Comm'r of Internal Revenue

Tax Court of the United States.Apr 29, 1949
12 T.C. 656 (U.S.T.C. 1949)
12 T.C. 656T.C.

Docket No. 15352.



W. W. Sullivan, Esq., for the petitioners. Elmer L. Corbin, Esq., for the respondent.

Expenses for meals and lodging at petitioner's post of duty in Texas, where he worked about 330 days in the taxable year, held not deductible as traveling expenses, notwithstanding petitioner maintained his family residence in Iowa, and was engaged there the remainder of the year in other businesses from which he received almost half of his combined salaries. Ney v. United States (C.C.A., 8th Cir.), 171 Fed.(2d) 449, followed. W. W. Sullivan, Esq., for the petitioners. Elmer L. Corbin, Esq., for the respondent.

By this proceeding petitioners challenge respondent's determination of a deficiency in income tax for the year 1944 in the amount of $429.43. The deficiency resulted from respondent's determination that traveling expenses in the amount of $1247.25 were not allowable deductions.


Petitioners, husband and wife, filed a joint Federal income tax return for the year 1944 with the collector of internal revenue, district of Iowa.

For about 25 years preceding the taxable year, petitioner Robert F. Green, hereinafter called petitioner, lived in Sutherland, Iowa. In 1936 he became a partner in Sutherland Creamery Co., with a one-eighth interest. The other partners were petitioner's father and two Jensens, who were also father and son. During most of the year 1943 petitioner and the younger Jensen supervised operations of the creamery, while the two older partners were only semiactive and spent much time in California and at leisure.

In November 1943 petitioner and the younger Jensen began employment at Uvalde, Texas, with Hangar Six, Inc., as flight instructors. At that time the two older partners agreed to operate the creamery during the absence of the two younger partners. The agreement among the partners was that the employment at Uvalde would be temporary, and that the younger partners would return to Sutherland to assist in the creamery operation at any time upon notice.

Hangar Six was incorporated for the purpose of contracting with the United States Army to train Air Corps cadets until such time as the Army was able to meet its own training needs. Petitioner's employment as flight instructor was subject to termination by either party without prior notice. Petitioner's intention was to work at Uvalde only until Hangar Six completed its flight training program for the Army, which he believed would not extend beyond six months. The employment was not temporary, but was of indeterminate or indefinite duration, and continued until June 1945, when Hangar Six ceased operations. Thereafter petitioner returned to Sutherland, where he now lives.

During the year 1944 petitioner continued to maintain a residence at Sutherland, occupied by his wife, petitioner Harriet L. Green, and their two minor children. In the same year he voted at Sutherland and maintained his membership in a Sutherland church, lodge, library board, and in Iowa Creamery Operators.

During the year 1944 petitioner was vice president and a director of Security State Bank in Sutherland. In that capacity he had an office in the bank building.

During the year 1944 petitioner spent about 330 days at Uvalde, which was the place of his ‘main employment,‘ and about 35 days at Sutherland. At the conclusion of each 10-week period of flight instruction, petitioner had vacations of from 3 to 7 days. The above 35 days at Sutherland were divided into 4 trips of from 7 to 10 days each, which were made at the conclusion of the above 10-week intervals and included the vacation periods. Petitioner made the trips from Uvalde to Sutherland and back to Uvalde by commercial airline at a round trip cost of $122, and a total cost of $488 for the 4 round trips. The flying time required for the trips, which were made primarily at night, was relatively short.

Of the 35 days at Sutherland in the year 1944, petitioner spent the equivalent of about 2 or 3 days working at Security State Bank, and spent the remaining time working at the creamery. Other work during the year 1944 for both the bank and the creamery was carried on by petitioner by correspondence from Uvalde.

During the year 1944 petitioner and the younger Jensen had rooms in Uvalde about three and one-half miles from Hangar Six flying field. They each had one-half interest in an automobile which was used about three-fifths for transportation between the lodgings and flying field and about two-fifths for pleasure. The total expense of maintaining the automobile during the year 1944 was $307.50, including fuel, repairs, depreciation, license, insurance, and stamp. During the same year petitioner spent $660 for meals at Uvalde and $495 rent for his rooms there.

During the year 1944 petitioner received for his services $3,624.50 from Hangar Six; $2,400 from Sutherland Creamery; and $660 from Security State Bank. His other income for that year consisted of $3,831.51 representing his one-eighth share of creamery profits, and $900 representing bank dividends.

In their return for the taxable year, petitioners claimed aggregate deductions of $1,735.25 for ‘Traveling Expenses.‘ Of the above deductions, $1247.25 represented petitioner's personal living expenses incurred by reason of his employment at Uvalde, and was comprised of amounts expended at Uvalde for meals ($660), room rent ($495), and transportation between rooms and flying field ($92.25, being one-half of three-fifths of $307.50, the total automobile expenses described above). Petitioner excluded the $1,247.25 from his Hangar Six salary, and reported the difference, $2,395.25, as income. The remaining deductions, in the amount of $488, represented the total cost of the four round trips by airline between Uvalde and Sutherland. Petitioner excluded the $488 from his creamery salary, and reported the difference, $1,912, as income. In the return petitioner explained the action in claiming the above deductions as follows:

During the year of 1944 my main employment was with Hangar Six Inc. Garner Field, Uvalde, Texas. * * * This work has made it necessary for me to be in Texas, away from my business my residence and my family. Said business (Sutherland Creamery Co.) and residence have been maintained during my absence, and I consider my expense in Texas as a legally deductible expense. The item of car expense is reported as one half of the total in that it has been incurred (sic) in a partnership with another instructor.

In interest of my connection with the Sutherland Creamery I have made four trips to Sutherland, Iowa and return to Uvalde, Texas and consider them a deductible expense.

In his notice of deficiency respondent allowed the deduction of $488, but disallowed the deduction of $1,247.25, because ‘your living and travel expenses incurred while employed at Uvalde, Texas, are not an allowable deduction from gross income.‘

In the alternative, respondent has pleaded in his answer that:

(e) Should the petitioners prevail in their contention that the item of $1,247.25 representing the expenses while away from Sutherland, Iowa, in Uvalde, Texas, should be allowed, then the item of $488.00 representing the expense while away from Uvalde, Texas, in Sutherland, Iowa, should be disallowed.


OPPER, Judge:

We can not distinguish this proceeding in any particular from Ney v. United States (Dist. Ct., Ark.), 77 Fed.Supp. 1005; affd. (C.C.A., 8th Cir.), 171 Fed.(2d) 449. As in that case petitioner spent all but a few days of the year in employment away from what he contends was his ‘home,‘ although he received a considerable portion of his income from services performed at the latter place. In both cases respondent allowed a deduction representing the cost of actual transportation, but the issue is his disallowance of the claimed item of meals and lodging at the place where petitioner spent the greater part of his time. Petitioner himself characterizes this as his ‘main employment,‘ and the record demonstrates that, as in S.M.R. O'Hara, 6 T.C. 841, he ‘was free to devote to‘ his other activities only his ‘leisure time.‘ In the Ney case, deduction of living expenses at what amounted to the taxpayer's principal post of duty was not permitted. Whether a further amount would have been allowed for board and lodging for the few days spent at the taxpayer's original ‘home,‘ had they been claimed and proved, can not be ascertained from the record in that case, but consideration of the question is unnecessary, since claim and proof are equally absent here. On the authority of that case, the principal issue must be decided in respondent's favor. See also S.M.R. O'Hara, supra; York v. Commissioner (App.D.C.), 160 Fed.(2d) 385.

The expenses of petitioner's automobile used to transport him between his place of abode and his business are likewise not deductible. E. C. O'Rear, 28 B.T.A. 698; affd. (C.C.A., 6th Cir.), 80 Fed.(2d) 473; Frank H. Sullivan, 1 B.T.A. 93.

Decision will be entered for the respondent.