Nichols v. Commissioner

H. Willis Nichols, Jr., Petitioner, v. Commissioner of Internal Revenue, Respondent Nichols v. Commissioner Docket No. 20572 United States Tax Court 13 T.C. 916; 1949 U.S. Tax Ct. LEXIS 17; December 13, 1949, Promulgated *17 Decision will be entered for the respondent. Petitioner, an Army officer, moved his household effects and automobiles from one permanent duty station to another at his own expense. Held, the cost thereof is not an ordinary and necessary business expense within the meaning of section 23 (a) (1) or (2), I. R. C. Leslie A. Meek, Esq., for the petitioner. R. W. Harbert, Jr., Esq., for the respondent. Arnold, Judge. ARNOLD *916 This case involves an income tax deficiency for 1945 in the amount of $ 209.46. The issue is whether section 23 (a) (1) (A) or (a) ( 2), Internal Revenue Code, authorizes petitioner to deduct his expenses in moving his household goods and personal property from California to Kentucky. FINDINGS OF FACT. Petitioner resides in or near Cincinnati, Ohio. His *18 income tax return for the taxable year 1945 was filed with the collector of internal revenue for the first district of Ohio. In February 1942 petitioner was commissioned a first lieutenant in the United States Army Air Forces. He was stationed at Headquarters, A. A. F., Washington, D. C. By October 1942 he had become a major and was transferred to Headquarters, A. A. F., Western Flying Training Command, Santa Ana, California. Government quarters were not available at Santa Ana. Unable to rent furnished quarters, petitioned acquired a house which he furnished and in which he and his family, a wife and two small children, resided. Petitioner's house was approximately twenty miles from his duty station. He used his automobile for transportation, as there was no public transportation available. In September 1944 petitioner was transferred from Santa Ana to Headquarters, A. A. F., Personnel Distribution Command, Atlantic City, New Jersey. His orders required that he proceed immediately to Atlantic City, which he did. Upon arrival there he ascertained that the headquarters of that command was to be moved in the near future to Louisville, Kentucky, or some other city. Pending clarification*19 of this move, petitioner's family, household goods, and personal property remained in California. In January 1945, prior to his assignment to Louisville, petitioner's household effects and two automobiles were shipped from Santa Ana, California, to Lexington, Kentucky. The shipment was consigned *917 to Lexington for the reason that facilities were available there to store the property free of charge. Another reason for the shipment at that time was that petitioner's wife was expecting a baby within three or four months, which made further postponement of the trip across country inadvisable. On or about April 12, 1945, petitioner was ordered to report to Louisville, Kentucky, a permanent station, without change in assignment or duty. No Government quarters were available in Louisville and he obtained quarters for himself and family on a farm about ten miles from his duty station. Petitioner moved his household effects and family from Lexington to his new quarters outside of Louisville. He used his automobile daily for transportation to and from his post of duty, as there was no public transportation available. In the taxable year 1945 petitioner paid the Southern Railroad*20 $ 791.65 for transporting one carload of household goods, including an automobile, and for transporting one automobile by separate shipment, from Santa Ana, California, to Lexington, Kentucky. This amount was net to petitioner after an adjustment of the bill presented. The cost of shipping such property to Louisville instead of Lexington would have been approximately the same. Army regulations in effect at that time permitted petitioner to make one move at Government expense. He did not elect to move from California at Government expense. He remained in Louisville until his services with the Army were terminated in December 1945. Petitioner was not reimbursed by the Army for the $ 791.65 he paid out for moving expenses. On his 1945 return petitioner deducted $ 819.07 as moving expenses, which amount was disallowed by the respondent. Petitioner concedes the correctness of respondent's determination in disallowing moving expenses in excess of $ 791.65. The cost of moving petitioner's household goods and automobiles from California to Kentucky was a personal, living, or family expense, within the meaning of section 24 (a) (1); it was not a deductible expense under section 23 (a)*21 (1) or (2). OPINION. Petitioner contends that an Army officer in time of war is required to go where ordered, and that, if no quarters or transportation are available at his permanent duty stations, the expense of moving his household goods and automobiles from one permanent duty station to another is an ordinary and necessary expense of his business as an Army officer or an ordinary and necessary expense paid out for the production of income. Petitioner relies upon Edwin R. Motch, Jr., 11 T. C. 777; appealed March 11, 1949 (CA-6). *918 In that case we permitted an Army officer to deduct as ordinary and necessary business expenses under section 23 (a) (1) (A) of the code the cost of maintaining and operating an automobile and the cost of entertaining incurred in carrying out his duties of assisting in the efficient distribution of machine tools and keeping in constant contact with manufacturers of production equipment, various Government agencies, and representatives of foreign countries. In that case the automobile expenses resulted from the use of the automobile in connection with his duties, and the entertainment expenses were held to be reasonably*22 necessary in the performance of his duties. It did not involve the cost of moving a taxpayer's household goods and automobiles as an ordinary and necessary business expense. The principle invoked by petitioner is not sustained by the adjudicated cases. In Bercaw v. Commissioner, 165 Fed. (2d) 521, the taxpayer contended that he was "away from home" within the meaning of section 23 (a) (1) (A) during his tour of Army duty and that his expenses incurred thereby, which included officers' mess assessment and janitor services, were traveling expenses. The Fourth Circuit held that taxpayer was engaged in the business of any Army officer, that his place of business was his particular Army post, and that his expenditures for meals and janitor services were personal living expenses and nondeductible under section 24 (a) (1) of the code. To the same effect is York v. Commissioner, 160 Fed. (2d) 385, which relates to a civilian employee of the Government who moved his family from Atlanta, Georgia, to Washington, D. C. See also George B. Lester, 19 B. T. A. 549, and cases there cited. See*23 also Commissioner v. Flowers, 326 U.S. 465, which contrasts section 23 (a) (1) (A) with section 24 (a) (1), disallowing deductions for "personal, living, or family expenses." In the instant case it can not be said that the expense of moving an Army officer's household goods and automobiles from California to Lexington or Louisville, Kentucky, was a necessary incident to the performance of his official duties. Actually, such expense had nothing whatsoever to do with the performance of his official duties. Undoubtedly, the maintenance of his family intact near his post of duty was a source of personal satisfaction to petitioner. It added to his personal and living conveniences. No trade or business exigencies caused him to move his family and possessions to Kentucky. It was his personal, family, and living comforts that brought about the move. The functioning of Headquarters Command at Santa Ana and Louisville was neither aided nor deterred by the presence of petitioner's family, household goods, and automobiles. There is no indication that the Headquarters Command functioned less efficiently at Atlantic City because of the absence of petitioner's*24 family, household goods, *919 and automobiles from September 1944 to April 1945. In our opinion the expenses were personal, family, or living expenses under section 24 (a) (1) of the code, and were not deductible under section 23 (a). Decision will be entered for the respondent.