Montgomery v. Comm'r of Internal Revenue

• Decision Date: 17 December 1968
• Docket Number: Docket No. 6434-66.
• Citation: 51 T.C. 410
• Parties: MORRIS C. MONTGOMERY AND FRANCES W. MONTGOMERY, PETITIONERS v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT
• Court: U.S. Tax Court

51 T.C. 410

MORRIS C. MONTGOMERY AND FRANCES W. MONTGOMERY, PETITIONERS

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENT

Docket No. 6434-66.

Tax Court of the United States.

Filed December 17, 1968.

William R. Bagby, for the petitioners.

W. Gerald Thornton, for the respondent.

Petitioners traveled by automobile from Lawrenceburg, Ky., to Rochester, Minn., where medical treatment was received. They paid for meals and lodging en route. Petitioners also paid expenses for a trip to California in connection with the probate of a will. Held, the expenditures for meals and lodging constituted ‘transportation’ expenses deductible under sec. 213(e)(1) (B), I.R.C. 1954. Held, further, amount of deductible automobile expenses determined. Held, further, expenditures for trip to California were not deductible as expenses for the production of income under sec. 212. I.R.C. 1954.

TANNENWALD, Judge:

Respondent determined deficiencies in petitioners' income tax of $210.41 and $192.35 for the years 1961 and 1962, respectively.

After certain concessions by respondent, the remaining issues for 1961 are whether petitioners may deduct, under section 213,¹ the cost of meals and lodging incurred during the course of trips undertaken for the purpose of obtaining medical treatment for Frances Montgomery at the point of destination, the amount of the deductible automobile expense incurred during such trips, and the deductibility of costs of pajamas and of a part-time household worker. The sole issue with respect to 1962 is whether the cost of a trip to California in connection with settling an estate is deductible under section 212.

FINDINGS OF FACT

Some of the facts are stipulated and are found accordingly.

Petitioners are husband and wife who had their legal residence in Lawrenceburg, Ky., at the time of the filing of the petition herein. The petitioners filed joint Federal income tax returns for the taxable years 1961 and 1962 with the district director of internal revenue, Louisville, Ky.

The petitioners made a round trip by car to the Mayo Clinic, Rochester, Minn., between August 26 and 31, 1961, so that each could receive a medical examination. The examination of Frances Montgomery revealed the need for surgery on both feet. On or about October 3, Frances traveled along by train and bus to Rochester for the operation. From October 3 to 20, 1961, she was hospitalized for surgery and recovery at the Mayo Clinic. After the operation, Frances' feet and legs were placed in casts to her knees. Morris Montgomery traveled to Rochester by car after the operation to accompany his wife on her return to Lawrenceburg. Thereafter, she convalesced at home for a period of 5 weeks. On or about November 28, she flew to Rochester and was again hospitalized at the Mayo Clinic until December 14, 1961, for the removal of the casts and further treatment. At the time of her second discharge from the hospital, Morris Montgomery again traveled by car to bring her home. Petitioners' total expense for meals and lodging during the various trips between Lawrenceburg and Rochester was $162.39.

Petitioners traveled 5,380 miles by car for medical treatment during the taxable year 1961 and deducted $538 as medical expenses, computed at the rate of 10 cents per mile. During that year, they operated two automobiles— a 1957 Ford, used exclusively for business purposes, and a 1960 Ford Thunderbird, used for the medical transportation as well as personal purposes. The cost of operating the 1957 Ford was 9.61 cents per mile including depreciation and 5.57 cents per mile excluding depreciation. The cost of operating the Ford Thunderbird for medical purposes during 1961 was 5 cents per mile.

Because she could only move about in a wheelchair or on crutches after the operation, a cleaning woman, Ollie McKee, was employed at a cost of $30 to assist in the care and nursing of Frances Montgomery and to aid the Montgomery household during the period of convalescence. Frances Montgomery purchased two pairs of regular pajamas at a cost of $14.42 to wear to therapy sessions at the Mayo Clinic.

Margaret W. Edwards, petitioner Frances Montgomery's aunt, died in California on March 27, 1962. Upon learning of the death, petitioners made a round trip to California, spending 6 days in transit and 3 days in California. The cost of this trip was $759.

Margaret W. Edwards left a will which had been drawn by petitioner Morris Montgomery. Aside from certain specific bequests, her estate of $64,894.75 was left in a trust, which provided for a fixed monthly payment of $150 to her step-daughter, Catherine Ogden, for life with a right in the trustee to encroach upon principal in case the income was inadequate to meet the monthly payments, medical expenses, or other need or emergency, with the remainder to Frances Montgomery, if she survived Catherine Odgen. The will named Arthur L. Holt of California as sole executor and trustee. Morris Montgomery had loaned Margaret Edwards about $900 during the last years of her life, because she lacked adequate cash at times when she was in the hospital.

OPINION

The principal legal issue with respect to the medical expenses may readily be stated: Are petitioners entitled to deduct the cost of meals and lodging during travel between Lawrenceburg, Ky., and Rochester, Minn., conceded by respondent to have been undertaken for bona fide medical reasons? The answer depends upon the construction of section 213(e)(1),² and particularly section 213(e)(1) (B), which allows the deduction of ‘transportation primarily for and essential to medical care.’ We have found no other decision which deals with this precise question.³

Our path is illuminated by the prior judicial history of section 23(x) of the Internal Revenue Code of 1939 (the predecessor of section 213) and of the impact thereon of section 213(e)(1)(B) after its enactment as part of the Internal Revenue Code of 1954. First, it is clear that no distinction should be drawn between the meals and lodging of the patient and those of her husband. His trips were required for medical reasons and, indeed, respondent does not contend otherwise. Leo R. Cohn, 38 T.C. 387 (1962); Max Carasso, 34 T.C. 1139 (1960), affd. 292 F.2d 367 (C.A. 2, 1961); I.T. 3786, 1946-1 C.B. 75. Second, under the 1939 Code, the expenditures for meals and lodging herein would have been deductible as medical expenses. L. Keever Stringham, 12 T.C. 580 (1949), affirmed per curiam 183 F.2d 579 (C.A. 6, 1950); I.T. 3786, supra; Rev.Rul. 55-261, 1955-1 C.B. 307. Third, the language of section 213(e)(1)(B) is not so clear as to preclude resort to legislative history in order to determine the extent to which it operates as a limitation on otherwise deductible medical expenses. Commissioner v. Bilder, 369 U.S. 499 (1962), reversing 289 F.2d 291 (C.A. 3, 1961) and 33 T.C. 155 (1959).

Section 213(e)(1) of the Internal Revenue Code of 1954 broadened the definition of ‘medical care’ previously contained in section 23(x) of the Internal Revenue Code of 1939 to include amounts paid for accident and health insurance and also added a provision dealing with amounts paid for transportation. The House and Senate reports dealing with section 213(e)(1) contain substantially the same language:

A new definition of ‘medical expenses' is provided which incorporates regulations under present law and also provides for the deduction of transportation expenses for travel prescribed for health, but not the ordinary living expenses incurred during such a trip. (H.Rept.No. 1337, 83d Cong.,2d Sess.,p. 30 (1954).⁴ Emphasis added.)

The emphasis on ‘transportation expense for travel prescribed for health’ indicates that Congress was concerned with the taxpayer who elects or is advised to travel to a more favorable climate in order to cure or alleviate the symptoms of disease— what might be described as resort area medication. Further examination of the House and Senate reports confirm this reading:

The deduction permitted for ‘transportation primarily for and essential to medical care’ clarifies existing law in that it specifically excludes deduction of any meals and lodging while away from home receiving medical treatment. For example, if a doctor prescribes that a patient must go to Florida in order to alleviate specific chronic ailments and to escape unfavorable climatic conditions which have proven injurious to the health of the taxpayer, and the travel is prescribed for reasons other than the general improvement of a patient's health, the cost of the patient's transportation to Florida would be deductible, but not his living expenses while there. * * * The subsection is not intended otherwise to change the existing definition of medical care, to deny the cost of ordinary ambulance transportation nor to deny the cost of food or lodging provided as part of a hospital bill.⁵ (H.Rept.No. 1337, supra, p. A60; S.Rept.No. 1622, supra, pp. 219-200. Emphasis added.)

Thus, the focus of Congress was on meals and lodging of the taxpayer during the period of travel (often protracted) which itself was to produce therapeutic benefits. It did not consider, nor was its attention called to, the problem of the cost of ‘in transit’ meals and lodging incurred while traveling to the point where the prescribed medical treatment or health benefits were to be received. Finally, Congress specified that its purpose was ‘not * * * otherwise to change the existing definition of medical care.’ Such an approval reflects the essentially liberal attitude of the Congress toward the deductibility of medical expenses stated when section 23(x) was first incorporated in the Internal Revenue Code of 1939. S.Rept.No. 1631, 77th Cong.,2d Sess., p. 6 (1962). Under the foregoing circumstances and keeping in mind that section 213(e)(1)(B) is a limitation on otherwise deductible medical expenses, we see no reason not to consider ‘transportation’ as meaning the costs required to bring the patient to...