1952 U.S. Tax Ct. LEXIS 281">*281
During the taxable year 1946, petitioner was an employee and his principal place of employment was in Memphis, Tennessee. Approximately half of the services petitioner rendered his employer were performed in Memphis, and the other half were performed in other localities.
1952 U.S. Tax Ct. LEXIS 281">*282 17 T.C. 1261">*1261 The Commissioner has determined a deficiency of $ 152.28 in petitioner's income tax for the year 1946. Petitioner's 1946 income tax return was not presented as evidence, but it appears from data attached to the deficiency notice that the following income and deductions were reported on his return:
| Adjusted gross income | $ 5,639.67 | |
| Less deductions: | ||
| (a) Medical | $ 90.00 | |
| (b) Traveling expenses | 1,040.00 | |
| (c) Other deductions | 157.50 | 1,287.50 |
| Net income | $ 4,352.17 | |
| Tax per return | $ 256.91 |
1952 U.S. Tax Ct. LEXIS 281">*283 In the notice of deficiency respondent made the following determination:
| Adjusted gross income | $ 5,639.67 |
| Optional standard deduction | 500.00 |
| Net income as corrected | $ 5,139.67 |
| 1946 income tax, as corrected | $ 409.19 |
| Tax assessed per return | 256.91 |
| 1946 Tax deficiency | $ 152.28 |
Respondent disallowed the $ 1,040 deduction claimed by petitioner as traveling expenses on the grounds that they were personal expenses. Respondent also determined that the $ 90 medical expenses claimed by petitioner were not allowable, relying on section 23 (x) of the Code.
17 T.C. 1261">*1262 The remaining deductions claimed by petitioner amounting to $ 157.50 were not specifically disallowed by respondent, but in lieu thereof respondent allowed an optional standard deduction of $ 500.
Petitioner contests the determination, contending that respondent erred in disallowing the deduction of $ 1,040 for traveling expenses.
FINDINGS OF FACT.
The petitioner Harold R. Johnson filed his income tax return for the year 1946 with the collector for the district of Tennessee. During all the year 1946, and prior thereto, petitioner's residence was in Statesville, Tennessee.
During the taxable year petitioner was employed1952 U.S. Tax Ct. LEXIS 281">*284 as a master mechanic by Foster and Creighton, general contractors. Petitioner maintained the construction equipment of his employer, and during the taxable year about 50 per cent of the services rendered by petitioner were performed in his employer's temporary garage in Memphis. Most of the equipment maintained by petitioner was located within 125 to 150 miles of Memphis. Petitioner received his orders from the Nashville office of his employer, and after each assignment petitioner returned to work at the Memphis garage until he was ordered by his employer to repair equipment located on construction jobs at other places. About 50 per cent of petitioner's time in the service of his employer was spent away from Memphis.
Petitioner received a salary of approximately $ 100 per week from his employer. Petitioner traveled in an automobile furnished by his employer, but he was not reimbursed by his employer for the cost of his meals and lodging while in Memphis or away from Memphis. Generally, during the year petitioner spent his weekends with his wife and children in Statesville. Petitioner has lived in Statesville during his entire life and during the taxable year his family lived1952 U.S. Tax Ct. LEXIS 281">*285 there in a house rented by petitioner. Petitioner during 1946 rented a room in Memphis about 50 per cent of the time, since Statesville, Wilson County, Tennessee, was over 230 miles from petitioner's principal place of employment.
Petitioner kept no records for himself of his expenditures for meals and lodging during the taxable year. Petitioner estimated that he spent $ 20 per week during 1946 for meals and lodging.
During the year 1946, petitioner had a home and for tax purposes it was in Memphis, Tennessee.
In connection with the performance of services as an employee petitioner during the taxable year spent $ 500 for meals and lodging while traveling away from home.
17 T.C. 1261">*1263 OPINION.
The decision in this case is controlled by the facts, and after we have found within the meaning of the applicable provisions of the Code that petitioner, an employee, had a home, and that his home was in Memphis, Tennessee, little remains for our consideration here.
Respondent disallowed petitioner's deduction of $ 1,040 for traveling expenses on the ground that they were personal expenses, and in so doing relied on
(a) General Rule. -- In computing net income no deduction shall in any case be allowed in respect of -- (1) Personal, living, or family expenses, except extraordinary medical expenses deductible under section 23 (x);
Respondent also would rely on
Hence, the evidence is not sufficient to justify any of petitioner's expenditures involved as traveling expenses while away from home in pursuit of a trade or business; his home being, so far as the record shows, wherever a particular show he managed happened to be. The traveling expenses, therefore, were personal expenses and not deductible.
Those cases are not controlling here, however, for the evidence establishes that during the taxable year petitioner had a home. See
Traveling expenses, in order to qualify as a deduction, must, among other things, have been incurred while away from home,
The meaning of the word "home" in § 23 (a) (1) (A) with reference to a taxpayer residing in one city and working in another has engendered much difficulty and litigation. 4 Mertens, Law of Federal Income Taxation (1942) § 25.82. The Tax Court and the administrative rulings have consistently defined it as the equivalent of the taxpayer's place of business. * * *
Since the opinion in
Petitioner considered his home as being in Statesville where his wife and children resided during the taxable year. Petitioner estimated that he incurred traveling expenses consisting of meals and lodging in the amount of $ 1,040 during 1946 while away from Statesville. On his tax return petitioner deducted this sum which was computed on the basis of $ 20 per week for 52 weeks during the year. After this deduction was disallowed in its entirety by respondent, the1952 U.S. Tax Ct. LEXIS 281">*289 deductions remaining on petitioner's tax return totaled only $ 247.50, including the medical deduction of $ 90. Under these circumstances it was more advantageous to petitioner in computing his 1946 income tax liability to make use of the optional standard deduction, and in the deficiency notice respondent computed petitioner's net income, subtracting $ 500 for the optional standard deduction. As we shall see, in view of the facts as we find them to be, with respect to the optional standard deduction, the circumstances remain unchanged; therefore that part of respondent's determination is not disturbed.
The optional standard deduction is a deduction from
SEC. 22. GROSS INCOME.
* * * *
(n) Definition of "Adjusted Gross Income". -- As used in this chapter the term "adjusted gross income" means the gross income minus --
* * * *
(2) Expenses of travel and lodging in connection with employment. -- The deductions allowed by section 23 which consist of expenses of travel, meals, and lodging while away from home, paid or incurred by the taxpayer in connection with the performance by him of services as an employee;
The optional standard deduction, section 23 (aa) of the Code, is not in lieu of the deduction provided for under sections 22 (n) (2) and 23 (a) (1) (A) of the Code.
1952 U.S. Tax Ct. LEXIS 281">*291 Petitioner estimated that during 1946 his expenditures each week for meals and lodging were $ 20, and he further estimated that he worked for his employer about 26 weeks in Memphis and about 26 weeks away from Memphis. We have determined that petitioner's home was in Memphis. After considering these facts and estimates, and based upon the rule in
| Adjusted gross income before deduction for travel | $ 5,639.67 |
| Deduction for traveling expenses | 500.00 |
| Adjusted gross income | $ 5,139.67 |
| Optional standard deduction | 500.00 |
| Net income | $ 4,639.67 |
Petitioner's income tax liability for the year 1946 is to be computed accordingly.
1. Internal Revenue Code.
SEC. 23. DEDUCTIONS FROM GROSS INCOME.
* * * *
(aa) Optional Standard Deduction for Individuals. --
* * * *
(2) In lieu of certain deductions and credits. -- The standard deduction shall be in lieu of: (A) all deductions other than those which under section 22 (n) are to be subtracted from gross income in computing adjusted gross income, (B) all credits with respect to taxes of foreign countries and possessions of the United States, (C) all credits with respect to taxes withheld at the source under section 143 (a) (relating to interest on tax-free covenant bonds), and (D) all credits against net income with respect to interest on certain obligations of the United States and Government corporations of the character specified in section 25 (a) (1) and (2).↩
