Kowalski v. Comm'r of Internal Revenue , Docket No. 112-73.

• Citation: 65 T.C. 44
• Decision Date: 14 October 1975
• Docket Number: Docket No. 112-73.
• Parties: ROBERT J. KOWALSKI AND NANCY A. KOWALSKI, PETITIONERS v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT
• Court: United States Tax Court

65 T.C. 44

ROBERT J. KOWALSKI AND NANCY A. KOWALSKI, PETITIONERS

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENT

Docket No. 112-73.

United States Tax Court

Filed October 14, 1975.

Carl D. Cordes, Herrick K. Lidstone, and Richard Kilcullen, for the petitioners.

Irwin R. Cohen and Marwin A. Batt, for the respondent.

Held: Amount advanced to petitioner, a New Jersey State trooper, as a meal allowance is includable in his income under sec. 61, I.R.C. 1954, and is not excludable under sec. 119, I.R.C. 1954, since the amount was paid to him in cash. Saunders v. Commissioner, 215 F.2d 768 (3d Cir. 1954), revg. 21 T.C. 630 (1954), is not controlling since it involved years prior to the addition to the Code of sec. 119 providing for exclusion from income of the value of meals furnished for the convenience of the employer on the business premises of the employer. Held, further, petitioner is entitled to deduct the amount he spent for meals while away from home overnight in his duties as a trooper which amount is determined from the facts to be $1,136.

SCOTT, Judge:

Respondent determined a deficiency in petitioners' Federal income tax for the taxable year 1970 in the amount of.$330.70. The issue in controversy is whether $1,697.54 received by petitioner Robert J. Kowalski from the State of New Jersey as a food maintenance allowance constitutes gross income under section 61, I.R.C. 1954;¹ or, if the above amount does constitute gross income, whether it is properly excludable from gross income under section 119; or failing these two, whether petitioners can properly claim an ordinary and necessary business expense deduction under section 162(a)(2) for these amounts.

FINDINGS OF FACT

Some of the facts have been stipulated and are so found. The stipulation of facts, together with the exhibits attached thereto, are incorporated herein by this reference.

Petitioners Robert J. Kowalski (hereinafter petitioner) and Nancy A. Kowalski are husband and wife residing in Clark, N.J., at the time of the filing of their petition herein. Petitioners filed a joint Federal income tax return with the Internal Revenue Service Center, Philadelphia, Pa., for the calendar year 1970.

Petitioner, at all times relevant herein, was a trooper with the Division of State Police of the Department of Law and Public Safety of the State of New Jersey (hereinafter NJSP or State police). He originally joined the NJSP in August 1960 and was reenlisted in 1962 and 1964. During his second term he received tenure, and at all times petitioner was a trooper in good standing with the NJSP

The NJSP, created by act of the New Jersey legislature on March 29, 1921, is responsible statewide for all police functions and has primary responsibility in those areas of the State not within the jurisdiction of local authority. It also assists local police departments in the administration of their affairs.

The executive and administrative head of the NJSP is the superintendent of State police (hereinafter superintendent). He is appointed by the Governor of the State. The superintendent, with the approval of the Governor, makes all rules and regulations for the discipline and control of the State police. The superintendent is authorized to provide for the payment of commutation of rations and quarters (hereinafter meal allowance) to those members of the State police not provided with rations and quarters by the State.

The NJSP, organized along military lines, is headed by the superintendent who holds the rank of colonel. Below him in rank is the deputy superintendent who has the statutory rank of major. The remainder of the State police is comprised of men with the statutory ranks of captain, lieutenant, sergeant, and trooper. In 1970 there were approximately 1,500 people in the NJSP, of whom approximately 900 were troopers.

Prior to July 1949, all troopers were supplied with meals at meal stations throughout New Jersey at the expense of the State. In those instances where a trooper was unable to eat at a meal station, he would secure a meal at his own expense at a public eating place and submit a voucher for reimbursement from the State. Despite various efforts at enforcing this system, it proved unsatisfactory. Troopers would have to leave their posts for approximately an hour and a half to eat these meals leaving their patrol areas unguarded. Efforts aimed at staggering these eating periods proved unworkable and drew complaints from the individuals in charge of the eating stations. Procedures adopted by neighboring States using a meal allowance system were surveyed, and, effective July 1, 1949, the State discontinued its meal operations and instituted a meal allowance system.

This system provided for a daily meal allowance for all members of the State police while they were on active duty. The meal allowance for troopers was set at $70 per month with adjustments made for various nonactive duty situations. By January 1970 the meal allowance rate for troopers was $1,704 per year, ² and by July 1970 this amount was paid without adjustment except for leave for military training. The meal allowance is paid biweekly in advance and is included, although separately stated, with the trooper's salary which is paid in arrears. The meal allowance money is also separately accounted for in the State police's accounting system. Funds are never commingled between the salary and meal allowance accounts. All troopers are entitled to the same meal allowance regardless of years in service or the actual amount of time spent on active duty. Their salaries increase with their length of service.

This system was adopted to provide the State and the public with better police protection. It also proved to be a less expensive method of handling this problem. The meal allowance was not intended to represent additional compensation.

Under this system the troopers are expected to eat at a public eating place within their assigned patrol area. They must first check in with the officer in charge of the station and request permission to eat. The trooper must advise the officer in charge where he may be reached while eating and is subject to call during the eating period. Such calls are not an uncommon experience. Troopers are not permitted to accept any free meals.

There are no restrictions placed on the use of the meal allowance provided to the troopers. They are not required to account to the State for their meal expenses. A trooper may eat at home if it is within his assigned patrol area, or he may bring his own meal and eat in or near his patrol car. The amount of the meal allowance is not calculated to provide reimbursement for any specific number of meals.

On the advertising brochure the meal allowance is described as an item to be received in addition to the base salary. State police recruits are told that the meal allowance will be paid to them in cash and is in lieu of the furnishing of meals they are required to eat while they are on active duty. The meal allowance is also a subject of negotiations between the State and the troopers' union.

Petitioner, in a norman 30-day month, is on active duty 390 hours and is on duty leave 330 hours. The duty leave hours are composed of 6 days off, 10 overnight passes of 15 hours each, and 9 passes of 4 hours each. A trooper is on active duty when he is in uniform performing his official duties. A trooper, however, is on call 24 hours a day and his actual active duty time is determined by the manpower needs of the station to which he is assigned.

It is the policy of the State police to give every man a broad scope of experience by giving him various assignments as operations permit. During calendar year 1970 petitioner had several different assignments.

From January to March 9, 1970, petitioner was assigned to a radar team on the New Jersey Turnpike. He worked a shift, was required to eat his meals on the turnpike, and slept at his then home in Linden, which was approximately 13 miles from his station in Newark.

From March 9 through May 7, 1970, petitioner was assigned to perform general police field duties out of the Hightstown Barracks in central New Jersey which is approximately 42 miles from his home in Linden. While there petitioner was required to sleep at the barracks. His normal active duty period consisted of two consecutive 24-hour periods. During this period petitioner would perform his field patrol duties plus any followup investigative work that occurred. A normal duty day consists of approximately 16 to 18 hours of work. Petitioner generally ate his meals in a public restaurant in his assigned area. Cooking facilities were available if he was allotted time to purchase and prepare his own meal. During this tour of duty petitioner was assigned on two occasions to riot duty of approximately 5 days duration each. On each occasion he was on 24-hour duty, eating and sleeping when and where possible.

From May 7 through June 28, 1970, petitioner was assigned to screen the applications of prospective recruits for the State police. He worked from his home, traveling throughout the State interviewing people in connection with the recruit's application. During this period petitioner slept at home but ate his meals primarily on the road.

From June 28 through the end of the year petitioner was reassigned to the Hightstown Barracks for general police duties. On several occasions he was given special assignments consisting of riot duty, standby status for riot duty, participation in vice raids, observing at State police headquarters, and mandatory inservice training. He did not, in any of these situations, sleep at home or at the Hightstown Barracks.

Petitioner was required to keep a record of his activity for each 24-hour period. Based on these records petitioner spent 200 nights away from home on active duty. While on active duty he spent approximately $2 for breakfast, $3 for lunch, and $5 for dinner. Petitioner, in 1970, spent his...