DocketNumber： Docket No. 71101
Judges： Drennen
Filed Date： 8/11/1961
Status： Precedential
Modified Date： 11/14/2024
*98
Rudolf Jellinek, a former Czech citizen but stateless during the years involved, was living in Frankfort, Germany, working for Paramount, prior to 1951. He came to the United States on October 19, 1951, at the invitation of his employer, bringing only enough clothes for traveling and leaving his furniture and other belongings in his home in Frankfort. Shortly after arriving in New York Rudolf filed a declaration of intention to become an American citizen. Upon finding that he could not obtain satisfactory employment in this country, Rudolf returned to Frankfort on December 11, 1951, after first obtaining a permit to reenter the United States. Rudolf returned to the United States on two occasions from 1952 until 1956, each time for less than 1 month, to see his wife and son who were in the United States at the time. Rudolf was transferred by his employer to Vienna, Austria, in 1956, after which he became a citizen of Austria.
*826 Respondent determined deficiencies in income tax against petitioners for the taxable years 1952, 1953, 1954, and 1955 in the respective amounts of $ 4,458.69, $ 4,155, $ 4,225.17, and $ 3,550.12.
The sole issue is whether petitioner Rudolf Jellinek (hereinafter referred to as Rudolf) was a nonresident alien during the period 1952 through 1955.
The evidence consisted of a stipulation of facts with exhibits attached and the depositions of the two petitioners taken in Vienna, Austria, on written interrogatories and cross-interrogatories.
*827 FINDINGS OF FACT.
The stipulated facts are found as stipulated.
Petitioners are, and at all times during the period here involved were, husband and wife. They filed timely joint Federal income tax returns, Form 1040, for the taxable years 1952, 1953, 1954, and 1955 with the district director of internal*101 revenue at Newark, New Jersey. On each such return petitioners reported that their home address was "c/o C. A. Greenleaf, 488 Liberty Road, Englewood, New Jersey."
On their returns for the above years, petitioners reported the following compensation received, which was the only income reported: Year Employer Where employed Paramount International Films, Inc Germany 1952 Paramount Films of Germany, Inc Germany Paramount International Films, Inc Germany Paramount Films of Germany, Inc Germany 1953 Toffenetti Restaurant Co New York City Charles Antell, Inc Baltimore, Md Parmount International Films, Inc Germany 1954 Paramount Films of Germany, Inc Germany Stern Bros New York City Paramount International Films, Inc Germany 1955 Paramount Films of Germany, Inc Germany Vincent Guarneri New York City
*102 U.S. income Year Employer Wages tax withheld Paramount International Films, Inc $ 5,200.00 $ 4,688.32 1952 Paramount Films of Germany, Inc 20,243.26 Paramount International Films, Inc 5,200.00 4,688.32 Paramount Films of Germany, Inc 20,343.26 1953 Toffenetti Restaurant Co 702.50 105.50 Charles Antell, Inc 172.80 35.20 Parmount International Films, Inc 5,200.00 4,221.10 1954 Paramount Films of Germany, Inc 20,343,26 Stern Bros 822.95 116.91 Paramount International Films, Inc 5,200.00 4,221.10 1955 Paramount Films of Germany, Inc 17,371.78 Vincent Guarneri 1,423.00 259.00
Petitioners did not report any itemized deductions and did not claim the standard deduction on any return for the years 1952 through 1955. For each of those taxable years petitioners computed net or taxable income as reported on their joint returns by subtracting $ 1,800, representing the credit for personal exemptions for each of them and their one child, from the total income reported.
With each of the returns filed for the above years petitioners attached Treasury Department Form 1116 entitled "Statement in Support of Credit Claimed by Individual For Taxes Paid or Accrued to a Foreign Country or a Possession of the United States." This form was filed each year to support petitioners' claim for credit for the German tax on wages and the Berlin emergency contribution*103 (Notopfer) which had been collected in each year from the salary paid Rudolf by Paramount. On each Form 1116 it was reported that Rudolf was a resident of Germany.
Rudolf paid German tax on wages and the Berlin emergency contribution (Notopfer) on the compensation paid him by Paramount in the taxable years involved in the following amounts (expressed in dollars): *828
| Year | Total German tax paid |
| 1952 | $ 7,426.45 |
| 1953 | 7,059.40 |
| 1954 | 6,974.20 |
| 1955 | 6,219.20 |
On their returns for the above years petitioners claimed a
| Year | Credit claimed |
| 1952 | $ 7,426.45 |
| 1953 | 7,059.40 |
| 1954 | 6,833.17 |
| 1955 | 5,751.46 |
In the statutory notice giving rise to this proceeding, respondent allowed in each year the total German taxes paid as
Rudolf was born June 13, 1892, in Vienna, Austria. Melitta was born in 1910 in Prague, Czechoslovakia. Prior to World War II, Rudolf was a citizen of Czechoslovakia. In 1948 or 1949 he ceased to be a Czech citizen and in 1957 became a citizen of Austria. During *104 the intervening years he was a stateless person. During the years Rudolf was a stateless person he traveled on a passport issued by the International Refugee Organization (IRO).
At the time of trial petitioners lived in Vienna, Austria. Rudolf was working in Vienna as assistant to the manager of American Films Export Association, which is connected with Paramount Pictures, Inc. He had been connected with Paramount since 1925. From 1945 to 1956, when he was transferred to Vienna, Rudolf was general manager for Germany for Paramount or its related companies. His office was in Frankfort, Germany.
Sometime before 1951 petitioners rented and furnished a 5-room house in Neu Isenburg, Germany, near Frankfort. Rudolf paid 500-marks-per-month rent for the house and he maintained this house until he was transferred to Vienna.
Paramount asked Rudolf to come to the United States in October 1951 and paid for his trip to New York. Melitta entered the United States on September 19, 1951, at New York City. Rudolf came to the United States for the first time on October 19, 1951. He received an American immigrant visa in Frankfort. On this visit Rudolf brought only enough clothing for the *105 trip by air and he and Melitta stayed at a hotel in New York City. He left his cook and a pet dog in the rented house in Neu Isenburg.
Under date of October 24, 1951, Rudolf completed and filed a United States Department of Justice form entitled "Application for a Certificate of Arrival and Preliminary Form for a Declaration of Intention," in which he reported that his place of residence was Hotel *829 Bancroft, 40 West 72d Street, New York City; that he entered the United States for permanent residence on October 19, 1951; that since such lawful entry for permanent residence he had not been absent from the United States; that his last place of foreign residence was Frankfort, Germany; and that he desired to declare his intention to become a United States citizen in the United States District Court for the Southern District of New York. A Department of Justice form entitled "Certificate of Arrival" was issued for Rudolf and recited that he was admitted to this country for permanent residence.
When Rudolf came to New York in October 1951 he intended to become a citizen of the United States. He discussed the possibilities of working in this country *106 with Paramount but he determined that it was not possible to get a job here. He thought there was a legal requirement that he stay in the United States for 2 1/2 or 3 years in order to become a citizen. After determining that he could not find immediate employment in this country Rudolf decided he could not stay long enough in the United States to meet the residence requirements for citizenship. He did not buy a house or rent an apartment in the United States.
On December 11, 1951, petitioners left New York City by plane for Frankfort. Before he left, Rudolf completed and filed a Department of Justice form entitled "Application for Permit to Reenter the United States." This application form showed that it was to be used by an "alien lawfully admitted to the United States for permanent residence." On this form Rudolf reported his and Melitta's address as 40 West 72d Street, New York City; that the name and address of his employer was Paramount International Films, Inc., 1501 Broadway, New York City; that he intended to be absent from the United States for 1 year, during which time he was going to visit Germany and other European countries as a representative*107 for Paramount International Films, Inc.; and that his address abroad was to be "Frankfort on Main, Friedrich Abert Strasse 48, Germany."
A permit to reenter the United States dated November 28, 1951, was issued to Rudolf. This permit was to expire November 28, 1952.
Melitta and Rudolf were in Neu Isenburg until August 1952 when she left Europe and brought their son, George, to school in the United States. Melitta stayed in this country from August 1952 until about April 1953 when she returned to Neu Isenburg.
By letter dated August 18, 1952, Rudolf made formal request to the Immigration and Naturalization Service for a 6 months' extension of his permit to reenter the United States. In this letter, which was a sworn statement by Rudolf, he stated:
This request for an extension has been made necessary by the fact that my continuous presence in Germany is required by my employers, Paramount International *830 Films, Inc. I am employed by this corporation as a sales executive. * * *
In support of his request, Rudolf enclosed a letter written to him by the continental supervisor for Paramount International Films, Inc., in Paris. The supervisor indicated that this letter was --
*108 in reference to our conversation about your intended return to the United States in order to comply with immigration laws and in order not to overstay the time-limit on your Re-Entry Permit.
Rudolf's permit was extended from November 28, 1952, to May 28, 1953.
Rudolf returned to New York City on March 2, 1953. He brought only personal clothing with him and stayed in a hotel in New York City. Furniture and other personal belongings were left in Neu Isenburg. Before he was to leave the United States he made application for a second permit to reenter this country. In the second application Rudolf indicated that he was an alien lawfully admitted to the United States for permanent residence; that he had arrived in the United States for permanent residence on October 19, 1951; that he had last arrived in the United States on March 2, 1953, at New York City; that his and Melitta's address was 488 Liberty Road, Englewood, New Jersey; that he was going abroad on March 31, 1953, as a representative for his employer, Paramount International Films, Inc.; and that his address abroad would be "Friedrich-Eberstrasse 48, Frankfurt-Main, Germany."
On March 16, 1953, Rudolf was granted a second*109 permit to reenter the United States. This permit was to expire March 18, 1954.
Rudolf left New York City on March 31, 1953, and arrived in Frankfort the next day.
By letter dated January 19, 1954, which was a sworn statement, Rudolf made formal request for a 12 months' extension of his second permit to reenter the United States. This request was in substantially the same form as his request for extension of his first permit.
On February 18, 1954, Rudolf's second permit to reenter the United States was extended to March 18, 1955.
Melitta again came to the United States in March 1954 and remained in this country through November 1956, when she became a citizen of the United States. She returned to Europe in December 1956 and has remained there living with Rudolf to date.
Rudolf came to New York City again on March 4, 1955, and stayed until March 25. On March 7, 1955, he completed and filed a third application for a permit to reenter the United States. In this application he again indicated that he was an alien lawfully admitted to the United States for permanent residence; that he had arrived for permanent residence on October 19, 1951; that his last arrival was on March 4, 1955; *110 that his address was "c/o Paramount Pictures, 1501 *831 Broadway, New York City"; and that he was going abroad on business for about 2 years for Paramount International Films, Inc.
On March 8, 1955, a third permit to reenter the United States was issued to Rudolf. This permit was to expire March 9, 1956.
On March 25, 1955, Rudolf left New York City to return to Frankfort.
On January 12, 1956, Rudolf wrote the Immigration and Naturalization Service and by sworn statement made request for a 12 months' extension of his permit to reenter the United States. He again stated that his employer needed him in Germany and submitted a letter from the continental supervisor for Paramount International Films, Inc., in Paris, in support of his request. Rudolf's sworn statement and the letter which he attached were much like the ones previously submitted to obtain extensions of his permits to reenter the United States.
In February 1956 Rudolf was transferred to Vienna by his employer. His permit to reenter the United States was permitted to expire, and Rudolf was granted Austrian citizenship in 1957 and was issued an Austrian passport.
Petitioners have been living together in Vienna since*111 Melitta's return to Europe in December 1956. They have not lived apart from each other during the years discussed above because of marital difficulties. At the time the depositions were taken Melitta would have liked to come to the United States permanently but she could not since Rudolf was in Vienna. Rudolf had no intention of becoming a citizen of the United States at that time.
Petitioners' son, George, attended Staunton Military Academy, Staunton, Virginia, and later the University of Alabama for a few months. He then joined the United States Air Force. He married in 1958. In 1960 he was attending the Latin American Institute in New York City.
Rudolf was physically present in the United States only during the periods October 19 to December 11, 1951, March 2 to March 31, 1953, and March 4 to March 25, 1955. He stayed in a hotel in New York City on each of these occasions and at no time did he maintain an apartment or home in the United States. No part of Rudolf's income for the taxable years 1952 through 1955 was from sources within the United States.
OPINION.
On their joint returns filed for the years 1952 through 1955, petitioners computed the Federal income tax on their*112 entire net or taxable income and claimed a
Petitioners' argument is that even though Rudolf intended to become a citizen of the United States when he first came here in October of 1951 he abandoned that intention soon after arriving when he found he could not get a suitable job here, *114 and that he never established a residence or became a resident of the United States. They also contend that even if Rudolf became a resident in 1951, he abandoned that residence when he left the United States in December 1951 and never reestablished residence in this country.
Respondent's position is that when Rudolf first came to this country in 1951 with the intention of becoming a citizen and permanent resident of this country, he became a resident alien at that time, and did not abandon that residence by his absences from this country during the years 1952 through 1955, as evidenced by his keeping valid reentry permits in existence during the entire periods he was absent from this country until he was transferred to Austria in 1956.
In support of his position respondent relies on section 39.211, Regs. 118, defining "nonresident alien individuals" and providing rules of evidence for determining whether an alien has acquired residence in the United States, on
The first question we must decide here is whether Rudolf ever became a resident of the United States, because if he did not his income is not taxable. Section 39.211-2, Regs. 118, provides in part that a "nonresident alien individual" is a person whose residence is not within the United States, that an alien actually present in the United States who is not a mere transient or sojourner is a resident of the United States for purposes of the income tax, and that whether he is a transient*116 is determined by his intentions with regard to the length and nature of his stay. Section 39.211-4 of the regulations establishes rules of evidence for determining whether an alien has acquired residence, and provides first that an alien, by reason of his alienage, is presumed to be a nonresident alien. It provides further that such presumption may be overcome by --
(2) * * * (i) proof that the alien has filed a declaration of his intention to become a citizen of the United States under the naturalization laws, * * * or (iii) proof of acts and statements of an alien showing a definite intention to acquire residence in the United States or showing that his stay in the United States has been of such an extended nature as to constitute him a resident.
The quoted provisions of the regulations merely indicate the type of proof that will be considered in determining whether the presumption of nonresidence has been overcome and does not, in our opinion, purport to mean that the filing of a declaration of intention alone would establish residence. As we said in
It is obvious from the above definitions [of "resident" *117 in various dictionaries] that a nonresident alien cannot establish a residence in the United States by intent alone since there must be an act or fact of being present, of dwelling, of making one's home in the United States for some time in order to become a resident of the United States. Some permanence of living within borders is necessary to establish residence. * * *
The term "residence" for purposes of determining whether an alien is a nonresident under section 211
From the decided cases, the legislative history of the provisions of the law, and the Commissioner's regulations and rulings some criteria have been established to help determine whether a citizen of the United States is a resident of another country and whether an alien spending some time in the United States has become a resident of the United States. It would be of little value to restate those here, however, because it is settled that the determination of residence must be based upon the facts and circumstances of each particular case. Suffice it to say that although "residence" does not require a permanent home,
We think the evidence in this case indicates that Rudolf never accomplished the establishment of residence in this country even though he may have had it in mind to do so when he first came to this country in 1951. It appears that he came here at the invitation of his employer and with hopes that he could find such employment in the United States that would permit him to live here and become a citizen. That this was only a tentative plan, however, is evidenced by the fact that he did not give up his home in Frankfort but left his furniture, personal effects, and a pet dog there and continued to employ a cook at his German home. This tentative plan failed to materialize when*121 Rudolf found he could not find suitable employment in the United States. For the short period of less than 2 months *835 that he was in New York in 1951 he stayed in a hotel. This was only a temporary arrangement until he could determine whether he would take up residence in this country. Rudolf took no steps to acquire a home or place to live in the United States; he took no part in any community activities and made no effort to become a part of any community; there was no "permanence of living within borders" so far as Rudolf was concerned. It appears that Rudolf's intent to establish residence in the United States was at all times conditional upon his finding suitable employment here and when the condition was not met the intent was abandoned before the fact of residence was ever accomplished.
If Rudolf did not become a resident on his first trip to the United States it seems clear that he did not do so later. The evidence is that Rudolf was present in the United States on only two occasions, each time for less than 1 month, after he left New York in December of 1951, and that these visits were to see his wife and son. On neither of these occasions did he make any effort*122 to acquire a home in this country or to follow up his declaration of intention to become a citizen. He stayed in a hotel on each occasion and brought with him only the clothes necessary for his trip. He maintained his office and his home in Frankfort, and paid German taxes on his income throughout the period here involved. He became a citizen of Austria, his native country, soon after he was transferred there in 1956.
Respondent stresses the fact that Rudolf filed a declaration of intent to become a United States citizen when he first arrived and thereafter kept reentry permits alive at all times until he was transferred to Vienna, and claims that these facts are inconsistent with Rudolf's testimony that he abandoned his hopes of living in America soon after he arrived here. We do not think Rudolf's filing of a declaration of intent within a few days after he arrived in New York is inconsistent with his testimony. Admittedly he came here hoping to become a resident and citizen of the United States. But the filing of the declaration alone did not make him either. And the fact that he obtained reentry permits which stated that he had entered the United States for permanent residence*123 is not inconsistent with his testimony that he kept the reentry permits alive so he could get to this country to see his wife and son. The record indicates no other purpose in his two subsequent trips to the United States; and the statements in the requests for permits that he had originally entered the United States for permanent residence were simply statements of fact.
It is true that petitioners filed joint United States income tax returns for each of the years here involved, which is not permissible for a nonresident alien, but it is also true that attached to each of *836 those returns was a statement wherein Rudolf stated that he was a resident of Germany.
While the documentary and other evidence relied on by respondent indicates that Rudolf originally intended to become a resident of this country and actually entered the country with that thought in mind, and may also support an inference that he kept hopes of eventually becoming a resident alive until he was transferred to Vienna, such evidence does not establish the fact of actual residence in this country, which we believe is necessary before an individual becomes a resident alien for tax purposes. Furthermore we*124 think the conclusion is much more consistent with the admitted facts that Rudolf never abandoned his residence in Frankfort and never took any steps to actually acquire the status of a resident of the United States.
We conclude that Rudolf did not become a resident of the United States in 1951 or at any time thereafter during the years involved and consequently was a nonresident alien within the meaning of
1. The compensation reported from the two Paramount corporations (referred to herein collectively as Paramount) was compensation paid to Rudolf for services performed outside the United States. The compensation reported from other sources was paid to Melitta.↩
2. While the notice of deficiency simply determined that petitioners were resident aliens during each of the years and computed their income tax under the appropriate revenue Code on that basis, respondent points out on brief that under
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