DocketNumber: Docket No. 4818-76
Citation Numbers: 1981 U.S. Tax Ct. LEXIS 118, 76 T.C. 888
Judges: Nims,Tannenwald,Ekman,Fay,Wilbur,Chabot
Filed Date: 6/4/1981
Status: Precedential
Modified Date: 1/13/2023
1981 U.S. Tax Ct. LEXIS 118">*118
Petitioner, a Member of Congress in 1972, incurred traveling expenses in connection with his attendance at the Democratic National Convention and meetings of the National Black Political Conference in that year.
76 T.C. 888">*888 Respondent determined the following deficiencies and additions to tax:
Additions to tax | ||
Year | Deficiency | under sec. 6651(a) 1 |
1971 | $ 3,448.16 | $ 862.04 |
1972 | 5,767.12 | 1,304.78 |
Concessions having been made, the substantive issues remaining for decision are:
(1) Whether unreimbursed travel expenses incurred by a U.S.Congressman in connection with his attendance at meetings of the National Black Political Conference in 1972 are deductible as ordinary and necessary business expenses under
(2) Whether the unreimbursed travel expenses incurred by the Congressman in connection with his attendance at the 1972 National Democratic Party Convention are deductible as ordinary and necessary business expenses under
76 T.C. 888">*889 FINDINGS OF FACT
Some of the facts have been stipulated by the parties and are found accordingly. The stipulation of facts and the exhibit attached thereto are incorporated by this reference.
Petitioners resided in Detroit, Mich., at the time they filed their petition herein. Janet H. Diggs, the wife of Charles1981 U.S. Tax Ct. LEXIS 118">*124 C. Diggs, Jr., is a party to this proceeding only by virtue of having filed joint Federal income tax returns with her husband for the years at issue. Mr. Diggs will be referred to herein as the petitioner.
During 1972 (the only year remaining in issue after the above-mentioned concessions), petitioner was a Member of the U.S. House of Representatives. He represented the 13th Congressional District of Michigan, which includes the city of Detroit. Petitioner served on the House Committee on Foreign Affairs and the House Committee on the District of Columbia.
Petitioner played a significant role at the Democratic National Convention held in Miami, Fla., in 1972. He was an official voting delegate to the convention and was Chairman of the Minorities Division of the Democratic National Committee. He served as the principal host, not only for the minority delegates, but also for other people who had similar concerns and who came to the convention. He participated in various discussions and strategies to try to achieve a favorable response to the petitions of the minority groups before the Platform Committee, the Credentials Committee, and the Rules Committee. The views of the various1981 U.S. Tax Ct. LEXIS 118">*125 individuals had to be assessed to determine their feasibility, and there was an investigative aspect to this.
The National Black Political Conference was a nonpartisan group with approximately 10,000 people in attendance at its assembly held in Gary, Ind., on March 10 through 13, 1972. One of the reasons petitioner attended meetings of the National Black Political Conference was to make an assessment of the concerns of black citizens in the United States and to develop a national black agenda regarding those concerns. The conference was not a nonprofit exempt organization.
The agenda published by the National Black Political Conference was presented to the platform committees of the National Democratic Party and National Republican Party Conventions in 1972. Petitioner appeared before the platform committee of 76 T.C. 888">*890 the Democratic National Convention in support of the agenda published by the National Black Political Conference.
Growing out of the National Black Political Conference, of which petitioner was one of three co-conveners, was a permanent organization which came to be known as the National Black Assembly.
At the time of the trial of this case, petitioner ranked 19th1981 U.S. Tax Ct. LEXIS 118">*126 out of 435 Members of the House of Representatives and was the senior ranking delegate from Michigan. He was also, in his words, "the senior member of Congress who happens to be black."
Certain of petitioner's constituents attended the Democratic National Convention in Miami and the meetings of the National Black Political Conference. Petitioner believed that his attendance and participation helped in having the views of his constituents represented.
Petitioner expended $ 1,303 for travel expenses, including meals and lodging, for attendance at meetings of the National Black Political Conference. In addition to the above-mentioned Gary meeting, this organization held meetings in various cities, as follows:
Feb. 20, 1972 | Muskegon Heights, Mich. |
Feb. 25, 1972 | Chicago, Ill. |
Feb. 28, 1972 | Cleveland, Ohio |
Apr. 10, 1972 | Chicago, Ill. |
Apr. 16, 1972 | New York City, N.Y. |
June 24, 1972 | Las Vegas, Nev. |
Aug. 4, 1972 | Chicago, Ill. |
Oct. 10, 1972 | Chicago, Ill. |
Oct. 20 through | |
Oct. 22, 1972 | Chicago, Ill. |
Petitioner expended $ 1,083 for travel expenses, including meals and lodging, to attend the Democratic National Convention at Miami, Fla., from July 7 through July 15, 1972.
OPINION
In1981 U.S. Tax Ct. LEXIS 118">*127 1972, petitioner was a Member of Congress, representing the 13th Congressional District of Michigan, which included Detroit. During that year, he incurred $ 1,303 in travel expenses, including meals and lodging, to attend meetings of the National Black Political Conference. In addition, he expended $ 1,083 in 76 T.C. 888">*891 1972 for travel expenses, including meals and lodging, to attend the Democratic National Convention held at Miami, Fla.
Petitioners take the position that the Congressman's primary purpose for attending such meetings was to investigate and ascertain the facts and concerns of minorities in order to better serve his constituents and reflect their views in proposed legislation and as a guide for voting. On this basis, they contend that the expenses were ordinary and necessary business expenses deductible under
Respondent's position is that these costs are not deductible under
At first blush it would appear that somewhere among the myriad categories of deductible travel expenses there should be an appropriate analogue to the instant situation. Judge Brown cataloged some of these in a dissenting opinion in
Deductions have been allowed as "ordinary and necessary" to clergymen attending a church convention; to expenses of an employee attending 76 T.C. 888">*892 conventions of a related business group; to a lawyer attending a meeting of the American Bar Association; to a legal secretary attending the national convention of the National Association; to physicians attending medical conventions; to certified public accountants attending conventions; to university teachers in attending conventions or scientific meetings; to professional cartoonists attending political conventions; to persons attending the Red Cross Convention; to school teachers attending summer school; to attorneys attending an institute on Federal taxation; to employees sent to refresher courses to become more acquainted with new processes in the industry; to a furniture store sending its buyers to the annual furniture mart; to representatives to annual conventions of trade associations; and to an insurance agent away from home on business. [
1981 U.S. Tax Ct. LEXIS 118">*130 To draw an analogy, however, between petitioner's situation and any of the foregoing would be to blur the line of distinction between petitioner's respective positions as a political figure and as a Member of Congress. Only those expenses incurred in the latter capacity and directly related to the performance of the functions of that office are allowable under
In connection with convention travel expenses,
Expenses paid or incurred by a taxpayer in attending a convention or other meeting may constitute an ordinary and necessary business expense under
76 T.C. 888">*893 Of course, the last sentence of this regulation does not bar the travel expense deduction of a taxpayer who attends a political convention for purposes directly related to his trade or business rather than for political purposes. The Board of Tax Appeals held to this effect in
As previously noted, respondent maintains that
1981 U.S. Tax Ct. LEXIS 118">*134 The House report referred to above points out that
The House report also provides that "the expenses may not be in connection with legislative matters such as nominations, etc., but rather must be in connection with
In
With regard to his activities at the Democratic National Convention, petitioner testified, in part, as follows:
Q. Now, at the Democratic Convention, in 1972, in Florida, what role did you play at that convention?
A. Well, I was Chairman of the Minorities Division, which is a statutory division of the Democratic National Committee. And, in that capacity, I served as the supervisor of the office at the convention, as the principal host for not only the delegates but other people who had similar concerns and came to the convention, and participated in various discussions and strategies to try to achieve a favorable response to the petitions of the minority groups before the Platform Committee, the Credentials Committee, and the Rules Committee.
Q. Now, as a host, did you investigate and gather1981 U.S. Tax Ct. LEXIS 118">*138 facts necessary to aid you in your congressional duties?
A. Well, the whole process involved an exchange of views and diaglogue, and investigations of issues among those that were there. It was not a monolithic group. They came from all over the country. They had various 76 T.C. 888">*896 points of view. These views had to be assessed, to determine their feasibility, and there was a certain obvious investigative aspect to this, as part of the guidance and leadership procedure, that I had to provide.
Q. And as a result of gathering this data, it aided you in your support of legislation that you ultimately voted on?
A. Well, the Platform Committee, in essence, is the repository for prospective legislation that would engage the party at the national level. And in that sense, those concerns, particularly since that party was the majority party in the Congress, that raised the level of its importance in terms of legislative concerns and prospective legislation, and much legislation did come as a direct result of the party's adherence to the planks of the platform.
With regard to his activities at the National Black Political Conference, petitioner testified, in part, as follows, on direct1981 U.S. Tax Ct. LEXIS 118">*139 examination:
Q. And what was the main purpose of the National Black Political Conference?
A. Well, it was for the purpose of making an assessment of the concerns of black citizens here in the United States and beyond, because we did take up several issues involved in international relations. And to develop an agenda -- which was developed -- a national black agenda which itemized domestic concerns and international concerns. This was put in a published form. It was sent to the principals of both parties, and was the basis upon which the Congressional Black Caucus, which had also been organized in 1972 -- it served as a basis for a large part of their agenda, in carrying out their legislative duties.
Petitioner also testified, in part, as follows, on cross-examination:
Q. And we have stipulated that there were some of the meetings that continued into October of which there was an assembly in Chicago, Illinois. Was there any -- did this convention and assembly in October, 1972, was it part of the action of this National Black Political Convention to advise the public, blacks and whites, of the principles and purposes of the National Black Political Conference and of the minority1981 U.S. Tax Ct. LEXIS 118">*140 which they represented?
A. That's correct. We had an educational job to do, because we knew that without public opinion behind us, that the possibility of attaining certain objectives could be frustrated, and so therefore, in that sense, we sought to disseminate our objectives, you know, beyond our own community, and to form alliances with anyone beyond that who would support our common objectives. Because we called it a National Black Convention, and it was, in that sense, black, in that kind of participatory fashion, but it -- really, the objectives are related to the disadvantaged, which obviously went beyond that.
The real thrust of petitioner's argument is that the principal motivation for his travel expenses was investigative, relating to the performance of the functions of his public office, rather than 76 T.C. 888">*897 political. He points out that the Fourth and Ninth Circuit Courts of Appeal have allowed travel expenses of Foreign Service officers who are required by law to return periodically to the United States from abroad to renew touch with the American way of life and so become better representatives of this country abroad:
Petitioners also strongly urge that we apply to the facts of this case the rationale of the Ninth Circuit's holding in
In
Petitioners also cite
The allowance of deductions for convention expenses as business expenses will depend upon whether the relationship between the taxpayer's trade or 76 T.C. 888">*898 business and his attendance at the convention is such that by his attendance he is benefiting or advancing the interests of his trade or business.
One method of determining whether such a relationship exists is to compare the individual's duties and responsibilities of his own position with the purpose of the meeting as shown by the program or agenda. If personal and business purposes are both involved, a proper allocation must be made in accordance with
Basically, respondent's position is that petitioner's activities, both with respect to the Democratic National Convention and the National Black Political Conference, were political in nature and not sufficiently related to his congressional functions so as to render them deductible.
We think petitioners have failed to show that the expenses for which deduction is sought are so directly related to the functions of the Office1981 U.S. Tax Ct. LEXIS 118">*144 of Congressman as to permit the allowance of the deduction. With regard to the Democratic National Convention, the very raison d'etre for holding the convention was to convene a meeting of the delegates for the purpose of formulating a platform and selecting candidates for the Offices of President and Vice President. Such an assemblage is quintessentially political. While petitioners concede, sub silentio perhaps, that this is so, they nevertheless urge that the Congressman participated qua Congressman rather than as a delegate per se. We have found as a fact that petitioner was an official delegate to the convention and as such he of course was privileged to participate in and vote upon the candidate selections and formulation of a party platform.
Petitioner testified at some length as to the investigate and collating-of-views activities relating to the interests of minority citizens, which included many of his congressional constituents, in which he engaged at the convention. However, as petitioner's testimony makes clear, the Platform Committee, on which he served as a delegate and not in his official capacity as a Congressman, "in essence, is the repository for prospective1981 U.S. Tax Ct. LEXIS 118">*145 legislation
Petitioners' argument that the foregoing constitute "business" activities on the Congressman's part must furthermore fail on two counts: they were not undertaken in direct connection with submissions to committees or individual Members of Congress, and they were not engaged in with respect to any specific legislation or proposed legislation. A laundry list of general objectives, such as the aforementioned agenda represented, does not meet the test of "bills and resolutions" and "proposals for legislative action submitted to the legislative1981 U.S. Tax Ct. LEXIS 118">*146 body" contained in section 1.162-20(c)(2)(ii)(
While petitioners might also argue that
Petitioners' 1981 U.S. Tax Ct. LEXIS 118">*147 reliance upon the
Nor can petitioners rely on
Neither the
We accordingly conclude that petitioner's travel expenses incurred in connection with his attendance at the Democratic National Convention must fail as deductions for two reasons. Primarily, because his activities there, 1981 U.S. Tax Ct. LEXIS 118">*149 commendable as they might have been, were essentially political in nature and not sufficiently related to the functions of his Office as Congressman; i.e., his trade or business.
Secondarily, since petitioner has failed to meet the threshold test of showing that the expenses incurred were incurred in connection with petitioner's trade or business, they cannot be allowed as expenses incurred in connection with appearances, etc., with respect to legislation under
Petitioner's expenses incurred in connection with the National Black Political Conference are, for the same reasons, nondeductible. Petitioner, in his testimony, expressly emphasized the political purpose of this organization and insisted that it developed its agenda for the purpose of influencing the party platform of the Democratic National Party and, to an apparently lesser extent, the Republican National Party. If anything, the nature of the National Black Political Conference rendered petitioner's activities there one step closer to grass root campaigning and one step further removed from1981 U.S. Tax Ct. LEXIS 118">*150 the functions of his public office.
For the foregoing reasons, we hold that petitioner's travel expenses paid or incurred in connection with his attendance at the Democratic National Convention or the National Black Political Conference are not deductible under
To reflect the foregoing and concessions by the parties,
Tannenwald,
The history of the treatment of campaign and other expenses relating to the election process and other activities1981 U.S. Tax Ct. LEXIS 118">*152 designed to influence elected legislative bodies, culminating in the enactment of
I am fully cognizant that the determination of what constitutes an "ordinary and necessary" business expense within the meaning of
Fay,
The1981 U.S. Tax Ct. LEXIS 118">*154 majority essentially adopts respondent's position these expenses were "political in nature," without clearly stating just what that means. The truth of the matter is that the term "political" describes many things. Petitioner was a Member of the U.S. House of Representatives. The term "political" describes petitioner's activities as a legislator, as a policymaker, as the representative of his constituents, as a candidate, and as a member of his political party. Together, all of these activities made up petitioner's "trade or business." However, because these different roles have different tax consequences, each may be considered as a separate "trade or business" for tax purposes.
The Supreme Court adopted this approach in
Petitioner attended two conventions.
The allowance of deductions for such expenses ["expenses paid or incurred by a taxpayer in attending a convention"] will depend upon whether there is a sufficient relationship between the taxpayer's trade or business and his attendance at the convention or other meeting so that he is benefiting or advancing the interests of his trade or business by such attendance. If the convention is for political, social or other purposes unrelated to the taxpayer's trade or business, the expenses are not deductible. 1
Thus, the issue is whether attendance at a convention furthers the taxpayer's trade or business. As noted by the majority, the second sentence of the regulation quoted above in no way denies deductions for political conventions per se; the sentence merely restates the requirement that attendance advance the taxpayer's trade or business. Majority opinion,
1981 U.S. Tax Ct. LEXIS 118">*157 Accordingly, resolution of the issue presented in this case depends upon what petitioner actually tried to accomplish by attending the Democratic National Convention and the National Black Political Conference. If petitioner was pursuing legislative aims, his expenses were incurred in his trade or business as a legislator and were therefore deductible. 2 If, on the other hand, petitioner's primary purpose was to advance his own political career or to enhance the electoral prospects of his party, then his expenses would be campaign related and nondeductible. It is 76 T.C. 888">*905 important to recognize that petitioner's attendance at the Democratic National Convention as a delegate is not determinative. In
An individual who can bring his case within the provisions of
In short, the question is not whether political conventions are "political" -- the relevant issue is what was
Moreover, this is precisely the way in which respondent analyzed this issue in
In the instant case, the primary purpose of the convention was to plan strategy and advance the political programs of the party. Thus, the legislator's attendance at the convention as a participant on the law enforcement panel was related to the formulation of the political party's policy on specific issues and not directly connected with the taxpayer's business as a legislator.
The salient factor relied upon above is not the "political" nature of the convention. The ruling focuses on the purpose of the legislator's participation. If he had been doing something else, the result presumably could have been different.
All of the facts found by the majority in the instant case lead me to conclude petitioner was pursuing legislative goals at both conventions he attended. The purpose of the National Black Political Conference was "to make an assessment of the concerns of black citizens in the United States and to develop a national1981 U.S. Tax Ct. LEXIS 118">*160 black agenda regarding those concerns." Majority opinion,
Although the situation is somewhat more complex, I would reach the same result with respect to petitioner's expenses for attending the Democratic National Convention. Under
Finally, I do not see that
I believe the majority has erroneously denied petitioner the deduction of expenses incurred by him in the course of formulating, proposing, and enacting legislation. As I have indicated, I think the majority went astray by failing to examine critically the term "political." The result reached by the majority, that all "political" expenses are nondeductible, seems to me to run counter to both commonsense and the express statutory mandate of
Chabot,
The majority hold that both categories of Diggs' expenses are nondeductible because Diggs' activities at the meetings and1981 U.S. Tax Ct. LEXIS 118">*164 the convention "were essentially political in nature" and because they were "not sufficiently related to the functions of his Office as Congressman." Majority opinion,
I would hold that Diggs' expenses in connection with his attendance at the meetings of the National Black Political Conference are deductible as ordinary and necessary expenses of 76 T.C. 888">*908 his trade or business as a Member of Congress. I would hold that Diggs' expenses in connection with his attendance at the Democratic National Convention are nondeductible because petitioners have failed to show that such attendance was not inextricably intertwined with political campaigns on behalf of candidates for public office, following
Diggs' work as a Member of Congress in 1972 constituted a trade or business (
The nature of this trade or business may be gleaned from an inspection of
I have found no legal imperative forbidding individual Members from learning about the problems or concerns of their constituents or others; such efforts by a Member may constitute activities conducted in the course of the Member's trade or business qua Member. Indeed, we have recently held that it is part1981 U.S. Tax Ct. LEXIS 118">*166 of the trade or business of a State legislator to discuss the issues with, and ascertain the needs of, the voters in his district.
In
1981 U.S. Tax Ct. LEXIS 118">*167 We may take it that performance of the functions of one's public office is apt to affect one's likelihood of reelection, especially where the officeholder seeking reelection must face the voters' verdict every 2 years (
The parties have stipulated that Diggs attended 10 meetings of the National Black Political Conference in 1972. Only the first of these meetings (in Muskegon Heights on Feb. 20, 1972) was held in Michigan, the State from which Diggs was elected and in which Diggs ran for reelection in 1972. The majority have found that this organization's assembly was held in Gary, Ind., on March 10 through 13, 1972, and that, of the other eight meetings, five were held in Illinois and one each in Ohio, New York, and Nevada. The majority have found that "One of the reasons [Diggs] attended meetings of the National Black Political Conference was to make an assessment of the concerns1981 U.S. Tax Ct. LEXIS 118">*168 of black citizens in the United States and to develop a national black agenda regarding those concerns." (Majority opinion,
Investigation of problems faced by people, examination of ways of meeting such problems, identification of those aspects of solutions that may usefully be pursued through the body politic, and education of colleagues and potential colleagues as to such problems and solutions (especially those that would involve the Congress taking or avoiding certain actions) -- these fairly describe the constitutional role of a Member of Congress. See
Diggs' attendance at the Democratic National Convention from July 7 through 15, 1972, must be viewed in a different light. This convention selected the Democratic Party's nominees for President and Vice President in the election to be held less than 4 months later. 5 The convention also adopted a party platform, a program intimately connected with the then-upcoming election. Such a national platform, although tied most closely to a party's nominees for President and Vice President, also is part of the picture in the election campaigns of that party's nominees for the other national offices -- Members of the U.S. Congress.
1981 U.S. Tax Ct. LEXIS 118">*170 The majority have found that Diggs was a voting delegate to the 1972 Democratic National Convention and that he "played a significant role" there. The news media of the Nation focused on the convention. The context of the convention was the then-upcoming election of our National Government. It is difficult to 76 T.C. 888">*911 imagine how a candidate for election to the U.S. Congress in 1972 could participate officially and "play a significant role" in the 1972 National Convention of his or her party without such activities being inextricably intertwined with his or her election campaign. Petitioners have not shown any subordination of Diggs' role as a candidate, or any predominance of his trade or business as a Member of Congress, or any way in which we could allocate the $ 1,083 he spent to attend the 1972 Democratic National Convention between his candidacy and his trade or business. I agree with the majority that petitioners are not entitled to deduct this amount.
The majority dispose of petitioners' contentions by describing Diggs' activities, the deductibility of the expenses of which are here in dispute, as "political." Respectfully, I submit that1981 U.S. Tax Ct. LEXIS 118">*171 the unadorned label "political" is neither a useful tool in analysis nor even a convenient conclusory label.
The adjective "political" has a number of accepted meanings, among them the following: (1) Of or pertaining to Government, (2) having a settled system of administration, (3) of or pertaining to the system by which the individuals of a State seek to control the State's public policy, and (4) of or pertaining to those who make a business or profession of politics (Webster's New International Dictionary 1909 (2d ed. 1959)). The term also has taken on many nuances that vary from context to context.
The Congress has used the term "political" in
(2) Limitation. -- The provisions of paragraph (1) [which allow deduction of certain lobbying expenses] shall not be construed as allowing the deduction of any amount paid or incurred (whether by way of contribution, gift, or otherwise) -- (A) for participation in, or intervention in,
In each of these provisions, the Congress' use of the term "political" helps to focus on a limited type of activity. In none of these provisions is the essentially unadorned adjective the basis 76 T.C. 888">*912 of a sweeping malediction. The use of the term in the majority's opinion,
The majority warn that we must not "blur the line of distinction between petitioner's respective positions as a political figure and as a Member of Congress." Majority opinion,
The majority's use of "political" as a test for disallowance of deduction is unfounded in the statute; it neither provides a clue to the decision of future cases nor does it explain the holdings of the instant case; it is wrong.
The majority engage in an extensive discussion of
The majority hold that Diggs' expenses are not deductible under
The majority seek to distinguish
1981 U.S. Tax Ct. LEXIS 118">*175 Lack of success -- or of immediate success -- in one's efforts is not usually thought to automatically forbid a deduction for the expenses of these efforts. Indeed, we specifically rejected respondent's efforts to make prompt success a touchstone, where the expenses were otherwise within
1981 U.S. Tax Ct. LEXIS 118">*176 The ground on which the majority distinguish
Respectfully, I urge that we not ratify respondent's apparent attempt to use the tax laws to deter independent investigations by legislators who do not foresee their efforts producing prompt and favorable results.
Judge Tannenwald, in his concurring opinion, urges us to "stay our hand" because it might be unconstitutional for us to allow any deduction to petitioners, notwithstanding his concession that petitioners may well have satisfied the requirements of the Code.
Firstly, the majority's determination to hold for respondent is no more 1981 U.S. Tax Ct. LEXIS 118">*177 a staying of this Court's hand than would be a holding for petitioners.
Secondly, unequal treatment under the law hardly seems to fit the prescription for constitutional prudence advocated in the concurring opinion. We have neither gathered nor been presented with information from which we could rationally decide whether the commonweal is served by denying Members of Congress deductions available to others. It is
Thirdly, it will be time enough to consider the impact of possible constitutional infirmities in a holding one way or the other when1981 U.S. Tax Ct. LEXIS 118">*178 such constitutional problems are presented to us. E.g.,
1. All section references are to the Internal Revenue Code of 1954, as in effect during the years in issue, except as otherwise expressly indicated.↩
2. The holding in the
3.
(e) Appearances, etc., With Respect to Legislation. -- (1) In general. -- The deduction allowed by subsection (a) shall include all the ordinary and necessary expenses (including, but not limited to, traveling expenses described in subsection (a)(2) and the cost of preparing testimony) paid or incurred during the taxable year in carrying on any trade or business -- (A) in direct connection with appearances before, submission of statements to, or sending communications to, the committees, or individual members, of Congress or of any legislative body of a State, a possession of the United States, or a political subdivision of any of the foregoing with respect to legislation or proposed legislation of direct interest to the taxpayer, or (B) in direct connection with communication of information between the taxpayer and an organization of which he is a member with respect to legislation or proposed legislation of direct interest to the taxpayer and to such organization, and that portion of the dues so paid or incurred with respect to any organization of which the taxpayer is a member which is attributable to the expenses of the activities described in subparagraphs (A) and (B) carried on by such organization. (2) Limitation. -- The provisions of paragraph (1) shall not be construed as allowing the deduction of any amount paid or incurred (whether by way of contribution, gift, or otherwise) -- (A) for participation in, or intervention in, any political campaign on behalf of any candidate for public office, or (B) in connection with any attempt to influence the general public, or segments thereof, with respect to legislative matters, elections, or referendums.↩
4. The Senate version of
5. The Government had argued that the taxpayer should be barred from deducting his expenses as a member of the Senate staff because he did not engage in that activity for profit, an argument rejected by the Court.
1. Accord, majority opinion,
2. "Respondent does not dispute the fact that travel expenses incurred by an elected legislator to attend certain meetings with constituents for the purpose of gathering information with respect to pending legislation would be within the performance of his duties as a legislator, and as such, would be deductible as ordinary and necessary business expenses." Respondent's Reply Brief at 5. See
1.
(a) When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof -- * * * * (26) Trade or business. -- The term "trade or business" includes the performance of the functions of a public office.↩
2.
(a) In General. -- There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, * * *↩
3. As the Court pointed out
4. Although there was no majority opinion in
5. The subsequent replacement of the nominee for Vice President does not alter the focus of this Democratic National Convention.↩
6. Revenue rulings merely indicate the opinion or position of the Internal Revenue Service. E.g.,
7. The majority also refer to a House report on the enactment of
8. See also
Coughlin v. Commissioner of Internal Revenue , 203 F.2d 307 ( 1953 )
David I. And R. Lee Hitchcock v. Commissioner of Internal ... , 578 F.2d 972 ( 1978 )
Gerald W. Frank v. United States , 577 F.2d 93 ( 1978 )
Horace E. And Edith B. Nichols v. Commissioner of Internal ... , 511 F.2d 618 ( 1975 )
C.J.D. Rudolph and Irma M. Rudolph v. United States , 291 F.2d 841 ( 1961 )
James B. Carey and Margaret Carey v. Commissioner of ... , 460 F.2d 1259 ( 1972 )
Lucas v. Alexander , 49 S. Ct. 426 ( 1929 )
McDonald v. Commissioner , 65 S. Ct. 96 ( 1944 )
Bruce Cornwall and Louise B. Stratton v. Commissioner ... , 448 F.2d 1030 ( 1971 )
Nicol v. Ames , 19 S. Ct. 522 ( 1899 )
Rudolph v. United States , 82 S. Ct. 1277 ( 1962 )
Califano v. Yamasaki , 99 S. Ct. 2545 ( 1979 )
Cammarano v. United States , 79 S. Ct. 524 ( 1959 )
Maryland Savings-Share Insurance Corp. v. United States , 308 F. Supp. 761 ( 1970 )
Commissioner v. Tellier , 86 S. Ct. 1118 ( 1966 )
United States v. Maryland Savings-Share Ins. Corp. , 91 S. Ct. 16 ( 1970 )