58 T.C. 276 (1972), 5258-70, Dilley v. Commissioner of Internal Revenue

Docket Nº:5258-70.
Citation:58 T.C. 276
Opinion Judge:STERRETT, Judge:
Attorney:Paul Beer and Michael W. Margrave, for the petitioners. Harry Beckhoff, for the respondent.
Case Date:May 11, 1972
Court:United States Tax Court

Page 276

58 T.C. 276 (1972)




No. 5258-70.

United States Tax Court

May 11, 1972

Paul Beer and Michael W. Margrave, for the petitioners.

Harry Beckhoff, for the respondent.

Petitioner has been a legal resident of Arizona since 1935. For 5 months of each year beginning in 1966 and running through 1969 he was employed as a parimutuel manager at a racetrack in Pensacola, Fla. Held, during 1968 petitioner was not temporarily away from home while employed in Pensacola, but rather held recurring seasonal employment which cannot be distinguished from Commissioner v. Flowers, 326 U.S. 465 (1946).


The respondent determined a deficiency in petitioners' Federal income tax of $1,109.59 for the taxable year ended December 31, 1968.

Due to concessions, the only issue remaining for adjudication is whether expenditures incurred by petitioner Franklin C. Dilley are deductible under the provisions of section 162(a)(2), I.R.C. 1954,[1] as traveling expenses while away from home.


Some of the facts have been stipulated. The stipulation together with the exhibits attached thereto are incorporated herein by this reference.

Page 277

Franklin C. Dilley (hereinafter referred to as petitioner) and Katherine Dilley are husband and wife and their legal residence was Phoenix, Ariz., as of the date their petition was filed with the Tax Court. Their joint Federal income tax return for the calendar year 1968 was filed on the cash basis with the district director of internal revenue at Phoenix, Ariz.

Petitioner has been a legal resident of Arizona since 1935, at which time he came to the State because of poor health, namely, pulmonary tuberculosis. He became associated with racing in the Phoenix area in or about 1941, working in part-time positions at horse and dog racetracks. From 1949 through 1959 petitioner worked fulltime at the Arizona tracks, leaving the State only during the summer months to work at neighboring tracks.

In 1960 petitioner commenced full-time employment with the Funk Racing Organization (hereinafter referred to as Funk Racing) as manager of its parimutuel operations. Funk Racing owned five dog tracks, four in Arizona and one in Pensacola, Fla. Petitioner spent the major portion of his time at the Arizona tracks. However, during the summer months he was stationed at the Pensacola track.

In July of 1965, while working in Pensacola, Funk Racing fired petitioner because of a mistaken payoff. Thereafter petitioner returned to Arizona. He attempted to acquire a position with several of the other racetracks through the Arizona Unemployment Commission, but was unsuccessful. He did however acquire a temporary position through a friend at a Las Vegas track, working on weekends for a 3-month period. Petitioner did not seek employment outside the State of Arizona or outside the racing field.

In the spring of 1966 petitioner was approached by the new owners of the Pensacola track. Due to petitioner's prior experience at the Florida track they offered him a position as a parimutuel manager for the 1966 racing season; approximately 5 months, running from May through September. Petitioner exercised no initiative in securing this employment as he had already accepted a previous offer in Lafayette, La. He accepted the offer. Thereupon he and his wife drove to Florida and rented an apartment for the racing season. At the conclusion of the 1966 season petitioner returned directly to Phoenix.

Prior to actually leaving Pensacola petitioner was informally notified by a track official that they would ‘ see him next year.’ In January or February of the following year petitioner received a telephone call confirming his position as parimutuel manager for the 1967 season. It was only after this call that petitioner secured an apartment for the upcoming racing season. Petitioner had no employment in 1966 other than the Pensacola job.[2]

Petitioner returned to Florida with his wife for the 1967 season. At

Page 278

its conclusion he immediately returned to Phoenix. Petitioner was again informally notified of his anticipated employment for the following year. He received a phone call in January confirming the position. He had no other employment during 1967.

Petitioner returned to Pensacola with his wife for the 1968 racing season. He was reimbursed $408 by his employer for expenses incurred in traveling between Phoenix and Pensacola. However, on...

To continue reading