Court Opinion

ID: 4633345
Source: CourtListenerOpinion
Date Created: 2020-11-21 03:13:44.842977+00
Date Added: 2024-06-11T08:00:06.527659
License: Public Domain

William J. Powers, Petitioner, v. Commissioner of Internal Revenue, RespondentPowers v. CommissionerDocket No. 88627United States Tax Court36 T.C. 1191; 1961 U.S. Tax Ct. LEXIS 67; September 29, 1961, Filed *67 Decision will be entered for the respondent.  Seizure of petitioner's personal automobile by officials in East Germany held not to be a deductible loss. William J. Powers, pro se.James Booher, Esq., for the respondent.  Opper, Judge.  OPPER*1191  A deficiency in income tax for the year 1958 in the amount of $ 340.51 is in controversy.  The sole question is whether the confiscation of petitioner's automobile by officials in the East German Zone gave rise to a deductible loss.FINDINGS OF FACT.Petitioner filed his 1958 Federal income tax return with the district director of internal revenue, Newark, New Jersey.In this return petitioner furnished the following explanation for a claimed $ 1,200 deduction:Volkswagon automobile purchased at factory in W. Berlin, Germany, confiscated at W. Berlin border July 26, 1958, (3 days after purchase) by E. German police.  Complete data on file with State Dept. in Berlin and Washington, D.C. State Dept. unable to effect return of car because of diplomatic relationship.  Car not covered by insurance     $ 1,200.00.Petitioner purchased a car in Berlin on July 23, 1958.  He attempted to drive this car from Berlin to Hamburg*68  on Sunday, July 26.Petitioner purchased this car as a resident of West Berlin; the car was registered in West Berlin; he obtained resident license plates in West Berlin.  In attempting to drive this car to Hamburg, he was stopped at Braunschweig, Germany, which is a checkpoint.*1192  He was there interrogated for approximately 2 hours.  Petitioner was asked for his automobile papers -- registration, license, insurance, and the like.  He handed a portfolio to the customs officer. The customs officer interrogated petitioner on his personal history, occupation, and other matters.  The customs officer recorded all of this data and said that if petitioner would sign a statement as to the information furnished, petitioner would be released.  Petitioner signed such a statement and was released.  The car was not returned.Petitioner immediately went to the American military authorities, which are stationed approximately one-half mile distant from this customs agency.  The American military authorities referred petitioner to their Provost Marshal's office.  Petitioner spoke to a man named Firestone.Petitioner and Firestone returned to the East German customs area.  They attempted to*69  reclaim the car.  They were told that the car was impounded because a trade paper was missing in the papers that the automobile dealer had furnished petitioner.  Because of this, there was going to be a trial as to the disposition of the car and the penalties involved.Petitioner was advised to return in approximately 1 week.  He did this.  He was then advised that the penalty for not having this trade paper was the confiscation of the car.Petitioner communicated with the American consular office and his Representative in Congress.  The State Department advised petitioner that they would review the matter and issue a decision.  Their decision was that, since the State Department did not have diplomatic relations with the East German Government at the time, they could do nothing for petitioner.  They suggested that petitioner obtain a lawyer in West Berlin.Petitioner attempted to obtain a lawyer in West Berlin.  In the two instances that he attempted to obtain a lawyer, such lawyers were reluctant to proceed into the East zone and counsel petitioner.Petitioner was advised to return to the customs office in East Berlin for the final disposition of his case.  His car was confiscated*70  because of his lack of the trade paper.This automobile was petitioner's personal automobile.The confiscation of petitioner's automobile by authorities in East Germany did not constitute a loss from casualty or theft.OPINION.It seems clear that the confiscation of petitioner's automobile by officials in East Germany acting under color of legal authority, arbitrary and despotic as it may have been, could not have been a "theft" for tax deduction purposes. Johnson v. United States, 291 F.2d 908">291 F.2d 908, 909 (C.A. 8, 1961).*1193  "[Losses] * * * from theft" consist only of takings and deprivations in which the element of criminal intent has been involved.  [Johnson v. United States, supra.]Petitioner offers some suggestion that his loss was a "casualty" in any event.  Assuming that that change of position is now open to him, it is of no assistance.  What happened was not like a "fire, storm or shipwreck." Sec. 23(e)(3), I.R.C. 1939.  It did not embody the requisite element of "chance, accident or contingency." Alice P. Bachofen von Echt, 21 B.T.A. 702">21 B.T.A. 702, 709 (1930). The deduction was*71  not permissible either as a theft or as a casualty. Weinmann v. United States, 278 F.2d 474 (C.A. 2, 1960).  Petitioner's loss, though unfortunate, "was no more than a personal expense to petitioner, for the deduction of which the statute makes no provision." Thomas F. Gurry, 27 B.T.A. 1237">27 B.T.A. 1237, 1238 (1933).Decision will be entered for the respondent.