Whitaker v. Comm'r of Internal Revenue, Docket No. 52093.

• Decision Date: 26 July 1955
• Docket Number: Docket No. 52093.
• Citation: 24 T.C. 750
• Parties: JAMES R. WHITAKER AND ELNORA F. WHITAKER, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
• Court: U.S. Tax Court

24 T.C. 750

JAMES R. WHITAKER AND ELNORA F. WHITAKER, PETITIONERS,

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Docket No. 52093.

Tax Court of the United States.

Filed July 26, 1955.

TRAVEL EXPENSES— SEC. 23(a)(1)(A), I.R.C. 1939.— Petitioner was employed at Thule, Greenland, for the greater part of 1952 as a project engineer on a construction project being constructed under contract with the Department of the Army. He was not permitted to take his family with him. Held, the employment was of indefinite duration, and petitioner's main post of duty or principal place of business was at Thule, Greenland, in 1952, and his expenses for food and lodging while there were nondeductible personal living expenses. James R. Whitaker, pro se.

Sylvan Siegler, Esq., for the respondent.

The Commissioner determined a deficiency of $522.26 in income tax for the year 1952.

The question is whether petitioner properly deducted amounts expended for meals and lodging at Thule, Greenland, as expenses incurred while away from home in the pursuit of a trade or business under section 23(a)(1)(A) of the Internal Revenue Code of 1939.

FINDINGS OF FACT.

Petitioners, husband and wife, filed their joint income tax return for 1952 with the director of internal revenue for the district of Iowa.

Petitioner, James R. Whitaker (hereafter referred to as petitioner), is a civil engineer. Early in 1951 he resided at Hawarden, Iowa, where he maintained a home for himself and his family.

In February 1951 petitioner commenced work as an assistant project engineer for North Atlantic Constructors, a joint venture operating under a contract with the Department of the Army for the performance of certain off-shore construction in the general vicinity of Thule, Greenland. By the end of 1951 he had been made a project engineer.

Petitioner's employment with North Atlantic Constructors began under a written contract. A second contract was signed on April 4, 1952. The contracts of employment were identical except for dates. Each was entitled ‘Off-Continent Employment Agreement,‘ and each contained, inter alia, the following provisions:

SECTION 2. TERM OF AGREEMENT.

The term of this Agreement shall be the period during which the services of the Employee are required. No definite period of employment is assured; however, after eight (8) months continuous employment at the job site the Employee may terminate his employment hereunder by giving the Contractor written notice specifying the date on which he desires to terminate his employment, which date shall not be less than than fifteen (15) days after the date of delivery of such notice to the Contractor.

SECTION 7. JOB SITE FACILITIES.

(a) Board, lodging, laundry and dry cleaning when available, social services, and such hospitalization, medical services and temporary dental care as in the opinion of the Contractor may be desirable, to keep the Employee in condition to render proper services, will be furnished by the Contractor at the job site to the extent authorized by the Contracting Office, at a charge of Five Dollars and Seventy Five Cents ($5.75) per day. The Employee hereby authorizes the Contractor to deduct all such charges from any payments otherwise due to the Employee hereunder.

(b) The Employee agrees that no claim shall arise against the Contractor for the adequacy of job site facilities furnished hereunder, it being recognized by the Employee that conditions at the job site are unusual; the Contractor will, to the extent of his ability, furnish the best facilities which are possible under the conditions encountered.

SECTION 10. TERMINATION OF EMPLOYMENT.

The Employee agrees that if he quits or is terminated for cause prior to the completion of eight (8) months service hereunder, the Contractor's obligations to the Employee shall cease on the date of such quitting or termination for cause, and the Employee shall be liable for the costs and other expenses for his return to the United States. * * *

SECTION 24. CERTIFICATION BY EMPLOYEE.

The Employee Certifies to the Contractor That He Has Read the Foregoing Agreement and That He Fully Understands Its Terms and Conditions, and Further Certifies That the Foregoing Terms and Conditions Constitute His Entire Agreement With the Employer, and That No Promises or Understandings Have Been Made Other Than Those Stated Above; and It Is Specifically Agreed by the Parties Hereto That This Agreement Shall Be Subject to Modification Only by Written Instrument Signed by Both the Contractor and the Employee.

The exact location of the petitioner's job site was a military secret and was not disclosed in the employment agreement. Petitioner was informed that he would be working in a cold climate, and that he would be sent outside the continental limits of the United States. The construction project for which petitioner was hired was located in Thule, Greenland.

In July 1951 petitioner was sent to Thule, Greenland, as assistant project engineer. He was in Thule from December 15, 1951, to January 5, 1952; from April 8, 1952, to August 12, 1952; and from August 29, 1952, to November 26, 1952. He returned to Thule in January 1953 and again in April 1953.

During the year 1952 petitioner left Thule on three separate occasions to travel to the United States. On each of these occasions he stopped in New York City, where his employer's main office was located, and in Minneapolis, Minnesota, where his employer's recruiting office was located.

Petitioner's family was not permitted to accompany him to Greenland. His family remained in Hawarden, Iowa, during all of 1952. On two of the three occasions that he traveled to the United States, petitioner visited his family in Hawarden.

Petitioner's employer either provided him with transportation to and within the United States, or reimbursed him for traveling expenses incurred. Petitioner's employer also reimbursed him for certain board and lodging expenses incurred at New York City, Minneapolis, Minnesota, and Hawarden, Iowa, in connection with petitioner's three trips to United States.

Petitioner's employer did not reimburse him for certain board and lodging expenses incurred at Minneapolis, Minnesota, during the months of February, March, and April 1952. The total amount of these expenses was $128.80.

On the joint income tax return filed by petitioner and his wife for the taxable year 1952, he deducted board and lodging expenses amounting to $1,503.05 from the total amount of wages received by him during the year. This sum consists of board and lodging expenses in the amount of $128.80 incurred at Minneapolis and board and lodging expenses in the amount of $1,374.25 incurred at Thule.

In the notice of deficiency respondent determined that of the total amount of $1,503.05 claimed as board and lodging expenses, only the sum of $128.80 represented on allowable deduction for meals and lodging while employed by North Atlantic Constructors.

Board and lodging expenses in the amount of $1,374.25 were incurred by petitioner at Thule from December 15, 1951, to January 5, 1952; from April 8 to August 12, 1952; and from August 29 to November 26, 1952. The sum of $1,274.25 was apparently computed by multiplying the number of days in question by $5.75, the amount which petitioner's employer charged him for board, lodging, and related services furnished at the job site under the terms of the employment agreement.

Petitioner spent a total of 222 days...