Rudolph v. United States, Civ. No. 8317.
| Decision Date | 21 September 1960 |
| Docket Number | Civ. No. 8317. |
| Citation | 189 F. Supp. 2 |
| Parties | C. J. D. RUDOLPH et ux. v. UNITED STATES of America. |
| Court | U.S. District Court — Northern District of Texas |
Felix Atwood and David P. Smith of Turner, White, Atwood, McLane & Francis, Dallas, Tex., for plaintiff.
W. B. West, III, U. S. Atty., Ft. Worth, Tex., and W. E. Smith, Asst. U. S Atty., Dallas, Tex., for defendant.
This is an action by the plaintiffs to recover $126.90 in income taxes and $10.19 of interest, together with interest on such sum. Plaintiffs were assessed and paid such amount and bring this suit to recover the payment so made.
The deficiency in such amount was assessed on the theory that the $560 admitted value of an all expense paid trip from Dallas, Texas to New York City, taken by the plaintiffs, husband and wife, in 1956, and paid for by the Southland Life Insurance Company, was includible in the income of the plaintiffs, and as a personal expense was not deductible by them as an ordinary and necessary business expense. Plaintiffs contend that the value of such trip was not income to them, and even if it were, that they are entitled to deduct its value as an ordinary and necessary business expense. Plaintiff, C. J. D. Rudolph is an insurance agent selling for Southland. He qualified to attend Southland's convention in New York City and also to take his wife along by virtue of selling the requisite amount of insurance as determined by Southland. The convention trip consumed five or six days. Of this time, one morning session was devoted to a business meeting, followed by a business luncheon. The remaining time was devoted to travel, sightseeing, entertainment, fellowship or free time.
There are certain well settled propositions of law we might gather our thoughts and reasons from. One is that a bonus paid to an employee is part of his income, just like a tip paid to a waitress is part of her income.
It is likewise a well settled proposition of law that an employer may assemble his employees for the purpose of training and instructing them, and the expenses that he goes to or to reimburse them for the expense they went to in coming to the meeting is a legitimate expense of the company, and no gain to the employee in a monetary way.
Now the reasoning from these two propositions—let us see what is true here.
The recent Alabama case, Thomas v. Patterson, D.C.N.D.Ala., 189 F. Supp. 230, was for attending a convention at Fort Monroe in Virginia. It does not appear where the office of the company is—the insurance company—it does not appear where the territory of the company is. So far as the information is concerned, much of its business might be around and about Fort Monroe. Therefore, selection of that place would be in line with ordinary business economy. In any event, we are concerned with whether plaintiffs in ...
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- Rudolph v. United States
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RUDOLPH V. UNITED STATES
...job well done," and that, from the point of view of the Rudolphs, it "was primarily a pleasure trip in the nature of a vacation. . . ." 189 F.Supp. 2, 4-5. The Court of Appeals approved these findings. 291 F.2d 841. Such ultimate facts are subject to the "clearly erroneous" rule, cf. Commis......
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ACACIA MUTUAL LIFE INSURANCE COMPANY v. United States, Civ. No. 16469.
...a job well done' and that from the point of view of the Rudolphs it `was primarily a pleasure trip in the nature of a vacation * *.' 189 F.Supp. 2, 4-5. The Court of Appeals approved these findings. 291 F. 2d 841. Such ultimate facts are subject to the `clearly erroneous' rule, cf. Commissi......
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Patterson v. Thomas
...company. Section 803, I.R.C. of 1954, 26 U.S.C.A. § 803. 8 Treasury Regulations 1.162-2(b) (2). 9 But see, Rudolph v. United States, D.C. N.D.Tex.1960, 189 F.Supp. 2. In his welcoming speech, the President of Liberty National noted that: "This is an unusual meeting since it is being held he......