Burns v. Gray

• Decision Date: 10 March 1961
• Docket Number: No. 14167.,14167.
• Parties: Carroll E. BURNS and Gladys Burns, Appellants, v. William M. GRAY, District Director of Internal Revenue, Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

287 F.2d 698 (1961)

Carroll E. BURNS and Gladys Burns, Appellants, v. William M. GRAY, District Director of Internal Revenue, Appellee.

No. 14167.

United States Court of Appeals Sixth Circuit.

March 10, 1961.

James T. Carey, Louisville, Ky., for appellants.

Carolyn R. Just, Dept. of Justice, Washington, D. C. (Abbott M. Sellers, Acting Asst. Atty. Gen., Lee A. Jackson, A. F. Prescott and Joseph Kovner, Attys., Dept. of Justice, Washington, D. C., and William B. Jones, U. S. Atty., Louisville, Ky., on the brief), for appellees.

Before McALLISTER, Chief Judge, SIMONS, Senior Circuit Judge, and O'SULLIVAN, Circuit Judge.

McALLISTER, Chief Judge.

The issue in this case is whether appellant taxpayer, Carroll E. Burns, in carrying out the duties of his employment, was entitled to a deduction from income tax, for traveling expenses while away from his home at Williamstown, Kentucky, under the relevant provisions of the Internal Revenue Code. Although Burns and his wife are complainants, the determination of the case depends upon Burns's rights therein. The District Court held that he was not entitled to the claimed deduction, and, from such decision, Burns appeals.

The background of the case is as follows: Burns, a racehorse starter, and racing official, commenced his career by being born in Havre-de-Grace, Maryland, a city noted for having one of the great race tracks of the East. For approximately thirty years, he has been employed as a starter, assistant starter, or patrol judge, at various race tracks throughout the country. Twenty-five years ago, he married a girl of Williamstown, Kentucky, and has continued to reside there and make that place his home ever since. At present he lives there with his wife and her parents, whom he supports, in a home located on three acres of land which he purchased sixteen years ago. He is registered as a voter in Williamstown; he pays his real estate taxes there; and he pays Kentucky income taxes. He files his federal income tax returns with the Director of Internal Revenue in Louisville, the office at which citizens and residents of Williamstown are required to file them; and his federal income tax returns show his address to be at his home, Route 3, Williamstown, Kentucky.

Is Williamstown his home? There can be no question that it is.

Is Burns entitled to a deduction of all ordinary and necessary expenses paid or incurred during the taxable year, in carrying on his trade or business, including traveling expenses (including the entire amount expended for meals and lodging) while away from his home in the pursuit of his business?

Section 162 of the Internal Revenue Code, 26 U.S.C.A. § 162, provides as follows:

"Section 162. Trade or business expenses

"(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, including —

* * * * * *

"(2) traveling expenses (including the entire amount expended for meals and lodging) while away from home in the pursuit of a trade or business;"

In accordance with the foregoing provisions of the statute, Burns is entitled to a deduction of the entire amount which he expends for meals and lodging while away from his home, in the pursuit of his business.

The government contends, since Burns spends more of his time each year in one place than in another, in carrying on his business, and less time at his home than in some of the places where he is obliged to be in order to carry on his business, that the word, "home," as used in the statute, must be interpreted as meaning "business headquarters"; and that his necessary expenses in carrying on his business at such "headquarters" are not entitled to a deduction from income.

It appears that, during the tax year here in question, 1954, Burns, in carrying on his business, spent 72 days at the Oak Lawn Jockey Club track in Hot Springs, Arkansas, from January 16 to March 29; 44 days at the Wheeling Downs Racing Association track in Wheeling, West Virginia, from April 20 to May 30; 85 days at the Wheeling track, from July 11 to October 3; and 26 days at the Wheeling track, from October 30 to November 28. Since 1956, Burns has not been employed at the Wheeling track, but has continued to work as a starter at various other race tracks throughout the country. Other years of his employment as a race-track official further illuminate the nature and conduct...