OPINION
PER CURIAM:
This case was referred to Trial Commissioner Mastín G. White with directions to make findings of fact and recommendation for conclusions of law under the order of reference and Rule 134(h). The commissioner has done so in an opinion and report filed on August 17, 1970. On September 18, 1970, the court granted a joint motion to consolidate this case and No. 392-67 (Humble Oil & Refining Company v. United States, Ct.Cl., 442 F.2d 1362, a case in which Trial Commissioner Lloyd Fletcher had filed an opinion and report on June 5, 1970) for further proceedings. On October 17, 1970, defendant filed a supplemental brief on consolidation and exceptions to the commissioners’ reports. The cases have been submitted to the court on oral argument of counsel and the briefs of the parties.
Since the court agrees with the commissioner’s opinion, findings and recommended conclusion of law, as hereinafter set forth, it hereby adopts the same as [1354]*1354the basis for its judgment in this case
OPINION OF COMMISSIONER
WHITE, Commissioner: This is an action to recover the amount of a tax deficiency, plus interest, which the Internal Revenue Service assessed against, and collected from, the plaintiff for the year 1961. The assessment of the deficiency was based upon a determination by the IRS that the plaintiff should have withheld taxes on a total of $278,233.34 which the plaintiff paid out during 1961 in order to defray certain moving expenses of employees who were transferred by the plaintiff from Shreveport, Louisiana, to Houston, Texas.
The Internal Revenue Service, in assessing the deficiency mentioned in the preceding paragraph, purported to act under the authority of Sections 3402 and 3403 of the Internal Revenue Code of 1954 (26 U.S.C. §§ 3402, 3403 (1958)). Section 3402 provided in 1961 that every employer “making payment of wages” should deduct and withhold “upon such wages” a tax computed at the rate of 18 percent (after taking an employee’s exemptions into account). Section 3403 declared that “The employer shall be liable for the payment of the tax required to be deducted and withheld * *
Therefore, the basic question to be decided in this case is whether the $278,-233.34 which the plaintiff expended during 1961 in defraying certain moving expenses of its employees constituted “wages,” within the meaning of that term as used in Section 3402 of the 1954 Code, so as to impose on the plaintiff the statutory duty to withhold taxes “upon such wages” at the prescribed rate of 18 percent, or become liable for its failure to do so.
It is my opinion that this question should be answered in the negative; that the Internal Revenue Service acted erroneously in holding that the expenditures involved here were “wages”; and, accordingly, that the plaintiff is entitled to recover in the present action.
The plaintiff is a Delaware corporation and a wholly owned subsidiary of Humble Oil & Refining Company. The principal business of the plaintiff is the common carrier transportation of crude petroleum and its products by pipeline.
Prior to 1961, the plaintiff maintained its headquarters office in Shreveport, Louisiana. Approximately 200 persons were employed by the plaintiff in the Shreveport headquarters office. As a result of a corporate reorganization, the plaintiff decided to move its main office in 1961 from Shreveport to Houston, Texas, and thereafter to retain in Shreveport an area office employing approximately 10 people. Except for the 10 employees who were to remain in Shreveport for the purpose of staffing the plaintiff’s area office there, the plaintiff wanted to move the entire headquarters personnel from Shreveport to Houston, along with the work, so that the plaintiff would have experienced people in Houston to carry on its operations there after the transfer of the headquarters office to Houston.
In connection with the planning for the transfer of its headquarters office from Shreveport to Houston, the plaintiff sought information from other companies in Shreveport, and also from its parent corporation, Humble Oil & Refining Company in Houston, as to what their respective practices were with respect to paying the moving expenses of employees whom they asked to move from one location to another. The plaintiff learned that there existed among the companies surveyed a general pattern pursuant to which such compa[1355]*1355nies defrayed what they considered to be the ordinary moving expenses of any employee who moved from one location to another at the request of the employing company.
After making the survey referred to in the preceding paragraph, the plaintiff prepared and distributed among its personnel in Shreveport a document that set out the policy which the plaintiff would follow in defraying the moving expenses of employees who moved from Shreveport to Houston at the request of the plaintiff. In this policy statement, the plaintiff declared that, it would defray moving expenses falling within the following categories:
(a) expenses incurred by employees in transporting themselves, their immediate families, their household goods, and their personal effects to Houston;
(b) expenses incurred by employees in connection with the sale of residences owned by them in Shreveport (such expenses to include costs involved in preparing residences for sale, advertising costs, brokers’ commissions, deed costs, mortgage prepayment penalties, and closing costs);
(c) an amount equal to 75 percent of the “loss” sustained by any employee who sold his home in Shreveport for a price less than its appraised value (provided the employee placed his house for sale on multiple listing, or with two or more brokers, and then was unable to sell the house for as much as its appraised value);
(d) expenses incurred by employees in connection with the purchase of residences in Houston (such expenses to include the cost of house-hunting trips to Houston, interest for 6 months on down-payment loans, costs involved in obtaining credit reports, survey costs, costs involved in obtaining mortgages, title insurance costs, escrow fees, closing costs, and recording fees); and
(e) other miscellaneous expenses of a reasonable nature (such as, for example, living expenses in a Houston hotel or motel for a maximum period of 30 days while awaiting the availability of an apartment or house in Houston).
As stated earlier in this opinion, there were approximately 200 persons employed in the Shreveport headquarters office of the plaintiff at the time when it was decided to transfer the headquarters office from Shreveport to Houston. Except for approximately 10 employees who were to remain in Shreveport for the purpose of staffing an area office which the plaintiff expected to maintain there, all the persons employed in the Shreveport headquarters office were asked by the plaintiff to move to Houston, along with the work.
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OPINION
PER CURIAM:
This case was referred to Trial Commissioner Mastín G. White with directions to make findings of fact and recommendation for conclusions of law under the order of reference and Rule 134(h). The commissioner has done so in an opinion and report filed on August 17, 1970. On September 18, 1970, the court granted a joint motion to consolidate this case and No. 392-67 (Humble Oil & Refining Company v. United States, Ct.Cl., 442 F.2d 1362, a case in which Trial Commissioner Lloyd Fletcher had filed an opinion and report on June 5, 1970) for further proceedings. On October 17, 1970, defendant filed a supplemental brief on consolidation and exceptions to the commissioners’ reports. The cases have been submitted to the court on oral argument of counsel and the briefs of the parties.
Since the court agrees with the commissioner’s opinion, findings and recommended conclusion of law, as hereinafter set forth, it hereby adopts the same as [1354]*1354the basis for its judgment in this case
OPINION OF COMMISSIONER
WHITE, Commissioner: This is an action to recover the amount of a tax deficiency, plus interest, which the Internal Revenue Service assessed against, and collected from, the plaintiff for the year 1961. The assessment of the deficiency was based upon a determination by the IRS that the plaintiff should have withheld taxes on a total of $278,233.34 which the plaintiff paid out during 1961 in order to defray certain moving expenses of employees who were transferred by the plaintiff from Shreveport, Louisiana, to Houston, Texas.
The Internal Revenue Service, in assessing the deficiency mentioned in the preceding paragraph, purported to act under the authority of Sections 3402 and 3403 of the Internal Revenue Code of 1954 (26 U.S.C. §§ 3402, 3403 (1958)). Section 3402 provided in 1961 that every employer “making payment of wages” should deduct and withhold “upon such wages” a tax computed at the rate of 18 percent (after taking an employee’s exemptions into account). Section 3403 declared that “The employer shall be liable for the payment of the tax required to be deducted and withheld * *
Therefore, the basic question to be decided in this case is whether the $278,-233.34 which the plaintiff expended during 1961 in defraying certain moving expenses of its employees constituted “wages,” within the meaning of that term as used in Section 3402 of the 1954 Code, so as to impose on the plaintiff the statutory duty to withhold taxes “upon such wages” at the prescribed rate of 18 percent, or become liable for its failure to do so.
It is my opinion that this question should be answered in the negative; that the Internal Revenue Service acted erroneously in holding that the expenditures involved here were “wages”; and, accordingly, that the plaintiff is entitled to recover in the present action.
The plaintiff is a Delaware corporation and a wholly owned subsidiary of Humble Oil & Refining Company. The principal business of the plaintiff is the common carrier transportation of crude petroleum and its products by pipeline.
Prior to 1961, the plaintiff maintained its headquarters office in Shreveport, Louisiana. Approximately 200 persons were employed by the plaintiff in the Shreveport headquarters office. As a result of a corporate reorganization, the plaintiff decided to move its main office in 1961 from Shreveport to Houston, Texas, and thereafter to retain in Shreveport an area office employing approximately 10 people. Except for the 10 employees who were to remain in Shreveport for the purpose of staffing the plaintiff’s area office there, the plaintiff wanted to move the entire headquarters personnel from Shreveport to Houston, along with the work, so that the plaintiff would have experienced people in Houston to carry on its operations there after the transfer of the headquarters office to Houston.
In connection with the planning for the transfer of its headquarters office from Shreveport to Houston, the plaintiff sought information from other companies in Shreveport, and also from its parent corporation, Humble Oil & Refining Company in Houston, as to what their respective practices were with respect to paying the moving expenses of employees whom they asked to move from one location to another. The plaintiff learned that there existed among the companies surveyed a general pattern pursuant to which such compa[1355]*1355nies defrayed what they considered to be the ordinary moving expenses of any employee who moved from one location to another at the request of the employing company.
After making the survey referred to in the preceding paragraph, the plaintiff prepared and distributed among its personnel in Shreveport a document that set out the policy which the plaintiff would follow in defraying the moving expenses of employees who moved from Shreveport to Houston at the request of the plaintiff. In this policy statement, the plaintiff declared that, it would defray moving expenses falling within the following categories:
(a) expenses incurred by employees in transporting themselves, their immediate families, their household goods, and their personal effects to Houston;
(b) expenses incurred by employees in connection with the sale of residences owned by them in Shreveport (such expenses to include costs involved in preparing residences for sale, advertising costs, brokers’ commissions, deed costs, mortgage prepayment penalties, and closing costs);
(c) an amount equal to 75 percent of the “loss” sustained by any employee who sold his home in Shreveport for a price less than its appraised value (provided the employee placed his house for sale on multiple listing, or with two or more brokers, and then was unable to sell the house for as much as its appraised value);
(d) expenses incurred by employees in connection with the purchase of residences in Houston (such expenses to include the cost of house-hunting trips to Houston, interest for 6 months on down-payment loans, costs involved in obtaining credit reports, survey costs, costs involved in obtaining mortgages, title insurance costs, escrow fees, closing costs, and recording fees); and
(e) other miscellaneous expenses of a reasonable nature (such as, for example, living expenses in a Houston hotel or motel for a maximum period of 30 days while awaiting the availability of an apartment or house in Houston).
As stated earlier in this opinion, there were approximately 200 persons employed in the Shreveport headquarters office of the plaintiff at the time when it was decided to transfer the headquarters office from Shreveport to Houston. Except for approximately 10 employees who were to remain in Shreveport for the purpose of staffing an area office which the plaintiff expected to maintain there, all the persons employed in the Shreveport headquarters office were asked by the plaintiff to move to Houston, along with the work. Approximately 130 employees did move to Houston at the plaintiff’s request. However, approximately 60 employees declined to leave Shreveport, and quit the plaintiff’s employment rather than move to Houston. Of the 60 (approximately) employees in the group last mentioned, about half of them were married women whose husbands worked in Shreveport, and the other half were employees who were in their 60’s and who elected to take early retirement rather than move from Shreveport.
In moving approximately 130 employees and their families from Shreveport to Houston, the plaintiff defrayed moving costs that totaled $406,495.65. Of this total, the sum of $128,262.31 represented category (a) costs, as previously described in this opinion (i. e., the so-called “direct” costs involved in transporting the employees, their immediate families, their household goods, and their personal effects to Houston). The moving expenses in categories (b), (c), (d), and (e) aggregated $278,233.-34.
The tax deficiency involved in the present case was assessed against the plaintiff by the Internal Revenue Service with respect to the outlay of $278,-233.34 — and not with respect to the outlay of $128,262.31 — mentioned in the preceding paragraph. Thus, only the so-called “indirect” costs involved in moving the plaintiff’s employees from Shreveport to Houston (i. e., expenses [1356]*1356incurred by employees in connection with the sale of their Shreveport residences, 75 percent of the “losses” sustained by employees in selling Shreveport residences at less than the appraised valuations, expenses incurred by employees in connection with the purchase of residences in Houston, and other expenses of a miscellaneous nature incurred by employees in connection with the move to Houston) are before the court for consideration in the present litigation. The problem is to determine whether the plaintiff was required by Section 3402 of the Internal Revenue Code of 1954 to withhold taxes upon the amounts which it paid out in defraying such “indirect” costs.
It should be made clear that the court does not have before it in this case the question of whether the plaintiff’s actions in defraying the “indirect” moving costs of its employees conferred an economic benefit upon the employees, so as to make it necessary for the individual employees to report as income the respective amounts which the plaintiff expended on their “indirect” moving costs. Cf. Ritter v. United States, 393 F.2d 823, 829-830, 183 Ct.Cl. 875, 885 (1968), cert.l denied, 393 U.S. 844, 89 S.Ct. 127, 21 L.Ed.2d 115 (1968). Rather, the question now before the court is whether the plaintiff, in defraying the “indirect” moving costs of its employees, was paying wages to such employees. The plaintiff, as an employer, was required by Section 3402 of the 1954 Code to withhold taxes only upon amounts paid out as wages.
The term “wages” has a much narrower meaning than the term “income,” because wages are merely one form of income. The term “wages” was defined by statute in 1961 to mean “all remuneration * * * for services performed by an employee for his employer, including the cash value of all remuneration paid in any medium other than cash •x- * *» (26 U.S.C. § 3401(a) (1958); emphasis supplied).
It is my opinion that when the plaintiff defrayed the moving costs of its employees (irrespective of whether such costs were “direct” or “indirect”), the plaintiff was not remunerating or paying the employees for services performed.
In the first place, it was the plaintiff’s policy to fix wages and salaries in relation to the value of the services performed by different employees, whereas the amount expended by the plaintiff on the moving costs of a particular employee was not based upon, and was unrelated to, the value of the services performed by the employee for the plaintiff. Such amount was determined wholly by other factors — e. g., the size of the employee’s family, whether the employee moved a large or a small amount of household goods from Shreveport to Houston, whether the employee received a good price or a poor price for his Shreveport home in relation to its appraised value, whether the employee’s access to a satisfactory apartment or house in Houston was prompt or delayed, etc.
Furthermore, the transfer of employees from Shreveport to Houston was the result of a business decision by the plaintiff (or its parent corporation) that the corporate interests of the plaintiff would be served to better advantage by transferring its headquarters office from Shreveport to Houston. The employees who moved from Shreveport to Houston did so because the plaintiff, for its own business purposes, was transferring their jobs to Houston, and they went along at the plaintiff’s request in order to continue doing the plaintiff’s work. Thus, the amounts which the plaintiff expended in defraying the moving costs of its employees were, “from plaintiff’s point of view as an employer, expenditures incurred to advance its own wholly legitimate and bona fide business purposes.” Peoples Life Insurance Co. v. United States, 373 F.2d 924, 929, 179 Ct.Cl. 318, 327 (1967). It follows that, in paying out amounts to defray its employees’ moving costs, the plaintiff was not compensating or other[1357]*1357wise rewarding the employees for services rendered by them.
For the reasons previously stated, the Internal Revenue Service was not justified in assessing a deficiency, plus interest, against the plaintiff because of the latter’s failure to withhold taxes on the $278,233.34 which the plaintiff expended in defraying the “indirect” moving costs of employees who moved from Shreveport to Houston in 1961 at the plaintiff’s request. Accordingly, the plaintiff is entitled to recover in the present action.
Prior to the trial, the parties agreed, with the approval of the commissioner, that the trial would be limited to the issue of the defendant’s liability, and that the amount of the plaintiff’s recovery (if any) should be determined in subsequent proceedings under Rule 131(c).
The opinion of DAVIS, Judge, dissenting in part and concurring in part, follows the opinion of Trial Commissioner White which has been adopted by the court.