- curring). The Fifth Circuit concluded that those considerations constrained the scope of section 3231(e)(1)(iii) to “payments to em- ployees for traveling expenses and bona fide and reasonable ex- penses related to travel.” BNSF Ry., 775 F.3d at 759. USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 7 of 26
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Judge Jordan rejected BNSF Railway’s interpretation for three reasons. First, the text of the statute was unambiguous and required no application of the general-specific or superfluity can- ons: “[t]he terms ‘traveling,’ ‘bona fide,’ and ‘necessary’ may be broad, but they are not vague.” CSX I, 909 F.3d at 371 (Jordan, J., concurring). Second, section 3231(e)(5) was enacted nearly eight years after section 3231(e)(1)(iii), compare Act of Oct. 18, 1976, Pub. L. No. 94-547, § 4(b), 90 Stat. 2526 (section 3231(e)(1)(iii)), with Tax Reform Act of 1984, Pub. L. No. 98-369, § 531(d)(2), 98 Stat. 884 (section 3231(e)(5)), and the cross references in section 3231(e)(5) did not include moving expenses for another nine years, see Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 103- 66, § 13213, 107 Stat. 473–74. So, Judge Jordan reasoned, section 3231(e)(1)(iii) could not have referred to a section—3231(e)(5)— that did not exist at the time of enactment. CSX I, 909 F.3d at 371 (Jordan, J., concurring). And it would be erroneous to assume that Congress later implicitly repealed section 3231(e)(1)(iii) when the two sections did not completely overlap. Id. at 371–72; accord ANTONIN SCALIA & BRYAN A. GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS § 55, at 327 (2012) (“Repeals by implication are . . . very much disfavored. But a provision that flatly contradicts an earlier-enacted provision repeals it.” (internal quotation marks omitted)). Third, by separating the exemption of relocation benefits from deductibility, Congress enabled itself to suspend the deductibility of moving expenses without affecting the exemption of relocation benefits. CSX I, 909 F.3d at 372 (Jordan, J., concurring) (citing Act of Dec. 22, 2017, Pub. L. No. 115-97, USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 8 of 26
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§ 11048, 131 Stat. 2088 (suspending the moving expense deduction for tax years 2018–25)). On remand, the parties again filed cross-motions for sum- mary judgment. The government conceded that in-kind relocation benefits were not “money remuneration.” The parties continued to dispute whether cash relocation benefits were exempt under sec- tion 3231(e)(1)(iii). The district court concluded that most of the relocation benefits provided were for “bona fide and necessary ex- penses incurred or reasonably expected to be incurred in the busi- ness of the employer.” 26 U.S.C. § 3231(e)(1)(iii). But the quick-sale bonuses provided by CSX—an extra amount given to employees who sold their homes quickly—did not fall within the exception. CSX does not challenge this determination on appeal. The district court then addressed whether CSX had substan- tiated these amounts to qualify for the exemption. It rejected CSX’s argument that the only requirement was that the amount be paid in a “separate payment” or that there be a specific indication of “the separate amounts.” See id. Instead, it applied the Accountable Plan Regulation. See 26 C.F.R. § 162-2; id. § 31.3121(a)-3 (incorporating the requirements of the Accountable Plan in section 162-2). Through a general grant to the Secretary of the Treasury to make “all needful rules and regulations for [] enforcement,” 26 U.S.C. § 7805(a), and a cross-reference to section 31.3121(a)-3, 26 C.F.R. § 31.3231(e)-1(a)(5), the district court concluded that the Account- able Plan applied to the amounts at issue. The district court then USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 9 of 26
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ruled that CSX failed to meet regulatory substantiation require- ments in the Accountable Plan. CSX and the government filed a joint motion to issue a final judgment under Federal Rule of Civil Procedure 54(b). The judg- ment could not otherwise become final until CSX had comported with regulatory requirements involving the collection of refunds on the tax paid for in-kind relocation benefits on behalf of its em- ployees—the most relevant of which requires notifying each em- ployee of the refund amount and requesting consent for CSX to collect it on his behalf. See id. § 31.6402(a)-2; Rev. Proc. 2017-28, 2017-14 I.R.B. 1061. The district court agreed that the in-kind relo- cation benefits were separate from the cash relocation benefits and stock transactions. It further concluded that there was “no just rea- son for delay,” FED. R. CIV. P. 54(b), because the potential cost of notifying the employees twice—once for the in-kind relocation benefits and once for the cash relocation benefits—outweighed the small risk of a second appeal about the precise refund amount and notification procedures. The district court issued the final judg- ment for the stock transactions and another for the cash relocation benefits. II. STANDARD OF REVIEW This Court reviews summary judgment orders de novo, “viewing all the evidence and [drawing] all reasonable inferences in favor of the non-moving party.” McKenny v. United States, 973 F.3d 1291, 1296 (11th Cir. 2020). Summary judgment is appropriate when “there is no genuine issue as to any material fact, such that USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 10 of 26
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judgment in favor of one party is appropriate as a matter of law.” Id. (citing FED. R. CIV. P. 56(a)). III. DISCUSSION As a preliminary matter, the parties dispute whether our de- cision in CSX I resolved the two issues in this appeal: whether the moving expenses were incurred in CSX’s business and what, if any, substantiation requirements are applicable. Our mandate rule and the law-of-the-case doctrine bar relitigation of issues resolved ex- plicitly or by necessary implication in an earlier appeal. Norelus v. Denny’s, Inc., 628 F.3d 1270, 1288 (11th Cir. 2010). In CSX I, we remanded “for further consideration of the statutory requirements and the calculation of CSX’s taxable compensation.” 909 F.3d at 369. So, we did not resolve the issues presented in this appeal. We divide our discussion in two parts. First, we explain that the text of section 3231(e)(1)(iii) includes CSX’s relocation benefits because its employees incurred the expenses in their employer’s business. Second, we explain that CSX and its employees do not need to meet any regulatory substantiation requirements. A. Section 3231(e)(1)(iii) Includes Relocation Benefits for Em- ployees Whose Employers Require Them to Move. The parties dispute whether the relocation benefits paid by CSX are for “bona fide and necessary expenses” incurred by the employee “in the business of the employer.” 26 U.S.C. § 3231(e)(1)(iii). CSX argues that the plain language of the Act in- cludes expenses incurred by an employee who relocates at the USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 11 of 26
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behest of his employer. The district court agreed; it reasoned that the expenses were necessary and incurred in good faith “in carrying out the business of the employer, i.e. moving from one area to an- other to perform a job function for CSX.” The government argues that the historical context in which section 3231(e)(1)(iii) was en- acted establishes that Congress intended to tie its meaning to the meanings of another provision in the Internal Revenue Code and of then-existing Treasury Regulations, which exclude the benefits here. We agree with CSX. “[W]e start with the text.” White v. Lemma, 947 F.3d 1373, 1377 (11th Cir. 2020); see also SCALIA & GARNER, supra § 2, at 56 (“The words of a governing text are of paramount concern . . . .”). The text must be interpreted “consistent[ly] with [its] ordinary meaning at the time Congress enacted the statute.” Wis. Cent., 138 S. Ct. at 2070 (alterations adopted) (internal quotation marks omit- ted). The Act exempts certain payments for expenses to employees from taxable compensation: [A]n amount paid specifically—either as an advance, as reimbursement or allowance—for traveling or other bona fide and necessary expenses incurred or reasonably expected to be incurred in the business of the employer provided any such payment is identified by the employer either by a separate payment or by specifically indicating the separate amounts where both wages and expense reimbursement or allowance are combined in a single payment. USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 12 of 26
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26 U.S.C. § 3231(e)(1)(iii). The government does not dispute that the payments by CSX for relocation expenses took the form of “an advance, . . . reimbursement[,] or allowance” or that the payments were properly identified as required by the statute. It argues instead that the relocation benefits paid by CSX were not for “bona fide and necessary expenses” incurred by the employee “in the business of the employer.” Id. The text of the statute is unambiguous. A “bona fide” ex- pense is one incurred in good faith. See Comm’r v. Estate of Sand- ers, 834 F.3d 1269, 1275 (11th Cir. 2016); Bona Fide, BLACK’S LAW DICTIONARY (rev. 4th ed. 1968) (“In or with good faith; . . . without deceit or fraud.”). And in this context, “necessary” does not mean strictly needed but instead means only that “the expense [is] appro- priate and helpful.” Comm’r v. Tellier, 383 U.S. 687, 689 (1966) (in- ternal quotation marks omitted); see also Necessary, BLACK’S LAW DICTIONARY (rev. 4th ed. 1968) (“This word . . . may import abso- lute physical necessity or inevitability, or. . . that which is only con- venient, useful, appropriate, suitable, proper, or conducive to the end sought.”). The payments also correspond to expenses incurred by employees in the business of their employer. We reject the government’s argument that the expenses at issue are personal expenses as opposed to expenses incurred in CSX’s business. When employees are required to travel for busi- ness, expenses for hotels are indisputably incurred in their em- ployer’s business. Hotel expenses are not materially different from moving expenses incurred when employees are required to USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 13 of 26
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relocate for business. CSX’s employees incurred moving expenses at the direction of their employer because CSX required them to relocate to continue their employment. And because incurring those expenses was required to perform services for CSX, the ex- penses were “incurred . . . in the business of [their] employer.” 26 U.S.C. § 3231(e)(1)(iii). As the district court correctly explained, an “employee incurs additional expenses when the employee is asked to relocate.” And although a moving expense might “be a personal expense under some circumstances,” when a relocation is “circum- scribed by company regulations, directives, and conditions, [the moving expense] lose[s] its character as a personal expense and take[s] on the color of a business expense.” Sibla v. Comm’r, 611 F.2d 1260, 1262 (9th Cir. 1980). The government urges us to consider not the plain text but the supposed legislative purpose instead. It argues that the history of the exemption establishes that Congress intended to tie the meaning of section 3231(e)(1)(iii) to the meaning of an income-tax deduction in a separate provision of the Internal Revenue Code, which “allow[s] as a deduction [from taxable income] all the ordi- nary and necessary expenses paid or incurred . . . in carrying on any trade or business.” See 26 U.S.C. § 162(a). Section 162(a) in turn has been interpreted by the Secretary of the Treasury to exclude the moving expenses at issue. See 26 C.F.R. § 1.217-2(a)(1). This argument about “the historical origin” of the tax ex- emption would require us to ignore the plain meaning of section 3231(e)(1)(iii). To the extent that legislative history is useful at all USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 14 of 26
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in statutory interpretation, “we do not consider legislative history when the text is clear. . . . When the words of a statute are unam- biguous, . . . judicial inquiry is complete.” Villarreal v. R.J. Reyn- olds Tobacco Co., 839 F.3d 958, 969 (11th Cir. 2016) (en banc) (in- ternal quotation marks omitted). The government does not argue that the plain language excludes the relocation benefits. See, e.g., CSX I, 909 F.3d at 370 (Jordan, J., concurring) (“The government does not dispute that CSX’s relocation benefits are generally bona fide or necessary.”). In fact, the government mentions the “plain language” in its brief only when it argues that the text of section 3231(e)(1)(iii) mirrors the text of section 162(a), which governs a deduction from income taxes. We decline to “resort to legislative history to cloud a statutory text that is clear.” Villarreal, 839 F.3d at 969 (internal quotation marks omitted). In addition to using legislative history, the government re- lies on the consistent-usage canon, which states that a “word or phrase is presumed to bear the same meaning throughout a text.” SCALIA & GARNER, supra § 25, at 170. The government argues that the textual similarities and history require us to interpret section 3231(e)(1)(iii) the same way the Secretary of the Treasury has in- terpreted section 162(a). But the consistent-usage canon is inappli- cable. The consistent-usage canon applies where the same word or phrase is used in two separate provisions of the same law. Id. § 25, at 170–73. It can also extend to two different statutes when the “timing and purpose” of the two statutes are similar and their text USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 15 of 26
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is “materially indistinguishable.” BNSF Ry. Co. v. Loos, 139 S. Ct. 893, 898–99 (2019); see also SCALIA & GARNER, supra § 25, at 173 (“If [the two distinct statutes were] enacted at the same time, and dealt with the same subject, the argument could even be persua- sive.”). For example, in BNSF Railway Co. v. Loos, the Supreme Court applied the consistent-usage canon to corresponding provi- sions of the Act and the Federal Insurance Contributions Act be- cause the programs were similar in “timing and purpose.” See 139 S. Ct. at 898–99. By contrast, sections 3231(e)(1)(iii) and 162(a)—two differ- ent statutes—were enacted twenty-two years apart. Compare Act of Oct. 18, 1976, Pub. L. No. 94-547 § 4(b), 90 Stat. 2526 (section 3231(e)(1)(iii)), with Internal Revenue Code of 1954, Pub. L. No. 83-591, § 162, 68A Stat. 45–46 (section 162(a)). And the provisions deal with different subjects—section 162(a) provides an income-tax deduction and section 3231(e)(1)(iii) provides an exemption from withholding. See Cent. Ill. Pub. Serv. Co. v. United States, 435 U.S. 21, 29 (1978) (explaining that income-tax withholding “is not the same as . . . subjectability to income taxation”); cf. CSX I, 909 F.3d at 368 (“Congress did not choose to tax [certain benefits under the Act], even though such benefits are taxed elsewhere in the tax code.”). Because section 162(a) is not a retirement withholding pro- vision and was enacted decades before section 3231(e)(1)(iii), the consistent-usage canon does not apply. The government finally argues that in enacting section 3231(e)(1)(iii), Congress “tapped into a well-established regulatory USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 16 of 26
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framework.” Citing Treasury Regulations from 1944 and 1950, the government argues that the nearly identical language in those reg- ulations and section 3231(e)(1)(iii) proves that “Congress essen- tially adopted” the meaning of the regulations. See 26 C.F.R. §§ 31.3401(a)-1(b)(2) (income-tax withholding), 31.3121(a)-1(h) (so- cial security), and 31.3306(b)-1(h) (unemployment tax). The gov- ernment contends that the only major differences in the language of the provisions are that section 3231(e)(1)(iii) adds the word “al- lowance” and omits the word “ordinary.” Because a word or phrase that is “obviously transplanted from another legal source . . . brings the old soil with it,” Hall v. Hall, 138 S. Ct. 1118, 1128 (2018) (internal quotation marks omitted), the government urges us to apply the meaning ascribed to the Treasury Regulations to section 3231(e)(1)(iii) as well. The government’s reliance on the old-soil canon is mis- placed. It is not “obvious[]” that section 3231(e)(1)(iii) was trans- planted from Treasury Regulations applicable to Social Security ex- emptions. See Taggart v. Lorenzen, 139 S. Ct. 1795, 1801 (2019). Recent Supreme Court decisions that have applied this canon in- volved terms that were plainly transplanted to a new legal text. See, e.g., id. (concluding that the power of civil contempt was inherent in the power to issue an injunction because “courts have long im- posed civil contempt sanctions” to enforce injunctions); Stokeling v. United States, 139 S. Ct. 544, 551 (2019) (applying the old-soil canon to the word “force” when retained from one version of the Armed Career Criminal Act to another); Hall, 138 S. Ct. at 1128 USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 17 of 26
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(applying the canon to the word “consolidate” when the Federal Rules of Civil Procedure were “expressly modeled” on their rele- vant predecessor); see also In re Fed. Bureau of Prisons’ Execution Protocol Cases, 955 F.3d 106, 116–17 (D.C. Cir. 2020) (Katsas, J., concurring) (applying the canon to the word “manner” when car- ried over in multiple versions of the statute). Here, in contrast, the Treasury Regulations include the word “ordinary,” but section 3231(e)(1)(iii) does not. See, e.g., 9 Fed. Reg. 14573, 14576 (Dec. 14, 1944) (exempting “[a]mounts paid specifically—either as advances or reimbursements—for traveling or other bona fide ordinary and necessary expenses incurred or reasonably expected to be incurred in the business of the employer” (emphasis added)). And section 3231(e)(1)(iii) includes the word “allowance,” but the Treasury Regulations do not. Because “a material variation in terms suggests a variation in meaning,” SCALIA & GARNER, supra, § 25, at 170, we cannot read the provisions identically under the old-soil canon. See also Wis. Cent., 138 S. Ct. at 2071 (Courts “usually presume differ- ences in language . . . convey differences in meaning.” (internal quotation marks omitted)); cf. Food Mktg. Inst. v. Argus Leader Media, 139 S. Ct. 2356, 2365 (2019) (“Nor will this Court ordinarily imbue statutory terms with a specialized common law meaning when Congress hasn’t itself invoked the common law terms of art associated with that meaning.”). We also reject the government’s interpretation because it excludes all relocation benefits from the scope of section 3231(e)(1)(iii), contrary to both the plain text of the statute and our USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 18 of 26
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earlier decision. In CSX I, we concluded that relocation benefits “that comport with the statutory requirements of [section] 3231(e)(1)(iii) are excluded from taxable compensation under the [Act].” 909 F.3d at 369. Under the law of the case, at least some relocation benefits meet the statutory requirements. Respect for our precedent requires us not to adopt an interpretation of the stat- ute that would effectively neuter our previous holding. See Kon- drat’yev v. City of Pensacola, 949 F.3d 1319, 1335 n.1 (11th Cir. 2020) (Newsom, J., concurring) (“[A] healthy respect for the deci- sions of [our] colleagues . . . counsels a fairly rigorous application of the prior-panel-precedent rule.”). The government recognizes the need to identify at least some relocation benefits that would fall within its proffered inter- pretation. In its view, section 3231(e)(1)(iii) does cover “amounts a railroad describes as ‘relocation benefits’” in at least one circum- stance: A railroad employee works in an office in city A. The rail- road then requires the employee to move to city B, where the em- ployee will work mostly from home. Under the government’s in- terpretation, amounts paid in those circumstances as an advance, reimbursement, or allowance for home-office equipment such as “computer equipment, software programs, a desk and chair, pens and paper, etc.” would count as relocation benefits and would fall within section 3231(e)(1)(iii). This argument fails because these payments and expenses are not “relocation benefits and moving expenses.” CSX I, 909 F.3d at 369. As the government acknowledges, the payments are for USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 19 of 26
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home-office expenses. The government tries to evade this defect by arguing that what is important is what “a railroad [company] describes as ‘relocation benefits.’” But CSX I concluded that some “relocation benefits and moving expenses [can] comport with the statutory requirements,” id., not some benefits that a “rail [com- pany] describes” as a relocation benefit. And if only expenses such as home-office expenses would be exempt, then CSX I would have affirmed the district court because the record conclusively showed that none of CSX’s relocation benefits were home-office expenses. Also fatal to the government’s position, the expenses identi- fied by the government largely do not fall within section 162(a), the meaning of which is purportedly linked to the meaning of section 3231(e)(1)(iii). Besides pens and paper, the other home-office equip- ment has a useful life longer than one year and must be capitalized and deducted over time under other statutory provisions. See 26 U.S.C. §§ 167, 197. So the home-office expenses the government identifies would not even fall within its own interpretation of sec- tion 3231(e)(1)(iii). To be sure, the conclusion here and in CSX I—that reloca- tion benefits and moving expenses fall within section 3231(e)(1)(iii)—conflicts with the decision of the Fifth Circuit in BNSF Railway. See CSX I, 909 F.3d at 370–71 (Jordan, J., concur- ring). But like our colleague, we do not find the Fifth Circuit’s rea- soning persuasive. In BNSF Railway, the district court held that the plain meaning of the text governed and that the expenses need only be “provided for the employees in connection with employee USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 20 of 26
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relocations required by the business of the employer.” 775 F.3d at 758 (internal quotation marks omitted). The Fifth Circuit reversed on the ground that “two statutory interpretation canons”—the general-specific and the rule against superfluities—required a dif- ferent interpretation. Id. at 759. It “conclude[d] that a more reason- able interpretation of [section] 3231(e)(1)(iii)” included only “trav- eling expenses and bona fide and reasonable expenses related to travel.” Id. We disagree. The rule against superfluities only applies when “a provision is susceptible of . . . another meaning” that avoids the superfluity. SCALIA & GARNER, supra, § 26, at 176. The Fifth Circuit did not ex- plain why it disagreed with the conclusion of the district court that the plain meaning included relocation benefits and moving ex- penses. Nor did it explain why the text of section 3231(e)(1)(iii) was susceptible to an interpretation covering only short-term travel ex- penses; it stated only that its reading was a “more reasonable inter- pretation of [section] 3231(e)(1)(iii).” BNSF Ry., 775 F.3d at 759; but see Wis. Cent., 138 S. Ct. at 2074 (rejecting the Seventh Circuit’s reasoning that “it would make good practical sense” to adopt an interpretation that conflicted with the ordinary meaning (internal quotation marks omitted)). We also disagree with the Fifth Circuit’s invocation of the general-specific canon, which only applies when “conflicting provi- sions cannot be reconciled—when the attribution of no permissible meaning can eliminate the conflict.” SCALIA & GARNER, supra, § 28, at 183. There is no conflict between sections 3231(e)(1)(iii) and USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 21 of 26
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(e)(5); “[a]t most, the subsections overlap . . . .” CSX I, 909 F.3d at 372 (Jordan, J., concurring). Section 3231(e)(5) exempts from com- pensation payments that fall within listed sections of the Internal Revenue Code, and each of those sections contains numerous pro- visions. One of the references is to a provision that excludes from income, among other benefits, a “qualified moving expense reim- bursement.” 26 U.S.C. § 132(a)(6), (g). The definition of moving ex- penses in section 132 is narrow and does not include the expenses here. Id. § 132(g); see also id. § 217(b)(1). But the moving expense exemption referenced in section 3231(e)(5) is only one provision of one referenced section, so giving full effect to the ordinary meaning of section 3231(e)(1)(iii) at most limits the usefulness of some of the provisions to which section 3231(e)(5) cross-references. Finally, the government argues that, until recently, no one considered relocation benefits to fall within the exemption pro- vided by section 3231(e)(1)(iii). But “[u]ntil [Congress] exercises [its] power, the people may rely on the original meaning of the written law.” See Wis. Cent., 138 S. Ct. 2074. Because the district court correctly found that the expenses at issue are necessary, “in- curred[] in good faith,” and incurred “in carrying out the business of the employer,” we hold that the payments are covered by the exemption in section 3231(e)(1)(iii). B. Because No Regulatory Substantiation Requirements Ap- ply, CSX Is Entitled to a Refund. The district court concluded that the Accountable Plan Reg- ulation directly applied. It reasoned that the Secretary had the USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 22 of 26
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power to “prescribe all needful rules and regulations” to enforce the provision, 26 U.S.C. § 7805(a), and that it had done so when it directed that “reimbursement and other expense allowance amounts” were subject to the Accountable Plan, see 26 C.F.R. § 31.3231(e)-1(a)(5); id. § 162-2. The district court then concluded that the Accountable Plan was reasonable gap filling under Chev- ron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984), and that CSX failed to satisfy the Accountable Plan’s requirements. CSX argues that the district court erred. It contends that sec- tion 3231(e)(1)(iii) required it only to identify or separate the amounts paid, which it properly did. CSX contends that the statute is so clear on this matter that if additional regulatory substantiation requirements did apply—such as requiring receipts for actual ex- penses incurred from employees—they would be invalid. The government, for its part, does not defend the ruling that the Accountable Plan applies here. As the government concedes, the Accountable Plan applies only to expenses that are deductible under Title VI of the Internal Revenue Code. See 26 C.F.R. § 31.3121(a)-3(a), (b)(1)(ii) (requiring a payment to “meet[] the re- quirements of section . . . 1.62-2” of the Code of Federal Regula- tions); id. § 1.62-2(d)(1) (requiring the expenses to be deductible un- der Title VI). Although some section 3231(e)(1)(iii) expenses are de- ductible under the provisions in Title VI, the moving expenses here are not. Instead, the government argues that the Accountable Plan applies “by analogy” and urges us to remand for the district court USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 23 of 26
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to apply the most demanding substantiation rules in the Accounta- ble Plan. We decline the invitation to invent a regulatory substantia- tion requirement. The government’s concession that the Account- able Plan does not apply dooms its argument. It contends that “there needs to be a mechanism by which expenses are monitored and verified unless the Government is forced to accept at face value any claim that a payment” satisfied the statutory requirements. (In- ternal quotation marks omitted.) In support, the government relies on a House Conference Report for a separate bill, enacted nearly seventeen years after section 3231(e)(1)(iii), that states that income- tax deductibility of employer-paid moving expenses would be gov- erned by rules similar to the rules in the Accountable Plan. H.R. REP. NO. 103-213, at 592 (1993) (Conf. Rep.). The Report, it con- tends, shows “Congress’s stated desire and expectation that the [A]ccountable [P]lan rules would be applied by analogy.” But “[p]ost-enactment legislative history,” which this is, is a “contradic- tion in terms” and “is not a legitimate tool of statutory interpreta- tion.” Bruesewitz v. Wyeth LLC, 562 U.S. 223, 242 (2011); accord Pitch v. United States, 953 F.3d 1226, 1240 (11th Cir. 2020) (en banc). And even taken at face value, the statement does not require this Court to create and apply those rules on our own. At best, the House Report is evidence that some members of Congress (or their staff) thought the Secretary should promulgate similar rules. That the Secretary has not done so is dispositive. USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 24 of 26
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To the extent the government argues that satisfying some additional substantiation requirement is inherently necessary to take advantage of the exemption, that argument too fails. On the government’s own account, the Accountable Plan did not go into effect until July 1, 1990, nearly fourteen years after the enactment of section 3231(e)(1)(iii). See 54 Fed. Reg. 51021-02, 51023 (Dec. 12, 1989). And the section of the Federal Register presenting the pro- posal acknowledged that “before July 1, 1990, no withholding or employment tax liability will attach,” noting that “[o]f course, as under existing regulations, such expenses must be identified either by making a separate payment or by specifically identifying the sep- arate amounts.” Id. The government’s argument that some addi- tional regulatory substantiation rules must attach rings hollow when the Accountable Plan allowed a grace period during which it did not impose any additional substantiation requirements. It is unnecessary to decide whether, as CSX argues, the clar- ity of the identification requirement in section 3231(e)(1)(iii) pre- vents the Treasury from promulgating any regulation imposing ad- ditional requirements, such as regulatory substantiation require- ments. Chevron deference applies only when “Congress delegated authority to the agency generally to make rules carrying the force of law, and the agency interpretation claiming deference was promulgated in the exercise of that authority.” Gonzales v. Ore- gon, 546 U.S. 243, 255–56 (2006) (emphasis added) (internal quota- tion marks omitted). The Supreme Court has explained that the Secretary of the Treasury has the general but “explicit USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 25 of 26
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authorization to prescribe all needful rules and regulations for the enforcement” of the provisions in the Internal Revenue Code. See Mayo Found. For Med. Educ. & Rsch. V. United States, 562 U.S. 44, 57 (2011) (internal quotation marks omitted); 26 U.S.C. § 7805(a). But it is undisputed that the Secretary has not promul- gated any rule or regulation that governs the substantiation of the amounts here. Without a regulatory substantiation rule applicable to the expenses at issue, we need not decide whether any such rule would be consistent with sections 7805(a) and 3231(e)(1)(iii). Regardless of whether an additional regulatory substantiation requirement is consistent with these provisions, CSX prevails, and “we are not in the business of issuing advisory opinions.” United States v. John- son, 921 F.3d 991, 1003 (11th Cir. 2019) (en banc) (alteration adopted) (internal quotation marks omitted). We stated in CSX I that moving expenses must be “substan- tiated in accordance with the statutory requirements.” CSX I, 909 F.3d at 369. But that statement was imprecise because the statute itself does not provide specific substantiation requirements, and that imprecise language understandably confused the parties and the district court. The identification required by the statute is not synonymous with substantiation. See Substantiate, BLACK’S LAW DICTIONARY (11th ed. 2019) (“To establish the existence or truth of (a fact, etc.) . . . .”); Substantiation, 2 BOUVIER LAW DICTIONARY (Desk ed. 2012) (“[T]he process of . . . the proof of a thing in issue by sufficient evidence.” “Substantial proof, or its provision.”). USCA11 Case: 20-12494 Date Filed: 11/10/2021 Page: 26 of 26
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Identification by separate payment or specific indication does not “establish” that the expenses fell within section 3231(e)(1)(iii). The district court understandably read CSX I to require application of some additional substantiation requirements. But there is no appli- cable regulatory requirement for substantiation. And a longstand- ing misinterpretation of section 3231(e)(1)(iii) does not give us li- cense to create one. IV. CONCLUSION We AFFIRM IN PART the summary judgment as it pertains to whether relocation benefits are exempt under section 3231(e)(1)(iii). We REVERSE IN PART the summary judgment as it pertains to CSX’s need and failure to satisfy the Accountable Plan Regulation. And we REMAND to the district court for it to calcu- late the amount of CSX’s refund and administer the notification process.