Wilson v. United States
| Citation | 292 F. Supp. 200 |
| Decision Date | 06 November 1968 |
| Docket Number | Civ. A. No. 2785. |
| Parties | Ralph A. WILSON and Joanne B. Wilson, his wife v. UNITED STATES of America. |
| Court | U.S. District Court — District of New Hampshire |
Clyde R. Coolidge, Cooper, Hall & Walker, Rochester, N. H., for plaintiffs.
Louis M. Janelle, U. S. Atty., Concord, N. H., Moshe Schuldinger, Atty., Tax Division, Dept. of Justice, Washington, D. C., for defendant.
DECISION
This is an action against the United States of America for the recovery of internal-revenue taxes in the amount of $74.96, alleged to have been erroneously and illegally assessed against, and collected from the plaintiffs for the year 1965. Jurisdiction of this court is premised on Title 28, United States Code § 1346(a) (1). The following question is submitted for our decision:
Whether the reimbursed meal expenses, received by Ralph A. Wilson from his employer, are excludable from his gross income for the year 1965 pursuant to the provisions of Section 119 of the Internal Revenue Code of 1954.
The plaintiffs are presently, and were during the year 1965, married and residing in Lebanon, New Hampshire. In that year, the taxpayer1 was employed by the State of New Hampshire, Division of State Police, in the capacity of a uniformed trooper, and received from the State, as reimbursement for the actual cost of meals eaten while on duty, the sum of $394.55. These payments were made in accordance with the "Travel Rules and Regulations of the State of New Hampshire, October 1965" issued by the Department of Administration and Control. The sum of $394.55 was not reported on the plaintiffs' 1965 joint federal income tax return which was filed with the District Director of Internal Revenue in Portsmouth, New Hampshire. On January 6, 1967, the District Director assessed a deficiency in income tax in the amount of $74.96 resulting from the inclusion in taxable income of $394.55. The assessed tax and interest thereon ($2.87) were paid by the plaintiffs on December 5, 1966, (tax) and January 17, 1967, (interest). On December 5, 1966, the plaintiffs filed a timely claim for refund of the tax being paid on that date. A statutory notice of disallowance of that claim was mailed to the taxpayer on March 2, 1967. On June 13, 1967, the plaintiffs commenced this action.
Based upon the submitted depositions and the court hearing, the following additional facts are found:
The employing agency, the Division of State Police of the State of New Hampshire, has a total complement of approximately one hundred and thirty-eight men, of which some one hundred and fifteen men are uniformed, and the remainder serve in communications and plain-clothes divisions. The uniformed divisions are divided into seven troops ("A" through "F" and the "Turnpike Patrol"), and the entire Division of State Police is organized along military lines. Deposition of Major John T. Conti, 8-10 (hereinafter referred to as Conti).
In general, the jurisdiction of the Division, though statewide, is limited to state highways, and to townships with a population of three thousand or less which do not have a regular organized police force of their own. Additionally, when requested by local authorities or by the Attorney General, the State Police perform investigatory duties in the larger townships and cities. Deposition of Ralph A. Wilson, 4-5 (hereinafter referred to as Wilson); Conti, 21-23.
Additional organizational practices and procedures indicate that uniforms, weapons, and patrol cars equipped with radios are furnished to the troopers by the State of New Hampshire. Wilson, 6, 8, 9. Troopers assigned to a particular troop area work nine-hour shifts, which extend from 7:00 A.M. to 4:00 P.M.; 9:00 A.M. to 6:00 P.M.; 1:00 P.M. to 10:00 P.M.; 3:00 P.M. to midnight; 4:00 A.M. to 1:00 P.M.; and, 6:00 A.M. to 3:00 P.M. The troopers are also "on call" twenty-four hours a day, seven days a week. Wilson, 5-6.
One meal break is generally permitted during the nine-hour shift.2 Conti, 15. There is no prescribed meal-time nor is there a specified limitation upon the duration of the meal break. Wilson, 6-7. The monies in dispute in this action are the 1965 reimbursements to the taxpayer for the cost of meals purchased by him during regular nine-hour shifts. At the hearing, counsel for both parties indicated that this action is, in reality, a representative action on behalf of all New Hampshire State Police Troopers.3
Certain restrictions and conditions pertaining to the contested reimbursed meal expenses must be enumerated. The applicable provisions of the State of New Hampshire Department of Administration and Control "Revised Travel Rules and Regulations, October 1965," in accordance with which the contested payments were made, are reported below.4 Certain long-standing oral orders of the State Police, in effect in 1965, are also pertinent, and we list here, portions of both the "Rules" and oral orders, which we find, in fact, to be prerequisites of reimbursement payment to the taxpayer as a State Trooper:
(1) The trooper must be on an actual duty shift and must be ten or more miles from (a) his home, and (b) his headquarters or duty station5 (Conti 13, 15, 23, 25; Wilson, 10-12);
(2) Reimbursement is made only for actual out-of-pocket expense for the purchase of his own meal (Wilson 13; Conti 13, 27);
(3) The restaurant or eating establishment must be one approved by the troop commander, of a public nature, as adjacent to the highway or patrol area as practical, free from an unsavory character (e. g., hangout for hoodlums, etc.), and, whenever possible, not be a restaurant which serves liquor.6 (Conti, 18, 19, 21, 25; Wilson, 17);
(4) Troopers must notify their troop headquarters of the place where they eat, and the telephone number of that establishment (Wilson, 8, 16; Conti, 18, 19, 21, 26, 28);
(5) Troopers remain on call during meals and are subject to interruptions of an emergency nature (Wilson, 7; Conti, 19, 25);
(6) The limits of reimbursement, without the necessity of receipt verification, are: morning meals — $1.00; noon meals — $1.50; and, evening meals — $2.507 (Wilson, 11-12; Conti, 12, 15); and,
(7) Claims for reimbursement are submitted by each individual trooper, by voucher, on a monthly basis, and are then processed (Wilson 10, 13; Conti, 14, 26).
As a final note of clarification, it should be mentioned that no issue of overnight travel expense is here involved and that the New Hampshire State Police do not have barracks which actually serve meals. Wilson, 13-15. There is no requirement that the troopers eat in restaurants, nor are they reimbursed for home-packed meals eaten in the patrol cars. Wilson, 15-16; Conti, 27-29.
At the outset, the Court wishes to state emphatically that our decision is limited to the issue presented to us: whether the reimbursements received by the taxpayer are excludable from his gross income under Section 119 of the Internal Revenue Code of 1954.
We recognize that the armament which the plaintiffs bring to the battle is formidable: four distinguished Circuit Courts of Appeals have ruled in support of the plaintiffs' claim on the precise question presented to us.8 The detailed analysis accorded by those Courts to the judicial construction of Section 119 has caused us to weigh our own decision very carefully. However, after repeated scrutiny, we find that the statute, the regulations promulgated thereunder, and the legislative history of the 1954 Internal Revenue Code overcome the formidable decisions arrayed on behalf of the plaintiffs and inevitably lead us to an opposite decision.
We frankly admit that the instant fact situation resembles so strictly those four Circuit Court decisions, and so slightly, Magness v. Commissioner of Internal Revenue, 247 F.2d 740 (5th Cir. 1957), the only Circuit Court decision offering the slightest support to the government's position, as to furnish this Court with no substantial case law to support us.9 This is not recited as an apologia, but in fairness to the plaintiffs here and out of respect to the Circuit Courts with whom we reluctantly, but firmly disagree.
Section 61(a) of the Internal Revenue Code of 1954 defines gross income as "* * * all income from whatever source derived, including (but not limited to) * * * (1) Compensation for services, including fees, commissions, and similar items; * * * whereafter follow fourteen additional categories of income." Section 61(b) cross refers to Sections 71 and following for items specifically included, and Sections 101 and following for items specifically excluded from gross income. The language of Section 61(a) has been construed in a patently broad manner and clearly expresses the intention of Congress to tax all gains except those specifically exempted. The sweeping terms of the 61(a) definition are obvious proof of Congressional intent that the constitutional taxing power be construed comprehensively. See Commissioner of Internal Revenue v. LoBue, 351 U.S. 243, 76 S.Ct. 800, 100 L.Ed. 1142 (1956); Commissioner of Internal Revenue v. Glenshaw Glass Co., 348 U.S. 426, 75 S.Ct. 473, 99 L.Ed. 483 (1955); Commissioner of Internal Revenue v. Jacobson, 336 U.S. 28, 69 S.Ct. 358, 93 L.Ed. 477 (1949); Commissioner of Internal Revenue v. Smith, 324 U.S. 177, 65 S.Ct. 591, 89 L.Ed. 830 (1945), all construing Section 22(a) of the 1939 Code, the predecessor to Section 61(a).10 See Heard v. Commissioner of Internal Revenue, 326 F.2d 962, 966 (8th Cir.), cert. denied, 377 U.S. 978, 84 S.Ct. 1884, 12 L.Ed.2d 746 (1964); Kaiser v. United States, 158 F.Supp. 865 (1958), rev. on other grounds, 262 F.2d 367 (7th Cir. 1958), aff'd, 363 U.S. 299, 80 S.Ct. 1204, 4 L.Ed. 2d 1233 (1960).
The Committee Reports on the 1954 Code also make it clear that the Congress intended to exercise its fullest taxing power in Section 61:
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Wilson v. United States, 7282.
...the payment in his gross income. Taxpayer2 paid the tax and sued in the district court for its recovery. The court denied relief, D.N.H., 1968, 292 F. Supp. 200, and taxpayer The facts were undisputed. Taxpayer was a state policeman. He worked a nine hour shift, during which he normally ate......
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Tougher v. Comm'r of Internal Revenue , Docket No. 4335-67.
...911 (C.A. 5); Keeton v. United States, 256 F.Supp. 576 (D. Colo.), affirmed per curiam 383 F.2d 429 (C.A. 10); but cf. Wilson v. United States, 292 F.Supp. 200 (D.N.H.). ...