Court Opinion

ID: 4481730
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:15:03.819951+00
Date Added: 2024-06-11T14:54:00.909330
License: Public Domain

Hoyt, J., dissenting: I disagree with the majority opinion by my brother Simpson and respectfully dissent. With due deference 1 should like to record my disagreement not only with the result but also with some of the legal theories advanced in the majority opinion. We have recently confirmed that employed persons can be in the trade or business of being employees so that expenses incurred in obtaining employment are reasonable and necessary business expenses of their own business, deductible as such. David J. Primuth, 54 T.C. 374 (1970); Guy R. Motto, 54 T.C. 558 (1970). Here the taxpayer is a schoolteacher. He was in the trade or business of being a member of the teaching profession and began his professional career in the year prior to the year before us. See Mary O. Furner, 47 T.C. 165 (1966), reversed on other grounds 393 F. 2d 292 (C.A. 7, 1969).1 The fact that Tucker was not employed as a teacher until August of 1966 would not prevent recognition of the fact that he had then commenced and was thereafter engaged in carrying on his business of being a teacher. Furner v. Commissioner, supra. Whatever ordinary and necessary expenses he incurred in carrying on that business in the following year, the year before us, should be allowed as expenses of conducting his teaching business, including traveling expenses while away from home. Sec. 162(a) (2). Commissioner v. Flowers, 326 U.S. 465 (1946), established three tests for the 'allowance of away from home travel expense deductions: (1) The expense must be reasonable and a necessary traveling expense, (2) the expense must be incurred “while away from home,” and (3) the expense must be incurred in pursuit of business, i.e., there must be a direct connection between the expenditure and the carrying on of the trade or business of the taxpayer or his employer. “The exigencies of business rather than the personal conveniences and necessities of the traveler must be the motivating factors.” In the many intervening years since Flowers this Court has carved out an exception to the requirement that business exigencies must motivate the travel and has allowed deduction of traveling expenses, including meals and lodging, when a taxpayer accepts or is assigned to a “temporary” job away from home. The Supreme Court has recognized this (without approving it) and in Peurifoy v. Commissioner, 358 U.S. 59, 60 (1958), described the exception as follows: Generally, a taxpayer is entitled to deduct unreimbursed travel expenses only when they are required by “the exigencies of ’business.” * * * To this rule, however, the Tax Court has engrafted an exception which allows a deduction for expenditures of this type when a taxpayer's employment is “temporary” as contrasted with “indefinite” or “indeterminate.” * * * [Emphasis added.] This exception dictates, in a long line of cases, that if a taxpayer’s “stay at the new post of business is to be temporary — ‘the sort of employment in which termination within a short period could be foreseen’ (Beatrice H. Albert, 13 T.C. 129, 131 (1949)) — it is not reasonable to expect him to move his residence.” If he incurs living expenses at the temporary post, these are traveling expenses required by the trade or business rather than by personal choice, and they are therefore deductible. Ronald D. Kroll, supra at 562-563. The respondent did not quarrel with the engrafted exception in the Peurifoy case. See Peurifoy v. Commissioner, supra at 60. In Eev. Eul. 60-189,1960-1 C.B. 60, he has recognized its validity. I do not believe that we should turn our backs on it here. "We have held in many cases that a salaried employee or wage earner, who by his own choice, accepts a temporary post away from his former home with a new employer, is entitled to deduct away-from-home traveling expenses. It has never been suggested by any of these cases that the same priciples should be applied only where an employee is ordered to a temporary post of duty by his employer. Hollie T. Dean, 54 T.C. 663 (1970); Laurence P. Dowd, 37 T.C. 399 (1961); Alois Joseph Weidekamp, 29 T.C. 16 (1957); Harry F. Schurer, 3 T.C. 544 (1944); Virginia C. Avery, T.C. Memo. 1970-269; Philip N. Rolbin, T.C. Memo. 1970-186; Nat Glogowski, Jr., T.C. Memo. 1967-236. The sole issue to be decided here, therefore, as I see it, is whether or not the taxpayer was temporarily “away from home” in pursuit of his trade or business when he incurred the expenses in question. The majority opinion sidesteps and ducks this issue, and makes no finding with respect to the temporary, indeterminate, or indefinite nature of this petitioner’s two employments in question. As recognized by the majority opinion, the away-from-home provision is designed to mitigate the burden of the taxpayer, who because of the exigencies of his trade or business, must maintain two residences and thereby incur duplicate living expenses. Ronald D. Kroll, 49 T.C. 557 (1968), and cases cited therein. The exception allowed where a taxpayer is temporarily employed away from his home is directed toward this same end. Harvey v. Commissioner, 283 F. 2d 491 (C.A. 9, 1960), reversing on other grounds 32 T.C. 1368 (1959). It has been recognized that the employment away from home must be temporary “in contemplation at the time of its acceptance and not indeterminate in fact as it develops.” Commissioner v. Peurifoy, 254 F. 2d 483 (C.A. 4, 1957), affd. 358 U.S. 104 (1958). We have repeatedly stressed the importance of the understanding and intention of the taxpayer at the time of the acceptance of the employment in determining whether or not it was temporary, indefinite, or indeterminate. Emil J. Michaels, 53 T.C. 269 (1969); Ronald D. Kroll, supra; Laurence P. Dowd, supra. Certainly here Tucker contemplated, understood, and intended when he accepted each of the employments in question, that he would only remain away from his permanent home for a known short period. He held only a temporary teaching certificate in Georgia and was a neophyte teacher, without status or tenure in Dade County, Ga., or in Murphy, 1ST.C. He had no assurance whatever that he would be rehired by either employer for another school year. The employments in question were short-term, temporary jobs in contemplation when accepted, and never ripened into anything more. In Laurence P. Dowd, supra, a college professor decided to accept a 10-month teaching job at a foreign university, under a Fulbright grant to begin in October of 1955. Accompanied by his wife and children he left the United States in late September 1955. His original 10-month grant was extended by a renewal for another 10-month period and an interim grant for part of 2 summer months. The taxpayer remained abroad with his family from October of 1955 until July of 1957, a period of 21 months, during which time he lectured at the foreign university. He rented his family home in the United States during his absence and therefore did not incur duplicate expenses for maintaining two households. We held that nevertheless his tax residence remained in the United States in 1956 and 1957 and that during the 21-month period he spent abroad “petitioner was temporarily away from home in the pursuit of his trade or profession of teaching.” In Dowd it was stressed that by its very nature the Fulbright grant was temporary since it was for a fixed period of 10 months, and that petitioner never intended to remain abroad indefinitely or permanently. We concluded that he was entitled to deduct the expenses he incurred for living abroad during the entire time he was away as “traveling expenses” under section 162(a) (2) of the Code. We then allowed a deduction for those expenses in the amount of $4,800 for 1956 and $2,500 for 1957. To disallow the similar but lesser amounts claimed in the instant case by this teacher under the facts disclosed by this record is to demonstrate our capacity for inconsistency. As recently as March 30, 1970, we allowed a deduction for away from home living expenses to a taxpayer who had not worked in the area of his residence for a number of years, but was employed in the year before us in the Washington, D.C., area on a job lasting for 6 months. For several years he obtained his jobs through his local union office in Washington, D.C., and maintained no business ties with his hometown in Maryland, 80 miles from Washington. We held the taxpayer’s residence in Maryland remained his tax home where he did not have a nontemporary principal place of business away from the vicinity of the residence. Hollie T. Dean, supra. Our opinion in Dean was generally in accord with the respondent’s own views as expressed in Rev. Rui. 60-189, supra, in which, it is first stated that an employment of anticipated duration of a year or less will normally be regarded as of a temporary nature and then the following guidelines are announced: For example, in the absence of clear evidence to the contrary, it is normally to be presumed from common experience that a man with a wife and children would prefer to work regularly in or near the locality where his family resides so that he may be with them during off-duty hours. That a worker has a family with a fixed residence should therefore tend to- show that he takes jobs at distant points for business rather than for personal reasons. Should his case present the additional fact that there is a shortage of work in the locality where the family resides, or a shortage of sufficient work there to provide year-round employment, there would be even stronger reasons to conclude that the jobs are taken elsewhere for business rather than for personal reasons. * * * As the majority opinion recognizes, the evidence here is convincing that petitioner preferred to work in the Knoxville area and that he sought diligently to obtain a teaching position in that area; being unable to find one there, he left his home and family in August 1966 to accept the Georgia teaching job for 9 months, fully intending to return to Knoxville and Iris family the following June, which he did. The following fall after his efforts to obtain a teaching job near Knoxville once more proved futile, he again made the same hard choice, dictated by the same business motives and necessity. As in the case of the prior job, he intended to stay in North Carolina for only 1 school year, 9 months. As the situation developed, however, he was unable to stick it out even that long, because of the “onerous” burden of duplicated living expenses. He returned to his home in Knoxville after only 5 months. He never intended to remain indefinitely, for an indeterminate period, or permanently in either Dade County or in Murphy, N.C. He maintained his home and family in Knoxville, where his wife continued her own gainful employment, at his fixed and established residence. Later on he obtained a teaching job in Knoxville which was what he attempted to do from the start. In the year before us petitioner spent 3 months at home in Knoxville, and worked for 5 months in Georgia and for 4 months in North Carolina. I think the conclusion inescapable that under the rationale of many previously decided cases the petitioner’s two brief employments in question were temporary and that his tax home was in Knoxville; it would be unreasonable to expect him to move his home and family to Georgia in 1966 or North Carolina in 1967; in my view his expenses away from home were occasioned by business reasons and directly related to the carrying on of his teaching profession and not by personal choice. See quoted portion of Rev. Rui. 60-189, supra. The claimed deductions should therefore be allowed under section 162 (a) (2) in accordance with our views expressed in earlier cases, particularly Hollie T. Dean, 54 T.C. 668 (1970), and Laurence P. Dowd, 33 T.C. 399 (1961), which the majority fails to disavow. The majority opinion does real violence to the doctrine of stare decisis and will create doubt, confusion, and uncertainty as to the position of the Tax Court on this issue, thus inviting increased litigation. I fail to see the necessity for such ad hoc judicial action on the facts disclosed by the record here. See dissenting opinion of Simpson, J., Steinhort v. Commissioner, 335 F. 2d 496, 506 (C.A. 5, 1964). I would hold for the petitioner on the basis of previously decided cases and not ignore them. Raum; and Fat, JJ., agree with this dissent.   The Court of Appeals in Fumer recognized that educational expenses were properly deductible as ordinary and necessary business expenses in a year during which the taxpayer was neither employed as a teacher, nor on leave from a teaching position. She was still carrying on her business of being a teacher that year even under such circumstances.