Page:BNSF Railway Company v. Michael D. Loos.pdf/6

Rh Retirement Act (RRA), 50 Stat. 307, as restated and amended, 45 U. S. C. §231 et seq., entitles railroad workers to various benefits and prescribes eligibility requirements. The RRA is administered by the Railroad Retirement Board. See §231f(a).

Taxes under the RRTA and benefits under the RRA are measured by the employee’s “compensation.” 26 U. S. C. §§3201, 3221; 45 U. S. C. §231b. The RRTA and RRA separately define “compensation,” but both statutes state that the term means “any form of money remuneration paid to an individual for services rendered as an employee.” 26 U. S. C. §3231(e)(1); 45 U. S. C. §231(h)(1). This language has remained basically unchanged since the RRTA’s enactment in 1937. See Carriers Taxing Act of 1937 (1937 RRTA), §1(e), 50 Stat. 436 (defining “compensation” as “any form of money remuneration earned by an individual for services rendered as an employee”). The RRTA excludes from “compensation” certain types of sick pay and disability pay. See 26 U. S. C. §3231(e)(1), (4)(A).

The IRS’s reading of the word “compensation” as it appears in the RRTA has remained constant. One year after the RRTA’s adoption, the IRS stated that “compensation” is not limited to pay for active service but reaches, as well, pay for periods of absence. See 26 CFR §410.5 (1938). This understanding has governed for more than eight decades. As restated in the current IRS regulations, “[t]he term compensation is not confined to amounts paid for active service, but includes amounts paid for an identifiable period during which the employee is absent from the active service of the employer.” §31.3231(e)–1(a)(3) (2017).