Saunders v. Comm'r of Internal Revenue, Docket No. 40229.

• Decision Date: 29 January 1954
• Docket Number: Docket No. 40229.
• Citation: 21 T.C. 630
• Parties: ROBERT H. SAUNDERS, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
• Court: U.S. Tax Court

21 T.C. 630

ROBERT H. SAUNDERS, PETITIONER,

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Docket No. 40229.

Tax Court of the United States.

Promulgated January 29, 1954.

Sydney A. Gutkin, Esq., and David Beck, Esq., for the petitioner.

John J. Hopkins, Esq., for the respondent.

Theodore D. Parsons, Attorney General, State of New Jersey, amicus curiae.

Held, allowance for meals received by petitioner, a New Jersey State Trooper, is includible in gross income under section 22(a). Held, further, the amounts actually spent on meals while on duty are not deductible either under section 22(n) or 23(a)(1)(A) but, rather, are nondeductible personal expenditures under section 24(a)(1).

The Commissioner determined a deficiency of $107 in petitioner's income tax for 1950. The deficiency is due to the addition to petitioner's net income as reported on his return of $665. This addition to petitioner's income is explained in the deficiency notice, as follows:

Line 2a increases income by $665.00 as amounts paid in lieu of subsistence is includible in gross income and does not constitute allowable deduction, and expenses incurred— not away from home overnight in performance of duty is non-deductible in accordance with Section 23(a)(1)(A) of Internal Revenue Code.

The petitioner by appropriate assignments of error contests this determination.

The issues for decision are: (1) Whether $665 paid petitioner in lieu of rations by the State of New Jersey is includible in gross income under section 22(a) of the Code and, if so, (2) is the amount petitioner spent on meals while on duty deductible under the provisions of section 22(n) or 23(a)(1)(A) of the Code.

FINDINGS OF FACT.

Petitioner is an individual residing, during 1950 and currently, in Millville, New Jersey. He filed his 1950 income tax return with the collector of internal revenue for the first collection district of New Jersey. He is married and has one minor son.

Since 1947, petitioner has been a New Jersey State Trooper, a member of the police force of that State. In 1950, he was paid $3,605, which included $665 given in lieu of rations. The aforesaid amount of $665 represents the amount that petitioner received as commutation of rations for the taxable year 1950. The petitioner has no record showing actual expenditures for meals during the taxable year 1950 but he spent at least that much for meals in 1950. The petitioner, on his income tax return for the taxable year 1950, deducted the amount of $665 from his salary in arriving at his adjusted gross income.

The petitioner maintains a home and family at Millville, New Jersey, a distance of 22 miles from his post of duty.

The New Jersey State Police force was organized under statute in 1921. Petitioner originally enlisted for 2 years in 1947, and he has re-enlisted at the prescribed 2-year intervals ever since. A State policeman may not withdraw from the force prior to the end of an enlistment without permission of the Superintendent of State Police, who is the commander of the force. If he withdraws without permission he is guilty of a misdemeanor.

Petitioner, in a normal 30-day month, is on duty 390 hours and is off duty 330 hours. The 330 off-duty hours are composed of 6 days a month off plus 10 overnight passes of 15 hours each and 9 passes of 4 hours each. Except when on a day off, pass, or vacation (of 2 weeks a year) he must live at the Mays Landing, New Jersey station, to which he is assigned, and is not permitted to go to his home, which is 22 miles from that station. At the beginning of the month his schedule is posted. However, it is subject to change without notice and petitioner may not only have his time off changed but might be required to work more than 390 hours if the situation calls for it. His shifts vary and he may be on duty any time of the day or night. He is subject to call every day of the year and, when on a day off, pass, or vacation, must keep his station informed of his whereabouts.

Petitioner's duties include road patrol, patrol of rural farm areas, duties at the station house, and answering criminal complaints. The area patrolled by the Mays Landing station is divided into four parts and petitioner may be assigned to patrol any one of those parts. He may also, at the pleasure of his superiors, be assigned to an entirely new station at any time.

Prior to July 1, 1949, petitioner and other troopers were supplied with meals at their stations. If their duties prevented them from returning to the stations for a meal they would purchase it elsewhere and be reimbursed therefor. It took petitioner, and most other troopers who were out on duty, about 1 hour to make the round trip from their patrol areas to their stations and a half hour to eat. This system proved unsatisfactory because almost all troopers would return to the stations at the same time thereby leaving the State practically unpatrolled for 1 1/2 hours during each mealtime. Efforts were made to prevent this but did not succeed because, if the troopers did not arrive at the station within the time prescribed for meals, whatever was served them would be cold. This method of feeding also proved to be expensive, requiring the State to employ added personnel and equipment and to supply and transport food to the various stations.

Beginning July 1, 1949, the aforementioned method of providing meals was discontinued and each trooper was given a monthly food allowance of $70 in cash, calculated on the basis of $3 a day for each duty day (exclusive of days off). All officers, from lieutenant up, were given a different allowance, although the amount thereof is not apparent from the record. The troopers' allowance was paid in semi-monthly payments of $35, which were included in the salary checks of petitioner and the other troopers. Federal income taxes were withheld from the food allowance but it was not regarded or accounted for as compensation, either in the State Police budget or by the State Civil Service Commission (which body determines the salary ranges for troopers). Rather, it was considered payment in lieu of rations. No food allowance was paid troopers while on vacation and, when necessary, adjustments were made in the allowance of a trooper to conform with actual days on duty.

On June 23, 1949, the Division of State Police, State of New Jersey, issued an operations order above referred to entitled ‘Maintenance Allowance,‘ which stated as follows:

1. Beginning July 1, 1949 all members of the State Police will be paid a daily allowance for meals at rates approved by the Budget Commission and the Attorney General. Meals will not be furnished by the state except as herein provided. Payment of the daily allowance for meals will not be made to recruits during their pre-service training.

2. Payment of the daily allowance for meals will be made for actual days on duty, excluding vacation and days on monthly duty leave. Payment will not be made in special cases where another allowance has been granted for meals and lodging. All special requests for allowance for food and lodging will be approved by the Superintendent.

3. A mess will be operated at the New Jersey Police Headquarters to feed members of the pre-service and in-service training classes. Certain members of the State Police, may be authorized by the Superintendent to take meals at this mess. Deductions at rates to be established will be made from the daily allowance for all meals taken at this mess, except by recruits.

4. Daily allowance for meals will be paid by check. The first payment will be made on or about July 1, by separate check, in advance, for the period July 1 to July 15. Thereafter, the daily maintenance allowance will be included with the regular pay check. Each pay period will include allowance for meals for 12 days in advance, and adjustments to conform with the actual time spent on duty will be made at stated periods. Absences on vacation or for other reasons for which the daily allowance for meals is not paid will be reported immediately to the Personnel Section, Division Headquarters. Adjustments for absences on vacations or for other reasons for which the maintenance allowance is not paid will be made as soon as possible.

5. Reports of the actual days on duty by each individual will be made on the Individual Duty Report submitted through channels by Regions, Service Commands and Staff Sections. The reports will be submitted as provided in Operations Orders covering the preparation and submission of Operations Reports. Reports of the actual time on duty will be submitted for a monthly period and must reach Division Headquarters not later than the second day of the following month.

6. The following rules apply to the purchase of meals for members of the State Police: Meals may be procured by each individual at a suitable place in the nearest vicinity of assigned patrols, stations or headquarters. Station, District and Region Commanders will control the time allotted for meals. Members may be authorized to eat at home by the immediate commander when such arrangements do not involve additional travel and loss of time.

7. Passes will be adjusted so that loss of time is not involved for meals, for example, members departing on duty leave at 12:00 noon or 1:00 P.M. will be required to take the noonday meal after departure and members reporting for duty at 8:00 A.M. will take breakfast prior to reporting, etc.

8. Payment of allowance for meals for duty leave voluntarily forfeited by a member will not be made. Authority to receive payment for meals for vacation voluntarily forfeited by members will be submitted to the Superintendent for approval.

9. Regulations governing the payment of daily allowance for meals in case of sickness and injury will be covered in later instructions.

10. The new method of feeding for a number of years has been recommended by members of the State Police. Official requests previously made were disapproved but approval...