Vanicek v. Comm'r of Internal Revenue, Docket Nos. 16187-79
| Decision Date | 06 November 1985 |
| Docket Number | 16201-79.,Docket Nos. 16187-79 |
| Citation | 85 T.C. 731,85 T.C. No. 43 |
| Parties | EDWARD VANICEK, DECEASED and SARA VANICEK, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, RespondentJOHN B. MODEN and RUTH MODEN, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent |
| Court | U.S. Tax Court |
OPINION TEXT STARTS HERE
During the years in issue, Ps were employed as resident watchmen by the Forest Preserve District of Cook County, Illinois, to safeguard certain areas of land owned by the District. As a condition of their employment, Ps were required to occupy lodgings strategically located within their assigned areas. The District allowed Ps to live in the lodgings rent-free. HELD, Ps are entitled to exclude the value of the lodgings from income under section 119. Benninghoff v. Commissioner, 71 T.C. 216 (1978), affd. per curiam614 F.2d 398 (5th Cir. 1980), distinguished. HELD FURTHER, Ps are not entitled to deduct under section 162 certain expenses incurred operating and maintaining the lodgings. J. PATRICK DOHERTY and ROBERT A. BEDORE, for the petitioners.
WILLIAM C. SABIN, JR., for the respondent.
In these consolidated cases, respondent determined the following deficiencies in petitioners' Federal income taxes:
+----------------------------------------------------+
¦Docket No.¦Petitioner ¦Year¦Deficiency¦
+----------+-------------------------+----+----------¦
¦16187-79 ¦Edward Vanicek, deceased,¦1972¦$1,636.04 ¦
+----------+-------------------------+----+----------¦
¦ ¦and Sara Vanicek ¦1973¦2,781.76 ¦
+----------+-------------------------+----+----------¦
¦ ¦ ¦1974¦3,626.76 ¦
+----------+-------------------------+----+----------¦
¦16201-79 ¦John B. Moden ¦1972¦829.20 ¦
+----------+-------------------------+----+----------¦
¦ ¦and Ruth Moden ¦1973¦895.25 ¦
+----------+-------------------------+----+----------¦
¦ ¦ ¦1974¦957.00 ¦
+----------------------------------------------------+
The issues for decision are (1) whether the fair rental value of lodging furnished to petitioners by their employer, the Forest Preserve District of Cook County, Illinois, is excludable from gross income under section 119; 1 and (2) whether the Vaniceks are entitled to deduct under section 162 certain expenses incurred operating and maintaining their residences.
Some of the facts have been stipulated and are so found. The stipulation of facts and attached exhibits are incorporated herein by this reference.
Petitioners Edward Vanicek and Sara Vanicek, husband and wife, resided in Ironton, Missouri, when they filed the petition in this case. Petitioners John B. Moden and Ruth Moden, husband and wife, resided in San Diego, California, when they filed the petition in this case. The parties have stipulated pursuant to section 7482(b)(2) that the decision of the Court in these cases may be reviewed by the United States Court of Appeals for the Seventh Circuit.
During the years in issue, petitioners Edward Vanicek and John Moden were employed by the Forest Preserve District of Cook County, Illinois (hereinafter sometimes referred to as the District). The District, an incorporated political unit of the State of Illinois, was created by state statute in 1915 ‘(t)o acquire * * * and hold lands * * * containing one or more natural forests or lands connecting such forests or parts thereof, for the purpose of protecting and preserving the flora, fauna and scenic beauties within such district, and to restore, restock, protect and preserve the natural forests and said lands together with their flora and fauna, as nearly as may be, in their natural state and condition, for the purpose of the education, pleasure, and recreation of the public.‘
Since 1915, the District has systematically acquired property to return the land to its natural state as well as to develop golf courses, swimming pools, nature centers and picnic areas on and throughout the District property. This systematic reconstruction and preservation is intended to benefit the people of the entire Chicago metropolitan area. As of February 19, 1975, the District owned 64,730 acres of land throughout Cook County, Illinois.
The general headquarters for the District is located in the approximate center of its land holdings. Twelve division headquarters are located throughout the District property. The division headquarters are operated by law enforcement officers, called ‘rangers‘, who are responsible for the safe operation of the District lands. The rangers are on duty at the division headquarters from 9 a.m. until 1 a.m. In the event an emergency occurs while the rangers are not on duty, individuals on duty at the general headquarters attempt to call rangers at home, the local police or resident watchmen.
Resident watchmen are selected from employees of the District by the District's General Superintendent to protect designated areas within the District from fire, hunting, vandalism or other encroachment. The District initiated the resident watchman program in 1918 to support the rangers in the performance of their duties. Although the services performed by the resident watchmen were often duplicative of the services performed by the rangers, this duplication was necessary given the inadequate number of rangers available to patrol all of the District's land.
As a condition of being a resident watchman, people performing this function were required to live in residences strategically located within the areas they were assigned to patrol. These houses were not constructed by the District. Rather, they were incidentally acquired as pre-existing structures located on property obtained by the District. Although participants in the resident watchman program were not paid additional compensation for their services as resident watchmen, they were allowed to live in the residences rent-free.
A prospective resident watchman must file an application for permit in which he agrees to (1) maintain a telephone in his residence at his own expense; (2) answer emergency and fire calls at all times; (3) remain on areas, in fire season, at all times; and (4) maintain his residence at his own expense. Once accepted as a resident watchman, he receives a document listing his specific duties as follows:
1. You must be thoroughly familiar with District boundaries within your assigned area and make periodic inspections to make certain that District property is protected.
2. Check for encroachments especially by home owners living adjacent to District lands.
3. Be on constant watch for fires. During times of extreme fire dangers, all residents must remain on his respective area at all times. You are required to have in your possession either a fire flapper or back pack pump. You will be required to report to Division headquarters for weekend fire watch duty in times of extreme fire danger.
4. Check your area frequently during the hunting season. Report all hunters to your Division Superintendent immediately. Do not try to apprehend them.
5. You are expected to clean all minor debris dumping incidents. Report all major dumpings at once.
6. Check all water bodies for picnic tables and other objects and report same to the Division Superintendent.
7. Check all facilities for vandalism. Do not apprehend vandals, but try to obtain positive identification for authorities. (i.e. make, model, and license number of car if available).
8. Complete and submit resident watchman reports on a monthly basis.
During the years in issue, the resident watchmen did not possess police power nor did they wear uniforms or badges identifying them as park employees.
Edward Vanicek (Edward) was employed as a heavy equipment operator by the District in 1932. Edward was appointed a resident watchman in 1937.
During the years in issue, Edward was employed as a Maintenance Supervisor II by the District. As a maintenance supervisor, Edward was in charge of the central equipment garage located in downtown Chicago, several miles from the District's general headquarters. Edward generally worked at the garage on weekdays from 8 a.m. until 4 p.m.
In addition to his employment as a maintenance supervisor, Edward also served as a resident watchman during the years in issue. As a resident watchman, Edward, with his wife, Sara resided in District Property No. 115 and District Property No. 525 rent-free from 1972 through May 15, 1973, and from May 15, 1973 through 1974, respectively. For purposes of this Opinion, the parties agree that during the years in issue, the monthly fair rental value of District Property No. 115 and District Property No. 525 was $275 and $475, respectively.
As a resident watchman of District Property No. 115 and District Property No. 525, Edward was responsible for an area consisting of approximately 365 acres and 824 acres, respectively. The designated area surrounding Property No. 115 included reforestation beds, an overflow parking lot, a boat launch and a shelter. The minimum value of this property during the years in issue was $313,200. The designated area surrounding Property No. 525 included several picnic groves and a nature preserve. The minimum value of this property during the years in issue was $950,625. A substantial portion of the designated areas surrounding Edward's residences at Property No. 115 and Property No. 525 was visible from those residences.
During the years in issue, Edward patrolled his designated area two to three times per week on foot and in his automobile. While living at Property No. 115, Edward and his wife also observed their designated area several times a day from inside their house through field glasses.
Edward maintained a fire flapper 2 and a back pack pump in his home and carried these devices while patrolling to extinguish small fires which he might discover. In the event Edward...
To continue reading
Request your trial
-
Mendes v. Comm'r of Internal Revenue
...Cohan, there must be sufficient evidence in the record to provide a basis upon which an estimate may be made. Vanicek v. Commissioner, 85 T.C. 731, 742–743, 1985 WL 15409 (1985). Here, there is none. Cf. Estate of Dickerson v. Commissioner, T.C. Memo.1997–165 (taxpayer's Schedule A deductio......
-
Mendes v. Commissioner of Internal Revenue, Docket No. 16032-95 (U.S.T.C. 12/11/2003)
...under Cohan, there must be sufficient evidence in the record to provide a basis upon which an estimate may be made. Vanicek v. Commissioner, 85 T.C. 731, 742-743 (1985). Here, there is none. Cf. Estate of Dickerson v. Commissioner, T.C. Memo. 1997-165 (taxpayer's Schedule A deduction for mo......
-
Rogers v. Comm'r, T.C. Memo. 2018-53
...in the record on which we can base an estimate. See Williams v. United States, 245 F.2d 559, 560 (5th Cir. 1957); Vanicek v. Commissioner, 85 T.C. 731, 742-743 (1985). In estimating the deductible amount, we bear heavily upon the taxpayer who failed to maintain the required records. Cohan v......
-
Lattin v. Commissioner
...[2 USTC ¶ 489], 39 F.2d 540 (2d Cir. 1930). The estimate must, however, have some reasonable evidentiary basis. Vanicek v. Commissioner [Dec. 42,468], 85 T.C. 731, 743 (1985). The evidence must show that at least the estimated amount was actually spent or incurred for the stated purpose. Wi......
-
Tax Court In Brief | Simpson V. Comm'r | Deficiencies For Unsubstantiated Expenses; Accountable Reimbursement Plans; And Basis In LLC
...if there is an evidentiary basis for doing so. See Cohan v. Commissioner, 39 F.2d 540, 543-44 (2d Cir. 1930); Vanicek v. Commissioner, 85 T.C. 731, 742-43 (1985). In estimating the amount of an allowable expense under the Cohan rule, the Court bears heavily against the taxpayer whose inexac......
-
Tax Court In Brief | Smith v Comm'r | Exclusion Of Value Of Lodging Provided By Employer
...to accept such lodging as a condition of his employment." Treas. Reg. ' 1.119-1(b); see I.R.C. ' 119(a); Vanicek v. Commissioner, 85 T.C. 731, 737-38 (1985). If any one of the conditions is not met, the exclusion is not allowed. See Dole v. Commissioner, 43 T.C. 697, 705 (1965), aff'd per c......
-
Tax Court In Brief | Ismail v. Comm'r | Foreign LLC For U.S. Tax Purposes; Substantiation Of Schedule C Expenses; Section 274
...(2d Cir. 1930). To apply the Cohan rule, the Court must have a basis upon a which an estimate can be made. See Vanicek v. Commissioner, 85 T.C. 731, 742-43 Section 274 denies a deduction for vehicle, travel, and meals and entertainment expenses unless such are substantiated. I.R.C. ' 274(d)......
-
Tax Court In Brief | Luna v. Comm'r | Disallowance Of Itemized Business Deductions And Lack Of Substantiation
...order for the Court to estimate the amount of any expense, there must be some basis upon which an estimate may be made. Vanicek v. Comm'r, 85 T.C. 731, 742-43 The Court may not, however, estimate expenses under Cohan in situations where section 274 requires specific substantiation. See R.C.......
-
Recordkeeping requirements and the consequences of lost, destroyed or stolen records.
...Strong Jr., TC Memo 1994-346. (7) Roger L. Williams, TC Memo 1998-93. (8) George M. Cohan, 39 F2d 540 (2d Cir. 1930). (9) Edward Vanicek, 85 TC 731 (10) Eddy A. Veizaga, TC Memo 1981-663. (11) The courts have imposed similar rules when the expenditures are not specifically covered by Sec. 2......