Huckabay v. COMMISSIONER OF INTERNAL REVENUE

• Decision Date: 01 June 1939
• Docket Number: Docket No. 91824.
• Citation: 40 BTA 9
• Parties: J. E. HUCKABAY AND SYBIL S. HUCKABAY, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
• Court: U.S. Board of Tax Appeals

40 B.T.A. 9 (1939)

J. E. HUCKABAY AND SYBIL S. HUCKABAY, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Docket No. 91824.

Board of Tax Appeals.

Promulgated June 1, 1939.

J. E. Huckabay, for the petitioners.

Wilford H. Payne, Esq., for the respondent.

OPINION.

SMITH:

This is a proceeding for the redetermination of deficiencies in income tax for 1934 and 1935 of $56.97 and $92.66, respectively. The only question in issue is whether the petitioners are liable for income tax upon the salary received by J. E. Huckabay during the years 1934 and 1935 as attorney for the Louisiana Highway Commission.

The petitioners are husband and wife, residing in the Parish of East Baton Rouge, Louisiana, who filed joint income tax returns for 1934 and 1935.

The material facts in this case have been stipulated as follows:

1. The only question presented for decision in this case is whether the compensation received by J. Elton Huckabay, one of the petitioners herein, for the taxable years 1934 and 1935, in the respective amounts of $2,800.00 and $4,200.00, as attorney for the Louisiana Highway Commission of the State of Louisiana, is subject to the Federal Income Tax.

2. On May 1, 1934, J. Elton Huckabay, one of the petitioners herein, who is sometimes referred to hereinafter for convenience as petitioner, was engaged by the Louisiana Highway Commission as an attorney at a monthly salary of $350.00. No oath of office was required of petitioner. There was no stipulation as to the duration of petitioner's services other than that he was to continue from month to month. The engagement of the said J. Elton Huckabay as an attorney was, as to duration, within the exclusive discretion of the Louisiana Highway Commission. Petitioner is still engaged as attorney for the said Louisiana Highway Commission at the same rate of salary and under the same terms and conditions as existed during the taxable years of 1934 and 1935.

3. The said J. Elton Huckabay continued to serve as attorney, in connection with the Louisiana Highway Commission, from May 1, 1934, throughout the year 1935, for which he received as compensation the sum of $2,800.00 for the year 1934 and $4,200.00 for the year 1935. The services rendered by petitioner as attorney for said Commission consisted of attending to such indiscriminate legal matters as arose from time to time. Such services consisted largely of the defense of damage suits growing out of the construction and erection of bridges and highways and the acquisition, by condemnation proceedings or otherwise, of rights of way for the construction of State highways and bridges throughout the State of Louisiana. Petitioner devoted approximately 40% of his time to the work in connection with the Highway Commission during the year 1934, and approximately 30% of his time thereto during the year 1935.

4. The formation of policies in the handling of suits and other legal matters was not delegated to petitioner but was retained by the Louisiana Highway Commission. The said Commission did not exercise control over the details of the petitioner's performance of his services. Upon any difference of opinion the will, as to policy or procedure, of the Commission ultimately controlled. The amount of petitioner's monthly compensation was not directly regulated or determined by the amount of work actually done or the value of the particular services performed during the month.

5. The Louisiana Highway Commission maintains a Legal Department for which it has provided suitably equipped offices. Petitioner, J. Elton Huckabay, was not required to keep any specific office hours or to spend any specific time in the offices of the Legal Department. Petitioner's private office, which was maintained for the practice of law, was located within five (5) blocks of the general offices and the offices of the Legal Department of the Louisiana Highway Commission, and petitioner was readily accessible to the officers and employees of said Commission when in his private office. The office hours customarily adhered to by petitioner in his own private law office were equally as long as those required by the Louisiana Highway Commission.

6. Petitioner was not prohibited by the said Commission from the acceptance of private law practice, and petitioner in fact maintained his private law offices for the practice of his profession on his own account, throughout the taxable years 1934 and 1935. During the taxable year 1934 petitioner, J. Elton Huckabay, realized gross income from the private practice of law in the amount of $5,114.24 from which rent and other related expenses aggregating $558.70 were deducted, leaving a net income from private practice for that year of $4,555.54. This income does not include the compensation received by petitioner as attorney for the Louisiana Highway Commission.

7....