Court Opinion

ID: 4484728
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:16:57.325098+00
Date Added: 2024-06-11T12:05:43.104716
License: Public Domain

Kórner, J., dissenting: I must respectfully dissent from the majority in this case. In my view, the erroneous result which the majority has reached here stems from a misapprehension as to the true nature of the taxpayer’s trade or business. Having found that this petitioner was in the trade or business of being an employee of the Met, the result which the majority reaches may logically follow; on the other hand, if we were to find (as I think we should) that petitioner was engaged in the trade or business of being a concert musician, an entirely different result would be produced. Just because a person occupies the status of employee does not necessarily mean that being an employee is his trade or business. A person may carry on a trade or business in many forms and even for different employers and still be in one trade or business. In Primuth v. Commissioner, 54 T.C. 374 (1970), cited and relied on by the majority, we did not say, as stated by the majority herein, and as suggested by other cases in this Court which have cited Primuth as authority, that a person who is an employee ipso facto "is in the trade or business of being an employee.” What we did say in Primuth is that "a taxpayer may be in the trade or business of being an employee” (emphasis added), but, in fact, we held in Primuth that the petitioner was in the trade or business of being a corporate executive. 54 T.C. at 377. Such trade or business was the same, we held in Primuth, even though it was carried on for different employers, and it was the pursuit of this unitary trade or business which made deductible the employment search fees which were in issue in that case. It is thus clear that it is not correct to hold as a matter of law that an employee is necessarily engaged in the trade or business of being an employee. Although it may be necessary in some cases to characterize an employee in this fashion, because the nature of his services does not fit within any framework that can be identified as a particular trade or business, to classify all persons in an employment status as being in the trade or business of being employees can produce results which are simply ludicrous.1  In the instant case, I would find that petitioner’s trade or business was that of a concert violinist or musician. So finding, I would give the use of petitioner’s home practice studio an entirely different focus. Petitioner was engaged in a unitary trade or business, which he carried on in conjunction with -different organizations — the Met, Chautauqua, and perhaps others — in the years before us. His status with respect to these various organizations — as employee, independent contractor, or otherwise — is not particularly material. In carrying on his trade or business, the requirement that he stay in practice was obvious, and his home studio was the only place he had in which to carry on that individual practice while he was in New York, which was the majority of the time in the years before us. The facts found by the majority as to where petitioner spent his time in his work as a concert musician show that petitioner spent more time working in his home studio than he did working in any other single place, or even all the various places he worked for the Met put together. While the majority correctly states that the number of hours worked in various places is not controlling, it is still significant in making a determination where the principal place of petitioner’s business was. Green v. Commissioner, 78 T.C. 428, 433 (1982); Jackson v. Commissioner, 76 T.C. 696, 700 (1981). Petitioner’s home practice studio was essential to him in maintaining his skills as a concert violinist. No matter with whom or for whom he performed, his home practice studio was a constant, running through all the various ways he carried on his trade or business. Even when performing outside New York City, as petitioner did, it is clear to me that the practice petitioner performed at home was of benefit to him on the road. His home practice studio can thus be fairly considered as the "focal point,” or the home base, of petitioner’s activities as a performing musician, albeit other activities, i.e., group rehearsals and performances, were carried out in a number of other places. See Baie v. Commissioner, 74 T.C. 105 (1980). I think this record supports findings that petitioner was engaged in the single trade or business of being a concert musician, which he carried on with various persons or organizations and, perhaps, in various relationships (e.g., employee, independent contractor, etc.); that his apartment studio was ordinary and necessary in carrying on that trade or business; and that it was his principal place of business, serving him in his necessary practice activities no matter whom he was working for or with at any particular time. It being undisputed in this record that the studio was used exclusively and regularly for petitioner’s practice activities and the housing of equipment and materials relating to his trade or business, I would hold that petitioner has satisfied the requirements of section 280A(c)(l), and that the claimed deductions are allowable.2  Fay, Dawson, and Goffe, JJ., agree with this dissenting opinion.  I am not prepared to agree that the president of General Motors is in the same trade or business as the janitor in the GM office building. To say that an employee is in the trade or business of being an employee says little more than that a man’s trade or business is to work for a living.   Since the maintenance of his home practice studio is not exclusively related to petitioner’s status as an employee of the Met, or any other particular employer, we do not need to consider the convenience-of-the-employer test of sec. 280A(c)(l). Likewise, I agree with Judge Wilbur’s dissenting opinion (note 9) that under the facts of this case, any reasonable allocation of income to the home office/studio would satisfy the requirements of sec. 280A(c)(5).