Fearey v. Commissioner

• Decision Date: 08 March 1982
• Docket Number: Docket No. 12580-78.
• Parties: Kent Fearey and Agnes Fearey v. Commissioner.
• Court: U.S. Tax Court

43 TCM (CCH) 726

1982 TC Memo 113

T.C. Memo. 1982-113.

Kent Fearey and Agnes Fearey v. Commissioner.

Docket No. 12580-78.

United States Tax Court.

Filed March 8, 1982.

Kent Fearey, pro se. Isham B. Bradley, for the respondent.

Memorandum Findings of Fact and Opinion

SCOTT, Judge:

Respondent determined a deficiency in petitioners' income tax for the calendar year 1976 in the amount of $351. The only issue for decision is whether petitioner Kent Fearey is entitled to deduct expenses he incurred in an unsuccessful campaign for the United States Congress.

Findings of Fact

Some of the facts have been stipulated and are found accordingly.

Petitioners, husband and wife, who resided in Oak Ridge, Tennessee, at the time of the filing of their petition in this case, filed a joint Federal income tax return for the calendar year 1976 with the Director, Memphis Service Center, Memphis, Tennessee. Kent Fearey (petitioner) retired in February 1976 from his position as a nuclear materials auditor with the Atomic Energy Commission.

During the taxable year 1976 petitioner expended $2,100 in waging an unsuccessful campaign for election as the congressman from the Third Congressional District in Tennessee.¹ On their Federal income tax return for the calendar year 1976, petitioners claimed as a miscellaneous deduction the amount of $2,100 for expenses related to Mr. Fearey's campaign for election to Congress.

Respondent, in his notice of deficiency, disallowed this claimed deduction with the explanation that the amount was not allowed because it had not been established that the expenses were incurred in a trade or business, constituted ordinary and necessary business expenses or were expended for the purpose designated.

Opinion

It is petitioner's position that he should be allowed his claimed deduction either under section 162² as an ordinary and necessary business expense or under section 212 as an expense incurred for the production of income. He contends that the amounts he expended in connection with his campaign were spent in an effort to obtain a position as a congressman, which would have been a trade or business had he been successful and also would have produced income for him by way of salary.

Petitioner recognizes that in McDonald v. Commissioner 44-2 USTC ¶ 9516, 323 U.S. 57 (1944), the Supreme Court held that campaign expenses incurred in seeking political office are not deductible. His argument is that the better view is that expressed by Justice Black in his dissent in McDonald v. Commissioner, supra, and that it is time this fact was recognized by the Treasury Department, the Internal Revenue Service and the United States Congress.

The holding of the Supreme Court in McDonald v. Commissioner, supra, has on a number of occasions been applied by this Court in disallowing amounts expended by a candidate seeking election to political office, whether the taxpayer was seeking an initial term or re-election. Martino v. Commissioner Dec. 32,790, 62 T.C. 840 (1974); Nichols v. Commissioner Dec. 31,974, 60 T.C. 236 (1973); Maness v. Commissioner Dec. 30,282, 54 T.C. 1602 (1970). In the very recent Court-reviewed case of Diggs v. Commissioner Dec. 37,956, 76 T.C. 888, 895 (1981), involving a different, but somewhat related, issue, we stated:

In McDonald v. Commissioner, 323 U.S. 57 (1944) 44-2 USTC ¶ 9516, the Supreme Court held that campaign expenses of a public

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