People v Roberts, unpublished order of the Court of Appeals, entered September 15, 2017 (Docket No. 337938).
This case arises from a dispute between defendant and his neighbors, Kathleen Cilc and Frantz Jensen. Cilc stated that in July 2014, she and her husband, Jensen, were concerned that defendant had not mowed the grass on an easement along his property, and that her husband mowed the easement to help defendant. She stated that she believed that defendant felt slighted after her husband mowed the grass, and that defendant became more upset when the police visited defendant about the easement's uncut grass. Defendant then engaged in a progressively escalating course of harassment. In July 2014, defendant put food and fruit near the property line, attracting seagulls and yellow jackets. In September 2014, defendant left steak bones, banana peelings, and cucumbers in his yard, which Cilc averred blew into her yard. In September 2014, defendant mowed his lawn and positioned the lawnmower's chute to blow dust and dirt toward Cilc's chairs, which were covered with wet paint. Between September 2014 and into November 2014, defendant beamed flashlights into Cilc and Jensen's home. Cilc testified that in the beginning of December 2014, defendant placed his underwear and other pieces of clothing about his property. Jensen testified that in December 2014, defendant dressed in military garb and marched along the edge of his property line. Cilc testified that on December 24, 2014, defendant threw ice cubes at her home after dark. Jensen complained that on January 5, 2015, there were "loud noises coming from outside that were shaking . . . rattling pictures inside of his house. . . ." Cilc testified that on January 19, 2015, defendant flashed laser lights into her home. Both Cilc and a police officer testified that a video recording from Cilc and Jensen's home surveillance system showed the lights coming from defendant's window on January 19, 2015.
Defendant was charged in two separate district court files. In the first case, he was charged with stalking Cilc and Jensen from July 15, 2014, to January 2, 2015. In the second case, he was charged with aggravated stalking based on conduct from July 15, 2014, to January 19, 2015; however, the charge was later reduced to misdemeanor stalking. After being convicted of both misdemeanor stalking charges, defendant requested a Ginther hearing, alleging that his trial counsel was ineffective. The district court held a Ginther hearing and concluded that trial counsel did not provide deficient representation. Defendant filed an appeal in the circuit court, and that court affirmed defendant's convictions and denied that defendant received ineffective assistance of counsel at trial. This appeal followed.
Defendant raises two claims of ineffective assistance of counsel on appeal. First, defendant contends that trial counsel was ineffective by failing to object to the admission of the video surveillance evidence. Second, defendant argues that trial counsel was ineffective for failing to object to the second charge of stalking, or for failing to move for a directed verdict with respect to that charge, as the second charge violated principles of double jeopardy. We disagree.
"Whether a defendant has been denied the effective assistance of counsel is a mixed question of fact and constitutional law." People v Solloway, 316 Mich App 174, 187; 891 NW2d 255 (2016). Generally, a trial court's findings of fact, if any, are reviewed for clear error, and questions of law are reviewed de novo. Id. at 188. "Clear error exists if the reviewing court is left with a definite and firm conviction that the trial court made a mistake." People v Armstrong, 490 Mich 281, 289; 806 NW2d 676 (2011).
Effective assistance of counsel is presumed, and criminal defendants have a heavy burden of proving otherwise. People v Schrauben, 314 Mich App 181, 190; 886 NW2d 173 (2016). When claiming ineffective assistance of counsel, it is a defendant's burden to prove "(1) counsel's performance was deficient, meaning that it fell below an objective standard of reasonableness, and (2) but for counsel's error, there is a reasonable probability that the outcome of the defendant's trial would have been different." Solloway, 316 Mich App at 188, citing Strickland v Washington, 466 US 668, 687; 104 S Ct 2052; 80 L Ed 2d 674 (1984). A defendant must show that "but for counsel's deficient performance, a different result would have been reasonably probable." Armstrong, 490 Mich at 290, citing Strickland, 466 US at 694-696. This Court will not substitute its judgment for that of counsel regarding matters of trial strategy. People v Payne, 285 Mich App 181, 190; 774 NW2d 714 (2009). "[D]efendant has the burden of establishing the factual predicate for his claim of ineffective assistance of counsel[.]" People v Hoag, 460 Mich 1, 6; 594 NW2d 57 (1999).
Defendant first argues that his trial counsel was ineffective for not objecting to the admission of video evidence collected by Cilc and Jensen's home surveillance system. Defendant avers that he has a reasonable expectation of privacy in his backyard, that a warrantless search of that area is unconstitutional, and that Cilc and Jensen should have obtained a warrant before videotaping his property. He argues that the surveillance constituted a search within the scope of the Fourth Amendment, and that because Cilc and Jensen did not obtain a warrant to conduct surveillance on his home, the use of videotaped evidence to convict him constituted a violation of his Fourth Amendment rights. We disagree.
When presented with similar arguments at defendant's Ginther hearing, the district court found that the evidence was not obtained illegally and that defendant and trial counsel had agreed that its introduction was part of their defense strategy. On appeal to the circuit court, the circuit court concluded:
the argument that defendant was subject to an illegal search and seizure based on allegations that the complainants were acting as governmental agents by installing video cameras fails as there is nothing in the record to indicate that the complainants acted as governmental agents or at their direction.
"The right against unreasonable searches . . . is guaranteed by both the United States Constitution and the Michigan Constitution." People v Taylor, 253 Mich App 399, 403; 655 NW2d 291 (2002), citing US Const, Am IV; Const 1963, art 1, § 11 (other citations omitted). "Not all searches, however, implicate the Fourth Amendment." Taylor, 253 Mich App at 404. The constitutional protections against unreasonable searches and seizures apply only to governmental conduct that can reasonably be characterized as a "search." People v Frohriep, 247 Mich App 692, 699; 637 NW2d 562 (2001). One seeking the benefit of the constitutional protections carries the burden of showing that they apply. People v Nash, 418 Mich 196, 204; 341 NW2d 439 (1983).
The initial inquiry in any search and seizure analysis is whether there was a search. People v Brooks, 405 Mich 225, 242; 274 NW2d 430 (1979). Not all intrusions constitute searches. Nash, 418 Mich at 204. Intrusions are not searches in the constitutional sense if not conducted by the government or those working on behalf of the government. See, e.g., People v Perlos, 170 Mich App 75, 83; 428 NW2d 685 (1988), rev'd on other grounds 436 Mich 305 (1990). A search—even an unreasonable one—conducted by a private person not acting as an agent of the government or with the participation or knowledge of any governmental official is not subject to constitutional limitations. People v McKendrick, 188 Mich App 128, 141; 468 NW2d 903 (1991).
Cilc and Jensen were acting as private citizens when they installed and used a home surveillance system on their property. Cilc testified that she and Jensen installed a video surveillance system to deter defendant from continuing his harassing behaviors; the surveillance system was not installed to collect evidence that may have been useful in a criminal prosecution. Moreover, the cameras were not pointed directly at defendant's home. Cilc testified that the cameras were situated such that they recorded her property and parts of defendant's property. Regardless, defendant has failed to establish Cilc and Jensen as government agents rather than private citizens, despite defendant's contention that his neighbors acted as police agents when they conducted the video surveillance at the behest of the Fairhaven Chief of Police Chester Kowalski, a governmental official. Defendant additionally notes that Cilc testified that she and her husband felt that they needed to install the cameras in order to prove that defendant was the one causing the disturbances. In support of his position, defendant cites to McKendrick, 188 Mich App at 142-143, where this Court stated:
Defendant also argues that Cilc and Jensen needed to obtain a search warrant to incidentally record his property while surveilling their own. However, defendant has provided no authority to support his position. "An appellant may not merely announce his position and leave it to this Court to discover and rationalize the basis for his claims, nor may he give only cursory treatment with little or no citation of supporting authority." People v Henry, 315 Mich App 130, 148; 889 NW2d 1 (2016) (quotation marks and citation omitted). "The appellant himself must first adequately prime the pump; only then does the appellate well begin to flow. Failure to brief a question on appeal is tantamount to abandoning it." Id. at 148-149 (quotation marks and citation omitted). Accordingly, we conclude this issue to be abandoned and decline to address it. --------
To determine whether a given search is the type proscribed by the Fourth Amendment, two initial factors must be shown. First, the police must have instigated, encouraged, or participated in the search. Second, the individual must have engaged in the search with the intent of assisting the police in their investigative efforts. A person will not be deemed a police agent merely because there was some antecedent contact between that person and the police . . . .
Admittedly, the evidence conflicts as to whether Kowalski knew of Cilc and Jensen's video surveillance while the system was being utilized. Huron County Sheriff Deputy Ryan Neumann testified that "Jensen said he was advised by the Fairhaven Chief [of Police] to put up surveillance cameras on the exterior of his home to capture evidence of the neighbor harassing him." However, Kowalski denied that he asked Cilc and Jensen to surveil defendant for the purpose of gathering evidence, and he indicated that he learned about the existence of videos and pictures of defendant when Cilc and Jensen gave him the evidence. Moreover, even assuming that Kowalski advised Cilc and Jensen to install surveillance cameras to capture evidence of defendant's conduct, defendant cites no evidence that Cilc and Jensen did so with the "intent of assisting the police in their investigative efforts," McKendrick, 188 Mich App at 143; rather, it appears that they did so with the intent of assisting themselves in their own efforts to prove to the police that defendant was harassing them. And even if they did so at Kowalski's suggestion, "[a] person will not be deemed a police agent merely because there was some antecedent contact between that person and the police . . . ." Id.
Further, defendant cannot establish that he was denied the effective assistance of counsel with respect to the video evidence. At the Ginther hearing below, trial counsel testified that she discussed consenting to the introduction of video evidence with defendant, and he agreed to do so because he felt that the videos showed that he was the one being stalked by his neighbors - not the other way around. On appeal, defendant does not contest that he agreed to admit this evidence as a matter of trial strategy. Accordingly, he has waived any appellate argument that counsel acted unreasonably in failing to object to its admission. Further, this Court does not second-guess trial counsel on matters of trial strategy, nor does it assess counsel's competence with the benefit of hindsight. People v Horn, 279 Mich App 31, 39; 755 NW2d 212 (2008).
Defendant next argues that his trial counsel was ineffective for failing to move to dismiss his second stalking charge, and by not moving for a directed verdict, because the charge violated the constitutional prohibition against double jeopardy and was supported by insufficient evidence. We disagree.
"Stalking" is defined as "a willful course of conduct involving repeated or continuing harassment of another individual that would cause a reasonable person to feel terrorized, frightened, intimidated, threatened, harassed, or molested and that actually causes the victim to feel terrorized, frightened, intimidated, threatened, harassed, or molested." MCL 750.411h(1)(d). " 'Course of conduct' means a pattern of conduct composed of a series of 2 or more separate noncontinuous acts evidencing a continuity of purpose." MCL 750.411(1)(a). "Harassment" is "conduct directed toward a victim that includes, but is not limited to, repeated or continuing unconsented contact that would cause a reasonable individual to suffer emotional distress and that actually causes the victim to suffer emotional distress." MCL 750.411h(1)(c).
Both the United States and Michigan Constitutions prohibit placing a defendant twice in jeopardy for a single offense. US Const, Am V; Const 1963, art 1, § 15; People v Ream, 481 Mich 223, 227; 750 NW2d 536 (2008). These guarantees protect a defendant against both successive prosecutions for the same offense and multiple punishments for the same offense. People v Gibbs, 299 Mich App 473, 489; 830 NW2d 821 (2013).
Defendant argues that using an incident from prior to January 2, 2015 (i.e., acts that could support a conviction on the first stalking charge) as the "first independent act" vis-à-vis the second stalking charge, together with a "second independent act" from either January 5, 2015 or January 19, 2015 (i.e., acts that could support a conviction on the second charge), is impermissible. This contention is misguided. When a defendant continues a prohibited course of conduct, prosecutors may use "prior" conduct used to convict defendant on a previous charge of stalking, in combination with a "new" independent act, to convict defendant on a "new" second charge of stalking. See, e.g., People v White, 212 Mich App 298, 307; 536 NW2d 876 (1995). Accordingly, defendant's second stalking conviction does not violate double jeopardy. Therefore, any objection by trial counsel would have been futile, and "[f]ailing to advance a meritless argument or raise a futile objection does not constitute ineffective assistance of counsel." Ericksen, 288 Mich App at 201. Moreover, we note that at the Ginther hearing below, trial counsel testified that where defendant was originally charged with stalking and aggravated stalking, she successfully got the aggravated stalking charge reduced. Based on the foregoing, we cannot conclude that trial counsel's representation was deficient.
Defendant also argues that his trial counsel was ineffective for not moving for a directed verdict with respect to the second charge on the basis of double jeopardy and insufficient evidence. The standards governing review of a motion for a directed verdict and a challenge to the sufficiency of the evidence are the same. Compare People v Chelmicki, 305 Mich App 58, 64; 850 NW2d 612 (2014), with People v Meissner, 294 Mich App 438, 452; 812 NW2d 37 (2011). "When ascertaining whether sufficient evidence was presented at trial to support a conviction, this Court must view the evidence in a light most favorable to the prosecution and determine whether a rational trier of fact could find that the essential elements of the crime were proven beyond a reasonable doubt." People v Passage, 277 Mich App 175, 177; 743 NW2d 746 (2007).
As discussed, counsel was not ineffective for failing to launch a futile double jeopardy claim, and cannot be faulted for failing to demand a directed verdict on that meritless basis. Furthermore, the second stalking charge was supported by sufficient evidence and moving for a directed verdict would have been futile. Evidence was presented that between July 15, 2014, and January 2, 2015, defendant engaged in a persisting campaign of harassment. Cilc and Jensen stated that defendant left trash in his yard, which blew into their yard; that he left underwear about his property; and that he purposefully directed his lawnmower's chute at their freshly painted chairs, flashed lights into their home, threw ice cubes at their home, and marched in military garb outside at night. The jury could have utilized any one of these incidents, in conjunction with either the "loud noise" incident on January 5, 2015, or the "flashing lights" incident on January 19, 2015, to convict defendant on the second stalking charge. The jury could have also solely used the January 5 and January 19, 2015 incidents to convict defendant of stalking on that charge. Although defendant argues that there was insufficient evidence to support a finding that he committed an act of harassment on January 5, 2015, evidence was presented that defendant's neighbors placed a call to police on that date, complaining that defendant was making loud noises at 3:05 a.m. and that the noises were rattling pictures in their home. Accordingly, defendant's argument lacks merit.
1. Held: Petitioner, a Los Angeles, Calif., fireman, may not exclude or deduct from gross income amounts withheld from his salary during 1973 as contributions to the Los Angeles Firemen's Pension Fund. Petitioner received a current economic benefit in 1973 from increased vested annuity rights at least equal in value to the amounts withheld from his salary.
2. Held, petitioner is not entitled to a deduction claimed because the value of the dollar declined in relation to gold or silver.
3. Held, petitioner is not entitled to a dependency exemption for his 21-year-old son, who did not receive over half his support from petitioner.
4. Petitioner made mandatory payments of $3 per day for participation in the nonexclusionary, organized mess at his fire station. Held, amounts paid are deductible as ordinary and necessary business expenses under sec. 162(a), I.R.C. 1954, even though petitioner did not protest payment and was generally present in the fire station during the mess periods and ate his meals there. Cooper v. Commissioner, 67 T.C. 870 (1977).
5. Held, from the evidence amount of deductible rental business and miscellaneous expenses determined. Richard R. Sibla, pro se. Alan R. Herson and Patrick J. Dowling, for the respondent.
Respondent determined a deficiency in petitioner's income tax for the calendar year 1973 in the amount of $1,240.
Each party has made certain concessions with respect to the issues raised by the pleadings. There remain for decision the following:
(1) Whether petitioner in computing his income subject to tax is entitled to exclude or deduct amounts withheld from his salary for contributions to the Los Angeles Firemen's Pension Fund;
(2) Whether petitioner is entitled to a deduction of $12,983 from his adjusted gross income on the basis that the value of the United States dollar has declined with respect to gold and silver;
(3) Whether petitioner, a fireman employed by the Los Angeles Fire Department, is entitled to deduct either as a business or miscellaneous expense the $366 which he was required to pay at the rate of $3 for each 24-hour working shift into the organized mess at his post of duty;
(4) Whether petitioner's itemized deductions for real estate taxes, contributions, and court appearance were properly disallowed by respondent to the extent of $62, $81, and $17, respectively, and whether petitioner's deductions for rental expenses for building supplies, utilities, advertising and legal, and licenses were properly disallowed by respondent to the extent of $81, $24, $115, and $45, respectively; and
This amount includes $366 payment to the Firemen's Mess and $17 automobile expense for court appearances.
This issue was raised by respondent by amendment to answer pursuant to his motion at the trial to amend his answer to conform to the proof.
The parties stipulated only the facts with respect to petitioner's residence and the filing of his tax return and amended tax return for the year here in issue. These facts are found accordingly.
Petitioner, who resided in Woodland Hills, Calif., at the time of the filing of his petition in this case, filed a joint Federal income tax return with his wife, Dora G. Sibla, for the calendar year 1973 with the Fresno Service Center and on August 5, 1974, filed a joint amended Federal income tax return for 1973.
During 1973 and for 23 years prior thereto, petitioner was employed as a fireman by the Los Angeles City Fire Department. Petitioner also owned an apartment building which he operated as a rental business. In 1973, petitioner owned two automobiles and a truck which was used solely in connection with his business of renting apartments.
Under the provisions of the charter of the City of Los Angeles (the charter), petitioner was required to be a member of the Firemen's Pension System. Under the provisions of that charter, deductions were made from the salaries of firemen and deposited into the pension fund to defray in part the cost of pensions to which members would become entitled. For the year 1973, a total amount of $1,327.52 was deducted from petitioner's salary and paid into the Firemen's Pension Fund. The deductions for the pension fund are mandatory and are not returned to a member of the pension system other than through pension system payments. Under the charter provisions, any member of the pension plan who has 20 years or more of service shall be retired upon the filing of his written application therefor or, under certain circumstances involuntarily retired by order of the board of the fire department. Upon retirement, either at his own request or otherwise by the board, a member of the pension system with 20 or more years of service but less than 25 years receives a monthly pension payment for life equal to 2 percent of a pension base for each year of service. For 25 years of service, a member of the system upon retirement receives 55 percent of the pension base, and for years of service in excess of 25, an additional 3 percent per year not to exceed a maximum of 70 percent. The pension base is computed on the basis of the salary received by the fireman. The pension system also provides for disability retirement with less than 20 years of service, for survivor annuities to the widow, minor or dependent children, or dependent parents of a deceased fireman whether or not he had retired prior to his death.
Each System Member shall be deemed to consent and agree to each deduction as provided herein, and the payment of each payroll check to such System Member shall be a full and complete discharge and acquittance of all claims and demands whatsoever for the services rendered by such System Member during the period covered by each such payroll check, except such claims as such System Member may have to the benefits provided by this Article, and no System Member, former System Member or Retired Member ever shall be entitled, for any cause or reason whatsoever, to be paid any of the moneys which shall be deducted from his salary as hereinabove provided.
During 1973, petitioner's adjusted gross income as reported on his original return was $21,692. Petitioner, on his amended return, reported $8,709 as adjusted gross income with the following explanation:
5/6 of adjusted gross income (for months Jan to Oct inclusive) in Pseudo dollars P $21692 equals P $18077 times 38 equals 686926 divided by 95.48 (monthly (sic) average Jan to Oct of Daily London Gold Price) equals 7194 in Statutory dollars (S$ ) 1/6 of adjusted gross income (for months Nov & Dec) in Pseudo dollars P$21692 equal P$3615 times 42.22 equal 152625 divided by 100.75 (Nov & Dec monthly average of Daily London Gold Price) equal S$1514 in Statutory Dollars. S$7194 S$1514 = S$8709 in Statutory Dollars * * *
Petitioner's son, Blake, was 21 years old during 1973. Blake was not living with petitioner during 1973 and was not a student. During 1973, Blake was employed in a gasoline station but also occasionally did work for petitioner in connection with petitioner's rental business. Petitioner during 1973 paid Blake for the work he did in connection with petitioner's apartment rental business. Petitioner deducted these payments in computing his net income from the apartment rental business. Blake paid all of his normal support out of his own earnings and petitioner furnished him with no support during the year 1973.
The rules and regulations of the Board of Fire Commissioners of the City of Los Angeles established under the Los Angeles City Charter provide that all facilities of the fire department that are provided for the storage, preparation, cooking, and serving of food or drink shall be utilized equitably for the benefit of all members assigned at each of the fire stations or on each platoon. The regulations further provide that there shall be maintained an organized, nonexclusionary mess and that it is the department policy that all members participate in the organized mess unless specifically excluded therefrom. Each fireman was required to pay $3 for participation in the mess for each day he was on duty, and under this requirement petitioner in 1973 was required to, and did, pay a total of $366. Petitioner's duty days consisted of 24 hours each. Under the department regulations, each fireman was required to pay the $3 a day for his participation in the mess even if he brought his own lunch or for some reason did not eat the meals prepared in the mess. Each fireman was required to pay the same amount to the mess whether or not he ate the meals prepared in the mess and irrespective of the amount he ate. At petitioner's station, generally, if petitioner were out on department business, such as fighting a fire, all of the firemen at his station were out. Therefore, if the firemen were away at regular mealtime, the meal in the mess would be served upon the return of the firemen from their firefighting work. As a general rule, petitioner did in fact eat most of his meals in the mess on the days he was on duty. Since on his duty days he was required to be at his post of duty when not called out in connection with department business, petitioner would be required even if he brought his own lunch to eat it in the mess facilities when other firemen were eating the lunch prepared in the mess.
The following schedule shows the deductions claimed by petitioner for itemized deductions and rental expenses on his income tax return as filed, the amounts of the claimed deductions disallowed by respondent, and the amounts still in controversy after concessions made by the parties:
+------------------------------------------------------------+ ¦ ¦Per ¦Disallowed ¦Still in ¦ +---------------------+--------+---------------+-------------¦ ¦Itemized deductions ¦return ¦by respondent ¦controversy ¦ +---------------------+--------+---------------+-------------¦ ¦ ¦ ¦ ¦ ¦ +---------------------+--------+---------------+-------------¦ ¦Medical insurance ¦$150 ¦$150 ¦0 ¦ +------------------------------------------------------------+
Petitioner argues that since the amounts withheld from his salary for payment into the Los Angeles Firemen's Pension Fund were not included as part of his salary as reported to him on his Form W-2 furnished by the City of Los Angeles until after he had completed 20 years of service with the fire department, he should be entitled for the year here in issue to deduct the amount withheld even though that amount was included in his salary as reported on his Form W-2.
This was petitioner's sole contention, even though at the trial he was informed by the Court that what had been done in prior years would not govern the proper manner in which the withholding from his salary for payment into the pension fund should be handled for the year here in issue. We, however, have considered the legal issue of whether petitioner's payment into the Firemen's Pension Fund for the year here in issue should be excluded or deducted from his stated salary.
Respondent takes the position that petitioner received an economic benefit in 1973 from the increase in his annuity rights at least to the extent of the amount withheld. Respondent points out that petitioner's retirement benefits, which vested at 20 years of service, increased with each year of service. Respondent argues that the economic benefits received by petitioner from the pension system required the inclusion of the withheld amounts in his income.
In our view, it is clear that since petitioner's retirement allowance was increased by each year of service, payment into the retirement fund, though compulsory, did result in a direct benefit to him by increasing the pension to which he was entitled if he chose to retire or to which his widow or other qualified dependent would become entitled in case of his death. Petitioner, by accepting a position with the Los Angeles Fire Department and remaining in its employ, is deemed to have consented and agreed to the deduction from his compensation.
In the case of Feistman v. Commissioner, 63 T.C. 129, 133 (1974), we held that amounts withheld by the City of Los Angeles from the pay of a probation officer and a teacher were not deductible in computing their taxable income. In so holding, we relied on the holdings with respect to deductibility of contributions of Federal employees to the Federal Employee Retirement System. However, in the Feistman case, the retirement systems under which the taxpayers were covered provided that the participant was entitled to a refund of his contributions upon termination of his employment for reasons other than death or retirement. There is no such provision in the Firemen's Retirement System. In Megibow v. Commissioner, 21 T.C. 197 (1953), affd. 218 F.2d 687 (3d Cir. 1955), we concluded that the withholdings from a Federal employee's salary for contributions to the Civil Service Retirement System were a part of his salary and that there was no provision of law permitting a deduction of the amounts withheld. In that case, we pointed out that the employee was deemed by law to have consented and agreed to the deductions and that when his salary, minus those deductions, was paid to him, all claims he had for services rendered, except the benefits to which the Civil Service Retirement System entitled him, were fully discharged.
The basic salary of Malcolm D. Miller (hereinafter called the employee) for the year 1940 was $2700. This is the amount which was fixed by law to compensate him for his services as a civil service employee for that year. Of this amount he received $2,605.44 in cash. $94.56 of his salary, under the law, by his consent, was applied toward the purchase of an annuity, provided by law for his benefit.
* * * The effect of his agreement is the same as if he had received his entire salary in cash, and then sent 3 1/2 per centum thereof to the Civil Service Commission for the purchase of the annuity provided by law.
(2) But even if it should be considered that the employee did not receive the full amount of $2700 and paid $94.56 therefrom to purchase an annuity and secure the other protection afforded by the Act, he, under any view of the transaction, as a result thereof, received additional compensation in the form of economic benefits under the Retirement Act. These benefits take the place of the part of the taxpayer's salary which was withheld, and, in any event, had an equal or greater value than the sum withheld and constitute income just as if the taxpayer had received his entire salary in cash. * * * The decisions in cases where an employer has paid premiums on life insurance policies issued for the benefit of an employee are in point. In such cases it is held that the amount paid as premiums is presumed to be additional compensation for the employee's services, and that it constitutes income to the employee on the theory that he has received a benefit in the form of insurance protection as a substitute for the cash payment. See Yuengling v. Commissioner, 3 Cir., 69 F.2d 971; Canady v. Guitteau, 6 Cir., 86 F.2d 303; Commissioner v. Bonwit, 2 Cir., 87 F.2d 764, certiorari denied 302 U.S. 694, 58 S.Ct. 13, 82 L.Ed. 536; Adams v. Commissioner, 18 B.T.A. 381; Danforth v. Commissioner, 18 B.T.A. 1221; Deupree v. Commissioner, 1 T.C. 113, cf. Burnet v. Wells, 289 U.S. 670, 53 S.Ct. 761, 77 L.Ed. 1439. And it has been held that this is true even though the employee does not have the option to take in cash the amount paid as premiums. Brodie v. Commissioner, 1 T.C. 275.
More recent cases involving the Federal Retirement System have likewise held the amounts withheld to be part of the taxpayer's salary and not to be deductible. Cohen v. Commissioner, 63 T.C. 267 (1974), affd. per curiam 543 F.2d 725 (9th Cir. 1976); Hogan v. United States, 513 F.2d 170 (6th Cir. 1975). In the year here involved, petitioner had a vested right in the retirement funds to the extent that he could retire at any time and receive the retirement benefits. If he left the employ of the fire department for any reason, his retirement benefits would begin. In other words, he had vested rights in the fund. As pointed out in Hogan v. United States, 513 F.2d at 174: ‘Present vesting of a right, even if its enjoyment is postponed to the happening of a future event, is an important aspect of gross income for income tax purposes. Renton K. Brodie, 1 T.C. 275 (1942). See also United States v. Basye, 410 U.S. 441, 452, 93 S.Ct. 1080, 35 L.Ed.2d 412 (1973).’
Petitioner could not withdraw the funds he had in the retirement system in cash, and if he died while on duty leaving no spouse or other qualified beneficiary, his estate would not receive his interest in the fund. In this respect, the facts here differ from those in the cases involving the Federal Retirement System and Feistman v. Commissioner, supra, involving employees under other Los Angeles, Calif., retirement systems. However, in our view, petitioner received benefits at least equal to the amount withheld from his salary and, therefore, even though the enjoyment of these benefits was postponed, the right to the benefits constitutes gross income. Certainly premiums paid by an employer for life insurance for an employee where there is no cash surrender value or the amount of the premium is in excess of the increase in the cash surrender value result in providing currently no benefit for the employee other than protection. However, it has been consistently held that each payment of premium is includable in the income of the employee because of the economic benefit conferred on him. Frost v. Commissioner, 52 T.C. 89, 96 (1969), and cases there cited. Cf. Clay v. Commissioner, 46 T.C. 505 (1966), with respect to payment of premiums for term life insurance, particularly the statement at page 510 that ‘Respondent asserts and petitioner does not contest that the premiums here paid * * * would be fully taxable to petitioner were it not for section 1.61—2(d)(2), Income Tax Regs., supra.’ See also sec. 79, I.R.C. 1954.
Petitioner has pointed to no provision of statute that would entitle him to deduct the amount of these contributions to the Firemen's Pension System from his gross income. In our view, these payments are includable in petitioner's income and are not deductible.
We have in numerous cases held that a taxpayer is not entitled to a deduction nor any other adjustment to his gross income because of the fact that the value of a dollar may have declined in relationship to silver or gold. See Cupp v. Commissioner, 65 T.C. 68 (1975). See also Hartman v. Switzer, 376 F.Supp. 486, 490 (W.D. Pa. 1974), in which the court termed an argument similar to petitioner's argument here as ‘clearly spurious.’ We, therefore, hold that petitioner is not entitled to any adjustment in the gross income he received because of any decline in value of the dollar with respect to gold or silver.
The facts here show that petitioner's son, Blake, was 21 years old in 1973, that he was not a student, and that he did not live with petitioner. Even though petitioner made some payments to Blake for services rendered, he did not make any payments toward his support.
Section 151(e) states that a taxpayer is entitled to a dependency exemption for each dependent as defined in section 152 whose gross income in the calendar year of the taxpayer is less than $750 or who is a child of the taxpayer who has not attained the age of 19 at the close of the taxable year or is a student. Section 152(a) includes as a dependent a son over half of whose support for the calendar year involved was received from the taxpayer. The record here shows that Blake did not receive over half of his support for 1973 from petitioner. The record also shows that Blake was over 19 and was not a student. We, therefore, hold that petitioner is not entitled to a dependency exemption for Blake.
In Cooper v. Commissioner, 67 T.C. 870 (1977), we held that a Los Angeles fireman, who was required to make payments into the firemen's mess under the same regulations that govern the payments made by petitioner in this case, was entitled to deduct such payments as a business expenses. At the trial of this case, counsel for respondent stated that respondent did not contend that there was any factual distinction between the instant case and the Cooper case. However, on brief respondent argues that the cases are factually distinguishable in that in the Cooper case the evidence showed that the taxpayer objected to paying the assessed amount but relented and paid it when he was threatened with disciplinary action, whereas petitioner in this case made no showing that the he protested the payment, and the facts in the Cooper case showed that at times the taxpayer was away from the station on fire department business during the mess period and the facts in the instant case show that generally the taxpayer was present at the fire department during the mess periods and ate his meals there. In our view, these factual distinctions are not a basis for distinguishing our holding in the Cooper case from this case. In both cases the firemen were required to make the payments and required to eat in the mess when they were at the station house. In our view, the holding of the majority opinion as well as the concurring opinion in the Cooper case is not predicated on the fact that the taxpayer protested the payments or the fact that he missed some meals but rather on the nature of the requirement for the payment. The dissenting opinion did contain a statement that to the extent the taxpayer was required to and did pay for meals he did not eat, the cost would be an ordinary and necessary expense of the business of being a fireman, but this was not the holding in the Cooper case. We find the instant case not to be distinguishable from the Cooper case and sustain petitioner's right to the deduction for $366 on the basis of the Cooper case.
Of the amounts of disallowance of itemized deductions and rental expenses that still remain in issue, after concessions by each party and in effect an audit of petitioner's return during trial, we hold for respondent as to all items except the $11 auto license fee on his truck on the grounds that petitioner failed to substantiate that the claimed amounts were both paid and not deducted elsewhere on his return. Petitioner deducted the $11 registration fee which he paid for each of his two automobiles and on his truck as ‘Taxes * * * Other.’ The $33 of this item, which is still in dispute, consists of these three $11 amounts. Petitioner also deducted the $11 paid for his truck license as part of his rental expense deduction for ‘License’ of $62. The $45 of this item still in dispute includes the $11 paid by petitioner for his truck license. An automobile registration fee not related to value of the automobile is not a tax within the definition of section 1.164—3(c)(1)—(3), Income Tax Regs. A flat charge for all vehicles does not meet the requirement of the regulations for an ad valorem tax. For that reason, clearly the $11 paid for the license fee for each of the two cars is not deductible. However, the record reasonably shows that the truck was used only for business purposes by petitioner in connection with his rental business. Therefore, in our view, any payment in connection with the truck would be properly deductible as a business expense. The $11 registration fee paid for the truck is deductible by petitioner not as a tax but as a cost of his rental business. We, therefore, hold that no amount of the $33 claimed tax deduction still in dispute is proper but that petitioner is entitled to deduct $11 of the $45 claimed to be deductible as ‘License’ as an expense of his rental business.
Hace ya algunos años participé en la primera reunión de un grupo de lectura cuyo nombre no vale la pena mencionar. El libro acordado era la Apología de Sócrates de Platón, y recuerdo que asistí a la reunión emocionada por la discusión de una obra eminentemente filosófica por un grupo de personas que nos dedicábamos, primordialmente, a crear, desmenuzar y leer literatura.