Smith v. Commissioner , 33 T.C. 1059 ( 1960 )

Ray A. Smith and Florence E. Smith, Petitioners, v. Commissioner of Internal Revenue, Respondent

Smith v. Commissioner

Docket No. 68300

United States Tax Court

33 T.C. 1059; 1960 U.S. Tax Ct. LEXIS 186;

March 24, 1960, Filed

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Decision will be entered for the respondent.

Petitioner Ray Smith was employed from May 1952 to June 1954 as an electrician by five different contractors who, during such time, had contracts for electrical work to be performed in the construction of a plant which the Aluminum Company of America was building near Rockdale, Texas. Each contractor for whom petitioner worked during this time was separate and independent of the other and petitioner worked for only one contractor at a time. Petitioner was continuously thus employed at Rockdale during the entire year 1953 and was not employed elsewhere. At all times that petitioner was employed at Rockdale, he maintained a residence in Austin, Texas, where his wife continued to reside. Petitioner made weekend trips each week to Austin to spend the weekends with his wife. Held, Rockdale was petitioner's post of duty during 1953 and he is not entitled to deduct amounts expended for meals and lodging while working at Rockdale. Held, further, petitioner is not entitled to deduct the automobile expenses which he incurred while traveling to Austin to spend the weekends with his wife. The Commissioner is sustained.

Edgar E. Hoppe, Esq., for the petitioners.

Edward John Eagleton, Esq., Harold L. Cook, Esq., and Allen T. Akin, Esq., for the respondent.

Black, Judge.

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BLACK

The Commissioner has determined a deficiency in petitioners' income tax for the year 1953 of $ 973.84. The deficiency is due to an adjustment made by the Commissioner to the income reported by petitioners on their joint return for the year 1953. This adjustment was made by the Commissioner's disallowance of $ 3,046.57 of the $ 4,104.39 deductions claimed by petitioners on their return. The Commissioner explained his adjustment in the deficiency notice as follows:

Since you were employed continuously from May 14, 1952 until May 29, 1954, in Rockdale, Texas and remained away on an indefinite assignment for 2 years, 5 months and 1 day it does not appear that you were working away from home on a temporary assignment but that you were actually employed at a new post of duty. Where a person is employed at a location away from his home for an indefinite or indeterminate period, such location becomes his home for tax purposes. Employment of expected or actual duration of a year or more at a particular location is generally considered indefinite employment there, and travel expenses in connection therewith are not deductible. Your employment at Rockdale is held to have been indefinite rather than temporary.

In their assignment of error petitioners contest only $ 2,116.14 of the deductions which the Commissioner has disallowed. Petitioners' assignment of error is as follows:

(a) In determining taxable income of the petitioners for the year 1953, the Commissioner erroneously disallowed a deduction of $ 2,116.14, representing automobile expenses of $ 458.64 and room and board of $ 1,657.50, claimed by the petitioner (the husband) in connection with his trade as an electrician while working on temporary construction projects. The Commissioner contends that these expenditures do not constitute allowable deductions in arriving at taxable income because he alleges that the petitioner remained away on an indefinite assignment.

FINDINGS OF FACT.

Some of the facts have been stipulated and, as stipulated, are incorporated herein by this reference.

In the year 1953, petitioners Ray A. Smith and Florence E. Smith, husband and wife, maintained a residence in Austin, Texas, and filed their joint income tax return with the district director of internal revenue, Austin, on or about March 1, 1954. Ray A. Smith will hereinafter be referred to as petitioner.

Petitioner was an electrician in the year 1953, and was a member of the International Brotherhood of Electrical Workers, Local Union No. 520, Austin. Petitioner obtained all job assignments through referrals from the local union at Austin, of which he was a member.

From May 14, 1952, through June 2, 1954, petitioner worked in Rockdale, Texas, on the construction of a plant by the Aluminum Company of America (hereinafter referred to as Alcoa), for the following electrical contractors:

	Date
Employer
	From --	To --
Fisk Electric Company, Houston, Texas	May 14, 1952	July 20, 1952
Harmon Electric Construction Company, Dallas,
Texas	July 21, 1952	Aug. 29, 1952
Southwest Electric Company, Amarillo, Texas	Sept. 3, 1952	May 5, 1953
Allegheny Industrial Electrical Company, Inc.,
Pittsburgh, Pennsylvania	May 6, 1953	July 15, 1953
A & H, Inc., Corpus Christi, Texas	July 16, 1953	June 2, 1954

Rockdale is 63 miles from the petitioner's residence at Austin.

During the period May 14, 1952, through June 2, 1954, petitioner's only employers were Fisk Electric Company, Harmon Electric Construction Company, Southwest Electric Company, Allegheny Industrial Electrical Company, Inc., and A & H, Inc., and all work done was on the construction of the Alcoa plant near Rockdale. When taking a specific employment assignment at Rockdale with each of the three contractors by whom he was employed in 1953, petitioner could foresee the end of each such assignment, and he did not know at any time while employed at Rockdale that he would draw another work assignment there. Each contractor was separate and independent of the other.

Petitioner was not employed by more than one person at the same time during the period May 14, 1952, through June 2, 1954. When petitioner first went to work in Rockdale on the contract of Fisk Electric Company, he did "not necessarily" expect to be reassigned in Rockdale on subsequent contracts.

While employed in Rockdale, petitioner traveled to Austin on the weekends to visit his wife.

Petitioner was referred by his union to prospective employers in Rockdale. It was up to the electrical contractor, when petitioner applied in Rockdale, whether to employ him or not.

Petitioner had continuous and uninterrupted employment in Rockdale for a period beginning May 14, 1952, through June 2, 1954, except for a 3-day holiday taken on Labor Day weekend in 1952.

Petitioner's post of duty was Rockdale during the year 1953. It was his place of employment for an indefinite period of time.

For the taxable year 1953, petitioner incurred expenses for meals and lodging of $ 1,657.50 while employed in Rockdale.

Petitioner incurred automobile expenses of $ 458.64 in the use of his own automobile for the taxable year 1953 in traveling on the weekends between Rockdale and his residence in Austin, a round trip distance of 126 miles. The automobile expenses of $ 458.64 incurred by the petitioner in driving between Rockdale and Austin on the weekends were less than expenses which would have been incurred for meals and lodging if petitioner had remained at Rockdale over the weekends.

OPINION.

Petitioner contests the disallowance of $ 1,657.50 expended for meals and lodging in Rockdale during 1953, and of $ 458.64 expended in the same year in making trips from Rockdale to Austin to spend the weekends with his wife. The grounds which petitioner urges against the action of the Commissioner in making these disallowances is that the employment of petitioner at Rockdale during 1953 was temporary in character and that the amounts in question are deductible as traveling expenses under either section 22(n)(2) or section 23(a)(1)(A), I.R.C. 1939.

The Commissioner, in his determination of the deficiency, has disallowed such deductions on the ground that petitioner's employment at Rockdale in 1953 was not temporary but was indefinite in duration and that therefore the amounts are not allowable as travel expense deductions incurred by the taxpayer while away from home. The Commissioner does not question that such expenditures were actually incurred by petitioner in 1953 or that they were reasonable. His contention is that they are not deductible by petitioner as travel expenses under the statutes named by petitioner. On the contrary, the Commissioner contends that the expenditures in question were personal expenses of petitioner and are nondeductible by reason of section 24(a)(1), 1939 Code.

This is essentially the same issue as we had in the recent case of James M. Eaves, 33 T.C. 938">33 T.C. 938. We think that under the authority of that case the Commissioner must be sustained as to the $ 1,657.50 which petitioner expended in 1953 for meals and lodging while working at Rockdale. No traveling expenses between Rockdale and Austin were involved in the Eaves case. It is true that in the Eaves case sections of the 1954 Internal Revenue Code were involved instead of sections of the 1939 Code, as here. However, the sections of the respective Codes with regard to the type of expenditures involved here are essentially the same. We do not understand that petitioner contends otherwise.

There is another difference in the facts of the instant case from those which were present in the Eaves case. In the Eaves case the taxpayer, while working at the Alcoa plant in Rockdale, had but one employer, Grimes Electric Company of Austin, Texas, whereas in the instant case petitioner, from May 14, 1952, when he first began working at the Alcoa plant, to June 2, 1954, when his employment there ended, had five different employers. Their names are given in our Findings of Fact. But we do not think that difference in the facts of the two cases makes them distinguishable in principle. The essential fact is that from the time petitioner began his employment at the Alcoa plant in Rockdale, May 14, 1952, to the time it was terminated in June 1954, his employment there was continuous even though he did have several different employers.

Under these circumstances we do not see how we could hold that petitioner's employment at Rockdale was "temporary" as distinguished from "indefinite" as determined by the Commissioner. That is particularly true of the taxable year which we have before us, viz, 1953. In that year petitioner's employment at Rockdale was continuous as the facts show. There were no interruptions except to change over from one employing contractor to another. We do not think that fact would distinguish the instant case from the Eaves case. In the Eaves case we made the following finding of fact:

In May 1952, Grimes [the employer of Eaves] commenced work on a contract in connection with the construction of a plant by the Aluminum Company of America (hereinafter referred to as Alcoa) at Rockdale, Texas, approximately 65 miles from Austin. Grimes continued to do electrical work for Alcoa under several contracts until sometime in August 1956. Each contract was separate and independent of the others. Grimes did not know upon obtaining the first contract that it would be successful in obtaining other contracts as they came up in connection with the construction of the Alcoa plant near Rockdale. The various contracts obtained by Grimes in connection with the Alcoa plant from the time it obtained its first contract in 1952 until the last one in 1956 lasted from a few days to about 6 months each.

We think petitioner's situation in the instant case is not essentially different from that of the taxpayer in the Eaves case. Therefore, following our decision in the Eaves case, we sustain respondent in his disallowance of the $ 1,657.50 which petitioner expended in 1953 for meals and lodging while working at Rockdale.

In the instant case, as we have already mentioned, there is another amount involved. That amount is $ 458.64, automobile expenses, incurred by petitioner in going to Austin each week to spend the weekend with his wife. That type of expense was not involved in the Eaves case. With reference to this particular item, petitioner states in his brief as follows:

With respect to the automobile expenses of $ 458.64 incurred by the petitioner in traveling on the week ends between his home at Austin, Texas, and Rockdale, Texas, the Commissioner in similar cases has stated: "An employee who is assigned for several weeks or months to a minor or temporary post of duty, and who returns to his family residence on week ends is allowed to deduct the expenses of the trip only to the extent that he would have incurred expenses for meals and lodging if he had remained at the temporary or minor post." See Revenue Ruling 54-497, 1954-2 CB 75.

Manifestly, the foregoing internal revenue ruling to which petitioner refers is not applicable to the instant case in view of our finding and holding that petitioner's post of duty in 1953 was at Rockdale and that it was not a temporary post of duty which was the type of a post of duty with which the Commissioner was dealing in the revenue ruling to which petitioner refers. That revenue ruling was a very comprehensive one and dealt generally with the subject of traveling expenses. In the course of the ruling it is stated at page 77:

It is fundamental, therefore, that a taxpayer cannot deduct the cost of his meals and lodging while performing his duties at his place of business, even though he maintains his permanent residence elsewhere. Accordingly, it is now well-settled law that a taxpayer's "home," for purposes of this statute, is located at the place where he conducts his trade or business; unless he is so engaged at two or more separate localities, in which event his "home" is located at his principal or regular post of duty during the taxable year.

We have held that Rockdale was petitioner's post of duty throughout the year 1953 and was not his "minor or temporary post of duty" in that year. Therefore, we hold that petitioner's automobile expenses incurred by him in 1953 in spending the weekends with his wife were personal expenses and are not deductible. See section 24(a)(1), 1939 Code.

Decision will be entered for the respondent.