79 T.C. 490">*490 By notice of deficiency dated July 11, 1980, respondent determined deficiencies in petitioner's Federal 79 T.C. 490">*491 income taxes for the taxable years 1977 and 1978 in the amounts of $ 221 and $ 83, respectively. ¹ After concessions, the sole issue for decision is whether certain expenses incurred by petitioner during the years in question constitute child care expenses within the meaning of section 44A, I.R.C. 1954.

1982 U.S. Tax Ct. LEXIS 39">*43 FINDINGS OF FACT

Some of the facts have been stipulated and are so found. The stipulation of facts and exhibits attached thereto are incorporated herein by this reference.

Petitioner Edith W. Zoltan resided in Shaker Heights, Ohio, at the time of filing the petition herein. Petitioner and her husband, Stephen I. Zoltan, filed joint Federal income tax returns with the Office of the Director, Internal Revenue Service. ²

During 1977 and 1978, petitioner was employed as an accountant by a public accounting firm, where she was required to work from 8 a.m. to 5 p.m., 5 days a week. Because she lived approximately 1 hour from her place of employment, petitioner generally left her home at 7 a.m. and returned at 6 in the evening. Thus, her job required her to be away from home for approximately 55 hours per week.

Petitioner's son, Paul Zoltan, was 11 years old in 1977. It is agreed that he is a qualifying individual with respect to whom child care expenses incurred1982 U.S. Tax Ct. LEXIS 39">*44 by petitioner can give rise to a credit pursuant to section 44A. See sec. 44A(c)(1)(A).

On her 1977 income tax return, petitioner calculated that she had incurred $ 1,891 in employment-related expenses with respect to her son. She claimed a credit for child and dependent care expenses in the amount of $ 378. Of the total child care expenses claimed, $ 711 was paid to employ Sally Sadler to care for petitioner's son during the year. Respondent did not dispute the treatment of this amount. The remaining 79 T.C. 490">*492 $ 1,180 was paid to Camp Adanac, a summer camp located in Canada where Paul Zoltan spent 8 weeks. ³ The $ 1,100 summer camp expenses remaining in dispute covered various expenses incurred by Paul Zoltan, including expenses for food, lodging, and tuition. The camp program provided instruction in swimming, archery, and various other activities in an unstructured fashion.

1982 U.S. Tax Ct. LEXIS 39">*45 On her 1978 tax return, petitioner calculated $ 897 in child care expenses; of this, $ 431 was paid to Sally Sadler and was allowed by respondent. Of the remaining $ 466, $ 116 was paid by petitioner to Joseph Katzenstein to cover the cost of a school trip taken by Paul Zoltan from Cleveland, Ohio, to Washington, D.C., during his Easter vacation. Included in the payment of the $ 116 was the cost of transportation and lodging incurred by petitioner's son. The remaining $ 350 was paid by petitioner to her daughter, Jeanne L. Windsor, for taking care of Paul Zoltan during his 8-week stay in France. ⁴1982 U.S. Tax Ct. LEXIS 39">*46 Ms. Windsor, who was 22 years old as of October 1977, was in France on a Fulbright Fellowship during the period in question. ⁵

Petitioner stated that she sent her son to summer camp so that he would be taken care of while he was out of school. Had she not sent him to camp, petitioner would have sought alternative care for her son for her 55-hour-per-week absence from home. Her alternatives included sending him to a 6-hour day camp at a cost of $ 400, plus hiring a housekeeper for the remaining 5 hours per day at approximately $ 3 per hour. 79 T.C. 490">*493 Thus, her total cost under this alternative would have been approximately $ 1,000. ⁶ As a further alternative, petitioner could have hired a full-time housekeeper to care for her child. This would1982 U.S. Tax Ct. LEXIS 39">*47 have cost approximately $ 1,320. ⁷

In his notice of deficiency, respondent disallowed the child care credit for expenses incurred with respect to the summer camp, the trip to Washington, and the trip to France.

OPINION

We must decide whether the disputed expenses incurred by petitioner constitute "employment-related expenses" as defined in section 44A. ⁸Section 44A(c)(2)(A) provides as follows:

SEC. 44A. EXPENSES FOR HOUSEHOLD AND DEPENDENT CARE SERVICES NECESSARY FOR GAINFUL EMPLOYMENT.

(2) Employment-related expenses.

(A) In general. -- The term "employment-related expenses" means amounts paid for the following expenses, but only if such expenses are incurred to enable the taxpayer to be gainfully employed for any period for which there are 1 or more qualifying individuals with respect to the taxpayer: 1982 U.S. Tax Ct. LEXIS 39">*48

(i) expenses for household services, and

(ii) expenses for the care of a qualifying individual.

With respect to all of the expenses in question, the precise issue for our consideration is whether the expenses were incurred to permit petitioner to work, and whether they were incurred for the "care" of petitioner's son within the meaning of section 44A(c)(2)(A)(ii). ⁹

We have no difficulty with the first issue. We accept petitioner's testimony, and so find, that she incurred the expenses at issue in order to permit her to work. We hold that this was her dominant motive.

The issue with respect to "care" is somewhat more difficult. To qualify as "expenses for the care of a qualifying individual" 79 T.C. 490">*494 under section 44A(c)(2)(A), the primary purpose1982 U.S. Tax Ct. LEXIS 39">*49 of the care must have been to assure petitioner's son's well-being and protection. Sec. 1.44A-1(c)(3)(i), Income Tax Regs. The resolution of this issue depends upon the facts and circumstances of the particular case. Sec. 1.44A-1(c)(1)(i), Income Tax Regs. Normally, "amounts paid to provide food, clothing, or education" do not qualify unless they are "incident to and inseparably a part of the care. * * * Thus, for example, the full amount paid to a nursery school in which a qualifying child is enrolled is considered as being for the care of the child, even though the school also furnishes lunch and educational services." Sec. 1.44A-1(c)(3)(i), Income Tax Regs.

Petitioner maintains that the primary reason that she sent her son away to summer camp was to assure his well-being and protection. The summer camp alternative seemed to be the most feasible one available to petitioner. She stated that it would have been difficult to find a full-time housekeeper to care for her son 55 hours a week. Furthermore, such choice would have been more expensive than the cost of summer camp. A second option would have required her to hire someone to care for her child for 5 hours each day and1982 U.S. Tax Ct. LEXIS 39">*50 to send him to a day camp for the other 6. Though this alternative might have proven somewhat less expensive than summer camp, it also would have required petitioner to arrange for child care services before and after day camp and to arrange for the daily transportation of her son to and from day camp and possibly of the hired help to and from work. Moreover, "The manner of providing the care need not be the least expensive alternative available to the taxpayer." Sec. 1.44A-1(c)(3)(ii), Income Tax Regs.

We believe that at least part of the summer camp expense qualifies as "expenses for the care of a qualifying individual." On the facts before us, we fail to find a material distinction between the instant case and example (2) of section 1.44A-1(c)(6), Income Tax Regs., wherein the portion of a taxpayer's cost incurred to send her child to boarding school that represented care qualified as a child care expense. ¹⁰ In the 79 T.C. 490">*495 example, the taxpayer's child had to be placed in a boarding school because the taxpayer's job required her to be away from home before or after normal school hours. This portion of the regulations can be said to be twice blessed, for it qualifies as 1982 U.S. Tax Ct. LEXIS 39">*51 a legislative regulation, sec. 44A(g), and as a beneficiary of subsequent legislative approval. ¹¹ Here, petitioner was forced to choose a full-time summer camp over day camp for the identical reason.

1982 U.S. Tax Ct. LEXIS 39">*52 We find that petitioner's principal purpose in sending her child away to camp was to provide for his well-being and protection. Moreover, the form of care she chose was reasonable under the circumstances, especially in light of the fact that the cost of the summer camp was virtually as inexpensive as any of the various other alternatives from which she had to choose and less expensive than the most obvious alternative.

A question remains, with respect to the summer camp expense, whether an allocable portion of such expense was not incurred for the care of Paul Zoltan and therefore does not qualify under section 44A(c)(2)(A). Section 1.44A-1(c)(5), Income Tax Regs., provides that an allocation must be made between the qualifying and nonqualifying elements of an expenditure.

This issue focuses on the apparent tension between the requirement that expenses be allocated under section 1.44A-1(c)(5), Income Tax Regs., and the rule that expenses that are "incident to and inseparably a part of the care" qualify as employment-related expenses under section 1.44A-1(c)(3)(i), 79 T.C. 490">*496 Income Tax Regs. We find that the summer camp provided minimal educational services (see sec. 1.44A-1(c)(5), 1982 U.S. Tax Ct. LEXIS 39">*53 Income Tax Regs.), and that the food and any recreational services provided to petitioner's son were incident to and inseparably a part of his care. Thus, no allocation is necessary, and the full $ 1,100 qualifies.

In Brown v. Commissioner, 73 T.C. 156">73 T.C. 156 (1979), this Court found that the taxpayer enrolled her son in boarding school to enable her to seek and hold gainful employment. We held that the portion of the boarding school costs allocable to child care rather than to education was deductible under section 214(b)(2), the forerunner to section 44A. In defining "child care" we said, "incidentals that go with providing well-being and protection, such as room, board, and supervision before and after the normal school day, should be deductible." 73 T.C. 156">Brown v. Commissioner, supra at 161. Respondent's allocation with respect to the costs attributable to educational services was sustained due to petitioner's failure of proof. 73 T.C. 156">Brown v. Commissioner, supra at 161. The allocation was made pursuant to the guidelines of section 1.214A-1(c)(3), Income Tax Regs., which is mirrored in section 1.44A-1(c)(3)(i), 1982 U.S. Tax Ct. LEXIS 39">*54 Income Tax Regs.

Unlike the facts in Brown, however, there were no significant educational services provided to petitioner's son at Camp Adanac. ¹² Thus, no allocation with respect to such expenses is required. See sec. 1.44A-1(c)(5), Income Tax Regs.

1982 U.S. Tax Ct. LEXIS 39">*55 As a last resort, respondent contends that petitioner must prorate the expenses to reflect the fact that petitioner only was away from home for employment purposes for a total of 55 hours a week. Thus, respondent would limit qualifying expenses to 55/168, or approximately 33 percent. We disagree. Once the decision was made by petitioner to send her son to camp, she had no choice but to pay for 24-hour care, 7 days a 79 T.C. 490">*497 week. Having found that the dominant motivation behind the decision was to permit petitioner to work, we conclude that the constant care of her son was inseparably part of the type of care giving rise to the qualifying expenses. See sec. 1.44A-1(c)(3)(i), Income Tax Regs. We note that example (2) of section 1.44A-1(c)(6), Income Tax Regs., requires no allocation between the taxpayer's working and nonworking hours where the subject expenses are paid to send the taxpayer's son to boarding school. Nor was such an allocation required by the Court in 73 T.C. 156">Brown v. Commissioner, supra at 161, in the portion of the opinion previously quoted.

In holding that the entire $ 1,100 was properly characterized as an "employment-related expense," 1982 U.S. Tax Ct. LEXIS 39">*56 we are in no sense canonizing summer camp expenses for purposes of section 44A. This decision is specifically limited to the facts and circumstances before us.

The second expense at issue is the $ 116 expense incurred by petitioner to send her son on a school trip to Washington, D.C., during the week of his Easter vacation. Again, we find that this trip was primarily undertaken for the son's well-being and protection. We note that the cost of a housekeeper for the week in question would have exceeded the cost of the trip. ¹³

Expenses incurred for transportation are subject to the disqualification provisions of section 1.44A-1(c)(3)(i), Income Tax Regs., which in pertinent part provides:

Expenses incurred for transportation of a qualifying individual * * * between the taxpayer's household and a place outside the taxpayer's household where services for the care of the qualifying individual are provided are not incurred for the care of a qualifying1982 U.S. Tax Ct. LEXIS 39">*57 individual.

We are of the opinion that the expenses incurred for the transportation of petitioner's son to Washington are not disqualified by this language. The cost of transportation from petitioner's home to the place of departure is the type of expense that this language excludes. The care of Paul Zoltan commenced at that point. The transportation by bus to Washington began after petitioner's son was placed under the care of the supervisors of the expedition. This transportation was inseparably tied to that care and does not fit within the 79 T.C. 490">*498 disallowance provisions of section 1.44A-1(c)(4), Income Tax Regs.¹⁴

1982 U.S. Tax Ct. LEXIS 39">*58 We believe, however, that a substantial portion of the expense incurred by petitioner to send her son to Washington, D.C., constituted an educational expense of the type subject to allocation pursuant to section 1.44A-1(c)(3)(i) and section 1.44A-1(c)(5), Income Tax Regs. Petitioner has made no effort to bifurcate the cost of the D.C. trip between educational services and care services. Relying upon his assertion that petitioner was not motivated by a concern for her son's well-being and protection, respondent also failed to suggest an allocation between the competing services. Therefore, it is left to us to estimate the proper allocation. Convinced that petitioner incurred expenses attributable to care services, we apply the rule of Cohan v. Commissioner, 39 F.2d 540">39 F.2d 540 (2d Cir. 1930). Bearing heavily against the taxpayer, "whose inexactitude is of [her] own making," 39 F.2d 540">Cohan v. Commissioner, supra at 544, we find that petitioner incurred care-related expenses in the amount of $ 35 as a consequence of her son's Washington, D.C., trip. Accordingly, this amount qualifies as an "employment-related expense" within the meaning1982 U.S. Tax Ct. LEXIS 39">*59 of section 44A(c)(2)(A)(ii).

To summarize, when the characterization of an expense is challenged under section 44A(c)(2)(A)(ii), the issue is resolved by reference to the specific facts at hand; the Court must ascertain the taxpayer's motive. If the disputed expense was incurred with the dominant purpose of permitting the taxpayer to be gainfully employed and to assure the child's well-being and protection while the taxpayer is so employed, it qualifies as employment-related despite the existence of other incidental benefits. A parent is not prohibited from choosing child care that carries incidental benefits so long as the moving force behind the decision is the desire to assure the protection and well-being of the child. Here, we have made a factual finding, in the case of both the summer camp and the Washington trip, that petitioner's primary concern was the 79 T.C. 490">*499 care of her child. Any incidental services provided to her child at summer camp were inextricably tied to the child care services. With respect to the Washington trip, the expenses attributable to educational services must be carved out of the otherwise qualifying expense since these services were substantial1982 U.S. Tax Ct. LEXIS 39">*60 and were not incidental to, or inseparably a part of, the care-related services.

Finally, we must determine whether the $ 350 paid to petitioner's daughter to take care of her younger brother qualifies under section 44A(c)(2)(A). The qualification of payments to related individuals is limited by section 44A(f)(6), which provided during the years in question as follows: ¹⁵

Sec. 44A(f). Special Rules. -- For purposes of this section --

* * * *

(6) Payments to related individuals. --

(A) In general. -- Except as provided in subparagraph (B), no credit shall be allowed under subsection (a) for any amount paid by the taxpayer to an individual bearing a relationship to the taxpayer described in paragraphs (1) through (8) of section 152(a) (relating to definition of dependent) or to a dependent described in paragraph (9) of such section.

(B) Exception. -- Subparagraph (A) shall not apply to any amount paid by the taxpayer to an individual with respect to whom, for the taxable year of the taxpayer in which the service is performed, neither the taxpayer nor his spouse is entitled to a deduction under section 151(e) (relating to deduction for personal exemptions for dependents), 1982 U.S. Tax Ct. LEXIS 39">*61 but only if the service with respect to which such amount is paid constitutes employment within the meaning of section 3121(b).

Since petitioner's daughter bears a relationship to petitioner described in section 152(a)(1), the expenses paid to her do not qualify unless the exception as provided in section 44A(f)(6)(B) applies. In order for the exception to apply, the services with respect to which the $ 350 was paid must constitute employment within the meaning of section 3121(b). Although petitioner does not run afoul of section 3121(b)(3), ¹⁶1982 U.S. Tax Ct. LEXIS 39">*63 we must deny the 79 T.C. 490">*500 characterization of the $ 350 as an employment-related expense because petitioner has failed to prove that her daughter was an "employee." See the flush language of section 3121(b), which provides in pertinent part: "For purposes of this chapter, the term 'employment' means any service, of whatever nature, performed * * * (B) outside the United States by a citizen of the United States as an employee for an American employer." The term "employee" is defined in section 3121(d)(2) to include "any individual who, under the usual common law rules applicable in determining the employee-employer relationship, has the1982 U.S. Tax Ct. LEXIS 39">*62 status of an employee." Petitioner has presented no proof with respect to the measure of control she exerted over her daughter during her son's visit. The facts are clear that petitioner did not withhold any employment taxes from the payments made to her daughter. See secs. 3101, 3102, 3111. Because petitioner has failed to prove that she satisfied the second test of section 44A(f)(6)(B), the $ 350 paid to her daughter during 1978 is not includable in "employment-related expenses" under section 44A(c)(2)(A)(ii). ¹⁷Welch v. Helvering, 290 U.S. 111">290 U.S. 111 (1933); Rule 142(a), Tax Court Rules of Practice and Procedure.Because we find that the $ 350 is disqualified by section 44A(f)(6)(B), we need not address respondent's other challenges to this expenditure.

Accordingly,

Decision will be entered under Rule 155.