Court Opinion

ID: 4474355
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:10:54.02089+00
Date Added: 2024-06-11T14:53:51.296044
License: Public Domain

Oppee, J., dissenting: The peculiar circumstances of this case surround it with an importance difficult to comprehend at first glance. As far báck as the earliest revenue act, deduction of certain types of I lie expenses of travel was permitted under the general provision relating to business expense. S. 1048, 1 C. B. 101; A. R. R. 266, 3 C. B. 131; T. D. 3101, 3 C. B. 191. See Frank H. Sullivan, 1 B. T. A. 93. In 1921 there appeared for the first time a new subdivision in the classification of business expenses specifically confined not only to “traveling” expense, but modified by the phrase “while away from home in the pursuit of a trade or business.” Revenue Act of 1921, sec. 214 (a) (1). So far as my research shows, there has never been any occasion from that date to this to distinguish the expenses of getting about, where that is necessary as a business item, from “traveling expenses” as such in the narrow sense in which that term is used. The reason for this was that if the expenditure was required by the taxpayer’s business and not a personal expense denied deduction under section 24, it -was of no consequence, in permitting the deduction, whether it was supportable as an ordinary and necessary business expense or as the expense of technical “travel.” The question has, however, been implicit in cases dealing with a different aspect of the problem. The 1921 amendment, in addition to creating the special class of deduction already mentioned, added as an accompaniment that the deduction could include “the entire expense of meals and lodging.” This was a departure from the prior law, which treated such items or at least a part of them as personal expenses, the payment of which would have been required in any event, and which for that reason were denied deduction. T. D. 3101, supra; H. Rept. 350, 67th Cong., 1st sess., p. 11; S. Rept. 275, 67th Cong., 1st sess., p. 14; Statement of Dr. T. S. Adams, Tax Advisor, Treasury Department, before Executive Session, Finance Committee of Senate on 1921 Act, pp. 50, 234. Thus, in Louis Drill, 8 T. C. 902, a taxpayer whose occupation required him to travel in his business as far as another city 50 miles away was denied a deduction for meals while so employed. The record does not show the circumstances concerning the expense of getting from one point to the other, but, since petitioner’s post of duty was in the one place and he was required to proceed to the other in the course of his employment, it can not reasonably be doubted that the expenses of transportation would have been deductible. See Commissioner v. Flowers, 326 U. S. 465. This, however, would not have been on the theory of traveling expense as such, but as the expense of his employment, for if the conclusion had been that petitioner was deducting his travel expenses, no justification would exist for eliminating the cost of his meals. And in fact the opinion states: “We do not understand petitioner to contend that he was on a travel status * * * and if he did so contend the evidence would not support it.” We are now squarely faced for the first time with the necessity of drawing a distinction between transportation expenses which are business expense, and traveling expenses as such. Only the latter are permitted as a separate deduction under the short form table permitted under Supplement T. Thus, it is not sufficient for us in this case to conclude that the items in question were business expenses and hence deductible. We must concentrate on the problem of whether they are within that narrow class specified as “traveling expense,” for there are many business expenses deductible under the long form which are not included as permissible deductions under Supplement T. An example could be the payment of trade association dues or subscriptions by an employee. Clearly this would be deductible as a business expense under the general provisions of section 23. Just as clearly, it would not be permissible in connection with the use of the short form. And in my view the costs of transportation, as distinguished from traveling expense, is another. There is nothing unjust about denying such a deduction as the one involved here. Congress gave taxpayers an option to be exercised entirely at their election and accompanied it by certain conditions. Since it seems to me the decision here repudiates that legislative requirement which petitioner selected of his own volition, I believe the result to be wrong, and respectfully dissent. Habuon, t/., agrees with the above dissent.