FINE, J.
¶ 1. Daniel W. Dettwiler appeals the circuit court's order affirming a determination by the Wisconsin Tax Appeals Commission that rejected his contention that he could subtract claimed gambling losses from his reported gambling income on his 2002 Wisconsin tax return. We affirm.
I.
¶ 2. As material, the parties stipulated that Dettwiler "claims that he had income from gambling winnings in the amount of $99,252.60" in 2002, and "further claims that during the year 2002 he had gambling losses in the amount of $41,637." Dettwiler "identified his occupation" on his "2002 U.S. Individual Tax Return" as " 'retired.'"
¶ 3. Dettwfler's contention that he should be able to deduct his gambling losses from his gambling winnings focuses on Wis. Stat. § 71.05(6)(b)5, which permits a taxpayer to subtract from his or her "federal adjusted gross income," which is the starting point for a determination of "Wisconsin adjusted gross income," Wis. Stat. § 71.01(13), "[a]ny amounts that are recoveries of federal itemized deductions for which no tax
benefit was received for Wisconsin purposes." Dettwiler argues that his gambling losses are those "recoveries." The Tax Appeals Commission disagreed and adopted the position set out in what its opinion characterized as "the Instructions for the Wisconsin Form 1 income tax return," which said that "recoveries" means money the taxpayer received in the taxable year that either wholly or partially reimbursed the taxpayer for an earlier expenditure or loss that the taxpayer deducted from his or her federal taxable income, and that Dettwiler's gambling losses did not qualify. The Wisconsin Form 1 Instructions excerpt, as quoted by the Commission, explains that a taxpayer may subtract from his or her Wisconsin adjusted gross income "any amount included as income on your federal tax return that is a recovery of a federal itemized deduction from a prior year for which you did not receive a Wisconsin tax benefit," and gives the following example:
You claimed an itemized deduction on your 2001 federal tax return for a casualty loss of $2,000. You could not claim the casualty loss for the itemized deduction credit on your 2001 Wisconsin income tax return. During 2002 you received a reimbursement of $1,000 from your insurance company for part of the casualty loss. The $1,000 reimbursement is included on your federal tax return as a recovery of an amount previously claimed as an itemized deduction. Because you did not claim the casualty loss for the itemized deduction credit for Wisconsin for 2001, the $1,000 is not taxable to Wisconsin for 2002.
The Commission also pointed to the definition of "recoveries" by the Internal Revenue Service in what the Commission indicates is "I.R.S. Publication 525 (2002)": "A recovery is a return of an amount you
deducted or took a credit for in an earlier year." Dettwiler does not dispute the accuracy of the Commission's quotation from either the Wisconsin Tax Form 1 Instructions or the Internal Revenue Service Publication.
II.
¶ 4. We review the decision of the Tax Appeals Commission and not that of the circuit court.
See Schwartz v. Wisconsin Dep't of Revenue,
2002 WI App 255, ¶ 14, 258 Wis. 2d 112, 122, 653 N.W.2d 150, 155. In reviewing a determination of an administrative agency, we give deference along a gradient that varies with the nature of the agency's expertise and experience.
See UFE Inc. v. Labor & Indus. Review Comm'n,
201 Wis. 2d 274, 284-287, 548 N.W.2d 57, 61-63 (1996) (discussing the three levels of deference: "great weight deference, due weight deference and
de novo
review"). Even though the circuit court gave the Commission's decision "due weight" because this is the first time the Commission applied Wis. Stat. § 71.05(6)(b)5 in a situation like this, and this is the standard of review suggested by the Department of Revenue (Dettwiler does not contend that any particular standard of review should be applied),
see Wisconsin Dep't of Revenue v. Heritage Mut. Ins. Co.,
208 Wis. 2d 582, 588-589, 561 N.W.2d 344, 346-347 (Ct. App. 1997) (due-weight review of first-impression decisions by the Tax Appeals Commission), and we have opined previously that an agency's expertise and the need for uniformity of analysis may warrant the "great weight" standard of review even when the issue is a matter of first impression,
F.M. Mgmt. Co. Ltd. P'ship v. Wisconsin Dep't of Revenue,
2004 WI App 19, ¶ 5,
269 Wis. 2d 526, 533, 674 N.W.2d 922, 926 ("[T]he correct test of whether we give great-weight deference to an agency's legal conclusions is whether the agency has experience in interpreting a particular statutory scheme, not whether it has ruled on precise, or even substantially similar, facts before.") (quoted source and internal quotation marks omitted), the Wisconsin Supreme Court's latest word on the level of deference courts give to an administrative agency requires that our review here must be
de novo
because this is a matter of first impression,
Wisconsin Dep't of Revenue v. River City Refuse Removal, Inc.,
2007 WI 27, ¶ 35, 299 Wis. 2d 561, 580, 729 N.W.2d 396, 405 ("No deference applies when an agency addresses an issue that is clearly one of first impression."). Thus, although the Tax Appeals Commission is a specialized administrative tribunal with the long-standing responsibility and expertise to interpret and apply Wisconsin's tax laws,
see
Wis. Stat. § 73.01(4), we follow
River City Refuse Removal
and review
de novo
the Commission's decision in this case.
¶ 5. Unless there is an ambiguity or constitutional infirmity, we apply statutes as they are written.
State ex rel. Kalal v. Circuit Court,
2004 WI 58, 44, 271 Wis. 2d 633, 662, 681 N.W.2d 110, 123124. Here, the applicable statute, Wis. Stat. § 71.05(6)(b)5, is clear and has two interdependent parts: (1) there must be a "recover[y] of [a] federal itemized deduction[]," (2) "for which no tax benefit was received for Wisconsin purposes." The "tax benefit" rule means that "if an amount deducted from gross income in one taxable year is recoverable in a later year, the recovery is income in the later year."
Schulz v. Wisconsin Dep't of Revenue,
115 Wis. 2d 542, 544, 340 N.W.2d 563, 565 (Ct. App. 1983). Dettwiler's federal-tax deduction for
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FINE, J.
¶ 1. Daniel W. Dettwiler appeals the circuit court's order affirming a determination by the Wisconsin Tax Appeals Commission that rejected his contention that he could subtract claimed gambling losses from his reported gambling income on his 2002 Wisconsin tax return. We affirm.
I.
¶ 2. As material, the parties stipulated that Dettwiler "claims that he had income from gambling winnings in the amount of $99,252.60" in 2002, and "further claims that during the year 2002 he had gambling losses in the amount of $41,637." Dettwiler "identified his occupation" on his "2002 U.S. Individual Tax Return" as " 'retired.'"
¶ 3. Dettwfler's contention that he should be able to deduct his gambling losses from his gambling winnings focuses on Wis. Stat. § 71.05(6)(b)5, which permits a taxpayer to subtract from his or her "federal adjusted gross income," which is the starting point for a determination of "Wisconsin adjusted gross income," Wis. Stat. § 71.01(13), "[a]ny amounts that are recoveries of federal itemized deductions for which no tax
benefit was received for Wisconsin purposes." Dettwiler argues that his gambling losses are those "recoveries." The Tax Appeals Commission disagreed and adopted the position set out in what its opinion characterized as "the Instructions for the Wisconsin Form 1 income tax return," which said that "recoveries" means money the taxpayer received in the taxable year that either wholly or partially reimbursed the taxpayer for an earlier expenditure or loss that the taxpayer deducted from his or her federal taxable income, and that Dettwiler's gambling losses did not qualify. The Wisconsin Form 1 Instructions excerpt, as quoted by the Commission, explains that a taxpayer may subtract from his or her Wisconsin adjusted gross income "any amount included as income on your federal tax return that is a recovery of a federal itemized deduction from a prior year for which you did not receive a Wisconsin tax benefit," and gives the following example:
You claimed an itemized deduction on your 2001 federal tax return for a casualty loss of $2,000. You could not claim the casualty loss for the itemized deduction credit on your 2001 Wisconsin income tax return. During 2002 you received a reimbursement of $1,000 from your insurance company for part of the casualty loss. The $1,000 reimbursement is included on your federal tax return as a recovery of an amount previously claimed as an itemized deduction. Because you did not claim the casualty loss for the itemized deduction credit for Wisconsin for 2001, the $1,000 is not taxable to Wisconsin for 2002.
The Commission also pointed to the definition of "recoveries" by the Internal Revenue Service in what the Commission indicates is "I.R.S. Publication 525 (2002)": "A recovery is a return of an amount you
deducted or took a credit for in an earlier year." Dettwiler does not dispute the accuracy of the Commission's quotation from either the Wisconsin Tax Form 1 Instructions or the Internal Revenue Service Publication.
II.
¶ 4. We review the decision of the Tax Appeals Commission and not that of the circuit court.
See Schwartz v. Wisconsin Dep't of Revenue,
2002 WI App 255, ¶ 14, 258 Wis. 2d 112, 122, 653 N.W.2d 150, 155. In reviewing a determination of an administrative agency, we give deference along a gradient that varies with the nature of the agency's expertise and experience.
See UFE Inc. v. Labor & Indus. Review Comm'n,
201 Wis. 2d 274, 284-287, 548 N.W.2d 57, 61-63 (1996) (discussing the three levels of deference: "great weight deference, due weight deference and
de novo
review"). Even though the circuit court gave the Commission's decision "due weight" because this is the first time the Commission applied Wis. Stat. § 71.05(6)(b)5 in a situation like this, and this is the standard of review suggested by the Department of Revenue (Dettwiler does not contend that any particular standard of review should be applied),
see Wisconsin Dep't of Revenue v. Heritage Mut. Ins. Co.,
208 Wis. 2d 582, 588-589, 561 N.W.2d 344, 346-347 (Ct. App. 1997) (due-weight review of first-impression decisions by the Tax Appeals Commission), and we have opined previously that an agency's expertise and the need for uniformity of analysis may warrant the "great weight" standard of review even when the issue is a matter of first impression,
F.M. Mgmt. Co. Ltd. P'ship v. Wisconsin Dep't of Revenue,
2004 WI App 19, ¶ 5,
269 Wis. 2d 526, 533, 674 N.W.2d 922, 926 ("[T]he correct test of whether we give great-weight deference to an agency's legal conclusions is whether the agency has experience in interpreting a particular statutory scheme, not whether it has ruled on precise, or even substantially similar, facts before.") (quoted source and internal quotation marks omitted), the Wisconsin Supreme Court's latest word on the level of deference courts give to an administrative agency requires that our review here must be
de novo
because this is a matter of first impression,
Wisconsin Dep't of Revenue v. River City Refuse Removal, Inc.,
2007 WI 27, ¶ 35, 299 Wis. 2d 561, 580, 729 N.W.2d 396, 405 ("No deference applies when an agency addresses an issue that is clearly one of first impression."). Thus, although the Tax Appeals Commission is a specialized administrative tribunal with the long-standing responsibility and expertise to interpret and apply Wisconsin's tax laws,
see
Wis. Stat. § 73.01(4), we follow
River City Refuse Removal
and review
de novo
the Commission's decision in this case.
¶ 5. Unless there is an ambiguity or constitutional infirmity, we apply statutes as they are written.
State ex rel. Kalal v. Circuit Court,
2004 WI 58, 44, 271 Wis. 2d 633, 662, 681 N.W.2d 110, 123124. Here, the applicable statute, Wis. Stat. § 71.05(6)(b)5, is clear and has two interdependent parts: (1) there must be a "recover[y] of [a] federal itemized deduction[]," (2) "for which no tax benefit was received for Wisconsin purposes." The "tax benefit" rule means that "if an amount deducted from gross income in one taxable year is recoverable in a later year, the recovery is income in the later year."
Schulz v. Wisconsin Dep't of Revenue,
115 Wis. 2d 542, 544, 340 N.W.2d 563, 565 (Ct. App. 1983). Dettwiler's federal-tax deduction for
his wagering losses to the extent authorized by section 165(d) of the Internal Revenue Code, found at 26 U.S.C. § 165(d), did not give to Dettwiler a Wisconsin "tax benefit."
¶ 6. Effective January 1, 2000, gambling losses were no longer offset against gambling winnings under the Wisconsin tax code because, effective on that date, Wisconsin no longer permitted as a deduction from Wisconsin taxable income " [miscellaneous itemized deductions under the Internal Revenue Code,"
see
Wis. Stat. § 71.07(5)(a)7 (2003-04), one of which, the Department contends and Dettwiler does not dispute, was the deduction for "wagering losses," under section 165(d) of the Internal Revenue Code.
Dettwiler has not shown, and there is nothing in this Record that indicates, that he recovered money attributable to his federal gambling-loss deduction in connection with
something for which he received a Wisconsin tax benefit. His contention that he should nevertheless be permitted to subtract from his Wisconsin taxable in come the offset permitted by section 165(d) of the Internal Revenue Code is not only circular and without merit, but is wholly contrary to the legislature's decision to eliminate such offsets effective January 1, 2000.
¶ 7. The Tax Appeals Commission decision is perfectly logical, appropriate, and correct. Accordingly, we affirm.
By the Court.
— Order affirmed.