Jellinek v. Comm'r of Internal Revenue, Docket No. 71101.
| Decision Date | 11 August 1961 |
| Docket Number | Docket No. 71101. |
| Citation | 36 T.C. 826 |
| Parties | RUDOLF JELLINEK AND MELITTA JELLINEK, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. |
| Court | U.S. Tax Court |
OPINION TEXT STARTS HERE
David G. Sacks, Esq., for the petitioners.
Paul D. Barker, Esq., for the respondent.
Rudolf Jellinek, a former Czech citizen but stateless during the years involved, was living in Frankfort, Germany, working for Paramount, prior to 1951. He came to the United States on October 19, 1951, at the invitation of his employer, bringing only enough clothes for traveling and leaving his furniture and other belongings in his home in Frankfort. Shortly after arriving in New York Rudolf filed a declaration of intention to become an American citizen. Upon finding that he could not obtain satisfactory employment in this country, Rudolf returned to Frankfort on December 11, 1951, after first obtaining a permit to reenter the United States. Rudolf returned to the United States on two occasions from 1952 until 1956, each time for less than 1 month, to see his wife and son who were in the United States at the time. Rudolf was transferred by his employer to Vienna, Austria, in 1956, after which he became a citizen of Austria. Held, Rudolf did not establish residence in the United States and was a nonresident alien during the years 1952 through 1955 so that his income from sources without the United States was excludible from petitioners' gross income under sections 212(a), I.R.C. 1939, and 872(a), I.R.C. 1954.
Respondent determined deficiencies in income tax against petitioners for the taxable years 1952, 1953, 1954, and 1955 in the respective amounts of $4,458.69, $4,155, $4,225.17, and $3,550.12.
The sole issue is whether petitioner Rudolf Jellinek (hereinafter referred to as Rudolf) was a nonresident alien during the period 1952 through 1955.
The evidence consisted of a stipulation of facts with exhibits attached and the depositions of the two petitioners taken in Vienna, Austria, on written interrogatories and cross-interrogatories.
The stipulated facts are found as stipulated.
Petitioners are, and at all times during the period here involved were, husband and wife. They filed timely joint Federal income tax returns, Form 1040, for the taxable years 1952, 1953, 1954, and 1955 with the district director of internal revenue at Newark, New Jersey. On each such return petitioners reported that their home address was ‘c/o C. A. Greenleaf, 488 Liberty Road, Englewood, New Jersey.’
On their returns for the above years, petitioners reported the following compensation received, which was the only income reported:1
Petitioners did not report any itemized deductions and did not claim the standard deduction on any return for the years 1952 through 1955. For each of those taxable years petitioners computed net or taxable income as reported on their joint returns by subtracting $1,800, representing the credit for personal exemptions for each of them and their one child, from the total income reported.
With each of the returns filed for the above years petitioners attached Treasury Department Form 1116 entitled ‘Statement in Support of Credit Claimed by Individual For Taxes Paid or Accrued to a Foreign Country or a Possession of the United States.’ This form was filed each year to support petitioners' claim for credit for the German tax on wages and the Berlin emergency contribution (Notopfer) which had been collected in each year from the salary paid Rudolf by Paramount. On each Form 1116 it was reported that Rudolf was a resident of Germany.
Rudolf paid German tax on wages and the Berlin emergency contribution (Notopfer) on the compensation paid him by Paramount in the taxable years involved in the following amounts (expressed in dollars):
+-------------------------------+
¦Year ¦Total German tax paid ¦
+------+------------------------¦
¦1952 ¦$7,426.45 ¦
+------+------------------------¦
¦1953 ¦7,059.40 ¦
+------+------------------------¦
¦1954 ¦6,974.20 ¦
+------+------------------------¦
¦1955 ¦6,219.20 ¦
+-------------------------------+
On their returns for the above years petitioners claimed a credit for tax paid to a foreign country in the following amounts:
+------------------------+
¦Year ¦Credit claimed ¦
+------+-----------------¦
¦1952 ¦$7,426.45 ¦
+------+-----------------¦
¦1953 ¦7,059.40 ¦
+------+-----------------¦
¦1954 ¦6,833.17 ¦
+------+-----------------¦
¦1955 ¦5,751.46 ¦
+------------------------+
In the statutory notice giving rise to this proceeding, respondent allowed in each year the total German taxes paid as deductions from petitioners' adjusted gross income but disallowed the claimed credit for foreign taxes paid.
Rudolf was born June 13, 1892, in Vienna, Austria. Melitta was born in 1910 in Prague, Czechoslovakia. Prior to World War II, Rudolf was a citizen of Czechoslovakia. In 1948 or 1949 he ceased to be a Czech citizen and in 1957 became a citizen of Austria. During the intervening years he was a stateless person. During the years Rudolf was a stateless person he traveled on a passport issued by the International Refugee Organization (IRO).
At the time of trial petitioners lived in Vienna, Austria. Rudolf was working in Vienna as assistant to the manager of American Films Export Association, which is connected with Paramount Pictures, Inc. He had been connected with Paramount since 1925. From 1945 to 1956, when he was transferred to Vienna, Rudolf was general manager for Germany for Paramount or its related companies. His office was in Frankfort, Germany.
Sometime before 1951 petitioners rented and furnished a 5-room house in Neu Isenberg, Germany, near Frankfort. Rudolf paid 500-marks-per-month rent for the house and he maintained this house until he was transferred to Vienna.
Paramount asked Rudolf to come to the United States in October 1951 and paid for his trip to New York. Melitta entered the United States on September 19, 1951, at New York City. Rudolf came to the United States for the first time on October 19, 1951. He received an American immigrant visa in Frankfort. On this visit Rudolf brought only enough clothing for the trip by air and he and Melitta stayed at a hotel in New York City. He left his cook and a pet dog in the rented house in Neu Isenberg.
Under date of October 24, 1951, Rudolf completed and filed a United States Department of Justice form entitled ‘Application for a Certificate of Arrival and Preliminary Form for a Declaration of Intention,‘ in which he reported that his place of residence was Hotel Bancroft, 40 West 72d Street, New York City; that he entered the United States for permanent residence on October 19, 1951; that since such lawful entry for permanent residence he had not been absent from the United States; that his last place of foreign residence was Frankfort, Germany; and that he desired to declare his intention to become a United States citizen in the United States District Court for the Southern District of New York. A Department of Justice form entitled ‘Certificate of Arrival’ was issued for Rudolf and recited that he was admitted to this country for permanent residence.
When Rudolf came to New York in October 1951 he intended to become a citizen of the United States. He discussed the possibilities of working in this country with Paramount but he determined that it was not possible to get a job here. He thought there was a legal requirement that he stay in the United States for 2 1/2 or 3 years in order to become a citizen. After determining that he could not find immediate employment in this country Rudolf decided he could not stay long enough in the United States to meet the residence requirements for citizenship. He did not buy a house or rent an apartment in the United States.
On December 11, 1951, petition...
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