Duncan v. COMMISSIONER OF INTERNAL REVENUE, Docket No. 24653.
| Citation | 17 BTA 1088 |
| Decision Date | 25 October 1929 |
| Docket Number | Docket No. 24653. |
| Parties | CHARLES E. DUNCAN, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. |
| Court | U.S. Board of Tax Appeals |
Oscar E. Waer, Esq., for the petitionér.
Paul Peyton, Esq., for the respondent.
This is a proceeding for the redetermination of deficiencies in income taxes asserted by the respondent in the amounts of $1,830.56 for the year 1922, and $939.70 for the year 1923. In each instance the deficiency arises from the respondent's disallowance of one-half the amount of deductions claimed by the petitioner as expenses.
FINDINGS OF FACT.
The petitioner was a traveling salesman, working upon a commission basis and paying all of his own expenses. He claimed a residence at the Lafayette Hotel in Buffalo, N. Y., and made his income-tax returns from that city. He had no definite headquarters nor did he maintain any permanent place of abode during the years 1922 and 1923. His wife, because of ill health, lived at a hotel in Excelsior Springs, Mo., a major portion of the time. Occasionally she went to Buffalo, N. Y., and on such occasions the petitioner would also be in Buffalo and use that city as headquarters for the time. The petitioner did not maintain any home in Buffalo, except for his wife while she was there. At such times she had a room in the Lafayette Hotel. Sometimes the petitioner occupied the same room with his wife; at other times he had a separate room at the same hotel. He did not maintain any permanent lodgings in Buffalo but when he and his wife were in that city he secured accommodations at the hotel as any traveler would. Each summer the petitioner spent a month or more at Excelsior Springs, Mo., where he occupied a separate room at the hotel where his wife was living. He made Excelsior Springs his working headquarters during his visits there. The petitioner spent approximately as much time in Chicago as he did in Buffalo, and on each visit to Chicago he secured a room at the Congress Hotel and made that his headquarters for the time being.
The commissions earned by the petitioner amounted to $39,286.87 in the year 1922 and his expenses amounted to $18,528.76. In 1923 the figures were: earnings, $30,973.32; expenses, $16,501.50. These expense amounts included hotel lodgings and meals throughout each year, and laundry, as well as railway fare, entertainment of customers, telephone charges, etc. The petitioner transacted a large part of his business by telephone and his long-distance bills amounted to approximately $370 per month on an average. The above expense amounts did not include expenditures for or on behalf of the petitioner's wife, but they do include his own living expenses while he was in Buffalo.
The only question presented in this proceeding is whether the petitioner is entitled to deduct the full amount of his expenses as set forth in the findings of fact. The respondent has determined that only one-half the expenses are deductible.
The Revenue Act of 1921, in section 214 (a) (1), provides that there shall be allowed as deductions:
All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, * * * traveling expenses (including the entire amount expended for meals and lodging) while away from home in the pursuit of the trade or business.
Section 215 (a) (1) of the same Act prohibits any deduction "in respect of personal, living, or family expenses."
The evidence clearly shows that the petitioner did not maintain any permanent place of business during the years 1922 and 1923. He visited various cities, from Denver to Atlanta, New York, and New England; from the Great Lakes to points in Texas. And wherever he stopped, there his headquarters were for the time being.
Concerning his residence, which he alleges was in Buffalo, the petitioner testified thus:
Q. In 1922 and 1923 did you have a home in Chicago?
A. No, sir.
Q. What was your home address at that time?
A. As stated, Mrs. Duncan spent six or seven months a year at Excelsior Springs and I really had no headquarters myself except the time she was back in Buffalo when I would come there and use that as headquarters the same as if I worked there, working out of headquarters there the same as I worked out of headquarters at Chicago or some other point over a period of time.
Q. Did you maintain a home at Buffalo?
A. Only for Mrs. Duncan when she was there.
Q. Where was that home?
A. At Lafayette Hotel.
Q. Did you maintain an apartment there the year around?
A. No, sir.
Q. You merely rented a room?
A. Yes, sir.
Q. When Mrs. Duncan was in the city?
A. Yes, sir.
Q. Did you occupy that room with her in Buffalo?
A. When I would go there I would probably change to the quarters she had, and at times I would also have a separate room.
Q. At times you would also occupy the same room?
A. Yes, sir.
This evidence is not sufficient, in our opinion, to establish the fact of a home in Buffalo. But even if that fact were established, it is clear from the statute that the petitioner could not deduct his expenditures for meals, lodging, and the like, while he was in that city; and as he offers no evidence to show what part of his time was spent in Buffalo we would have no basis on which to compute deductions other than those which the respondent has already allowed.
A similar question arose in Mort L. Bixler, 5 B. T. A. 1181, where it appeared that the taxpayer resided in Mobile, Ala., carried on no trade or business there, but was employed on a salary to conduct fairs and expositions in various places. In disallowing the claim...
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