Hammond v. Commissioner

Arthur B. Hammond, Petitioner, v. Commissioner of Internal Revenue, Respondent Hammond v. Commissioner Docket Nos. 34659, 35764 United States Tax Court 20 T.C. 285; 1953 U.S. Tax Ct. LEXIS 176; April 30, 1953, Promulgated *176 Decisions will be entered for the respondent. Where husband and wife are each separately employed in different cities for an indefinite time, the expenses incurred by each spouse for food and lodging at his respective place of employment are personal and living expenses and are not deductible as traveling expenses under section 23 (a) (1) (A) of the Internal Revenue Code. J. Barnwell Phelps, Esq., for the petitioner. Merl B. Peek, Esq., for the respondent. Arundell, Judge. ARUNDELL *285 The respondent has determined that deficiencies exist in petitioner's income taxes for the years 1944, 1945, 1946, and 1947 in the amounts of $ 136.82, $ 140.13, $ 137.45, and $ 126.21, respectively. The deficiencies arise from the disallowance by the respondent of certain deductions claimed by petitioner as traveling expenses within the meaning of section 23 (a) (1) (A) of the Internal Revenue Code. The proceedings were consolidated for hearing and opinion. FINDINGS OF FACT. Arthur B. Hammond, hereinafter referred to as the petitioner, and his wife, Hilda Phelps Hammond, maintained their matrimonial domicile and residence in New Orleans, Louisiana, throughout the entire period*177 involved in these proceedings. The income tax returns in question were filed with the collector of internal revenue for the district of Louisiana at New Orleans. Four children born of the marriage were reared and supported by petitioner at the residence in New Orleans. Two of the children were living there during the period under consideration. The marriage was a Louisiana marriage, a community of acquets and gains existing between petitioner and his wife comprising a common fund into which went the entire earnings of both husband and wife and from which all community expenses were paid, including those disallowed in these proceedings. From 1940 to 1948, petitioner, a duly qualified and licensed attorney-at-law in the State of Louisiana, served in the appointive public office of general counsel to the Louisiana State Department of Highways, with his post of duty at Baton Rouge, Louisiana. The appointment as general counsel to the Highway Department was not for a fixed term but, on the contrary, was subject to termination at the will of either party. During the period here involved, the petitioner, because of his duties at the office of the Highway Department *286 in Baton*178 Rouge, Louisiana, was required to spend 5 days each week in that city except when such duties required him to appear before the courts of Louisiana, public bodies, and other agencies located elsewhere. Petitioner was reimbursed by the State of Louisiana for expenses incurred while traveling away from Baton Rouge in pursuit of the business of his employer. He made no claim for reimbursement of expenses while on trips to New Orleans even though at times he transacted business there for the Highway Department. In his income tax returns for the years 1944 to 1947, inclusive, petitioner deducted as traveling expenses the amounts of $ 600, $ 600, $ 655, and $ 600, respectively, those sums representing his estimate of one-half of the amount expended by him in Baton Rouge for room rent, food, and incidentals. 1 During the period involved, petitioner's wife, Hilda Phelps Hammond, was a radio commentator, lecturer, *179 and writer in New Orleans, from which activities she derived compensation reported as income in her tax returns and those of petitioner. The nature of her work required her presence in New Orleans. At no time during the period under consideration did the petitioner contribute services to the radio, lecture, or writing activities of Hilda Phelps Hammond, nor did she contribute services to the business of petitioner as general counsel to the State Highway Department. Petitioner and his wife filed separate income tax returns for the years in question, each reporting one-half of the total income earned by both and each deducting therefrom one-half of the petitioner's expenses in Baton Rouge. Maintenance of petitioner's residence in New Orleans required expenditures estimated by petitioner at no less than $ 400 per month from the common community fund for rent, light, heat, telephone, and servants. OPINION. The basic issue in this case is the deductibility of petitioner's expenses for food and lodging in Baton Rouge, Louisiana, in which city he was principally employed. It is petitioner's primary contention that those expenses constituted traveling expenses while away from home in*180 the pursuit of a trade or business within the meaning of section 23 (a) (1) (A) of the Internal Revenue Code. We are of the opinion that the decision of the Supreme Court in Commissioner v. Flowers, 326 U.S. 465, must control here. As we understand that decision, expenditures for meals and lodging at the taxpayer's place of principal employment must be considered personal and living expenses which are made expressly nondeductible under *287 section 24 (a) (1) of the Internal Revenue Code, even though the taxpayer for reasons of his own maintains a permanent residence elsewhere. In that case, the taxpayer's permanent residence was in Jackson, Mississippi, while the railroad company employing him as an attorney maintained its principal offices at Mobile, Alabama. The Supreme Court said (p. 473): The facts demonstrate clearly that the expenses were not incurred in the pursuit of the business of the taxpayer's employer, the railroad. Jackson was his regular home. Had his post of duty been in that city the cost of maintaining his home there and of commuting or driving to work concededly would be non-deductible living and personal expenses lacking*181 the necessary direct relation to the prosecution of the business. The character of such expenses is unaltered by the circumstance that the taxpayer's post of duty was in Mobile, thereby increasing the costs of transportation, food and lodging. Whether he maintained one abode or two, whether he traveled three blocks or three hundred miles to work, the nature of these expenditures remained the same. This language is equally applicable to the case at bar. The fact that petitioner chose to maintain a permanent residence at a place away from the city where he was regularly employed does not serve to permit the deduction of his living expenses at his place of employment any more than it did in the case of Flowers. Petitioner's expenses were clearly not deductible and respondent properly disallowed them. See also York v. Commissioner, 160 F. 2d 385. Petitioner argues in the alternative that if Baton Rouge is to be treated as the place of abode for tax purposes, then Hilda Phelps Hammond while employed in New Orleans should be regarded as away from home and thus entitled to deduct her board and lodging there. If petitioner's contention is correct, *182 it follows that under the community property laws of Louisiana he would be entitled to deduct in his returns one-half of her allowable expenses. We find no merit in the contention. Under the principle of the Flowers case Hilda Phelps Hammond would not be entitled to her personal living expenses such as board and room while at her principal place of business in New Orleans. The provisions of Louisiana law cited by petitioner to the effect that a married woman has no other domicile than that of her husband has no bearing on the question before us. We are not dealing with questions of domicile but, rather, with the principal place of employment of the taxpayer and the deductibility of living expenses at such place of work. Petitioner relies heavily on the case of Wallace v. Commissioner, 144 F. 2d 407, wherein the Circuit Court of Appeals for the Ninth Circuit found deductible the food and lodging expenses of a motion picture actress while working in Hollywood, California. The taxpayer's relations with Hollywood were, in the words of the court, "casual, professional and temporary." That case is obviously distinguishable from the case at bar, *183 since petitioner's employment and *288 that of Hilda Phelps Hammond were concededly for an indefinite period and had continued for several years. Petitioner further contends that the factual situation herein is analogous to that of an individual taxpayer who is engaged in two businesses requiring him to spend substantial amounts of time in different cities. He bases this contention on the "partnership of acquets and gains" established under the community property laws. We think the inaccuracy of the analogy is apparent. Petitioner concededly contributed nothing to Hilda Phelps Hammond's business in New Orleans, nor did she in any way assist in his work for the State Highway Department in Baton Rouge. Neither was ever required to leave his respective principal place of employment in pursuit of the business in the other city. Respondent properly disallowed the deductions and the deficiencies must stand. Decisions will be entered for the respondent. Footnotes 1. An identical amount representing the other one-half of his expenses was claimed in Mrs. Hammond's returns.↩