Opinion ID: 276638
Heading Depth: 1
Heading Rank: 4

Heading: Carlos Marcello's Attorney Fees.

Text: 16 Carlos and Jacqueline deducted certain attorney fees as expenses within the meaning of Sections 162(a) and 212 of the 1954 Internal Revenue Act. The Commissioner disallowed the deductions on the grounds that the expenditures were neither business expenses nor incurred in the production or collection of income. 17 The involved fees were paid by Carlos in 1957 and 1958 in resisting deportation. The taxpayers claim that these fees were directly related to Carlos's numerous and rather intricate business ventures in Louisiana. In their brief, the taxpayers insinuate that the deportation proceedings were motivated by alleged illegal activities committed by Carlos as a partner in one of his sundry businesses. There is no evidence in the record, however, that the deportation action originated out of any business or income-producing transactions. 13 When a taxpayer claims a Section 162(a) deduction, he has the burden to prove that the expense in question has a business origin. 14 If the expenses are of a personal nature, there may be no deduction pursuant to Section 162(a). 15 18 There is a further contention that deportation was vigorously resisted not because Carlos enjoyed the comforts and sanctity of the United States, but so that he could personally operate his businesses and conserve his income-producing property. The taxpayer's argument has no merit. In Commissioner of Internal Revenue v. Tellier, 1966, 383 U.S. 687, 689, 86 S.Ct. 1118, 16 L.Ed.2d 185, the Supreme Court, quoting from Gilmore v. United States, 1962, 372 U.S. 39, 83 S.Ct. 623, 9 L.Ed.2d 570, noted that origin and character of the claim with respect to which an expense was incurred, rather than its potential consequences upon the fortunes of the taxpayer is the controlling basic test of whether the expense was `business' or `personal' within the meaning of § 162 (a). (Emphasis added.) If the taxpayers were correct, then even expense incurred in resisting a murder charge could be a business expense on the theory that incarceration would take the defendant away from his business location. We refuse to travel to such a destination. 16 19