Mathews v. Commissioner

*211OPINION.

Smith :

The question presented by this proceeding is whether the income received by the petitioner as compensation for legal services rendered the Board of County Commissioners of Duval County, Florida, during the year 1923, is exempt from taxation by the United States:

Section 1211 of the Revenue Act of 1926 provides:

Any taxes imposed by the Revenue Act of 1924 or prior revenue Acts upon any individual in respect of amounts received by bim as compensation for personal services as an officer or employee of any State or political subdivision thereof (except to the extent that such compensation is paid by the United States Government directly or indirectly), shall, subject to the statutory period of limitations properly applicable thereto, be abated, credited, or refunded.

No contention is made that the petitioner was an officer of Duval County and the record does not disclose that he was such an officer. *212The statutes of the State of Florida do not provide for a county attorney in addition to the prosecuting attorney (which the petitioner was not), and he took no oath of office.

The only real question before us is whether the petitioner was an employee of the State of Florida or of a political subdivision thereof within the meaning of section 1211 of the Revenue Act of 1926.

A situation similar to the instant case was before the United States Supreme Court in the case of Metcalf & Eddy v. Mitchell, 269 U. S. 514. The question there was as to whether certain consulting engineers engaged to advise States and subdivisions with reference to water and sewerage projects not required to take any oath or forego other employment as officers or employees of the State or subdivision within the meaning of section 201(a) of the Revenue Act of 1911, which contains a provision for exemption from tax as follows:

This title shall apply to all trades or businesses of whatever description, whether continuously carried on or not, except—
(a) In the case of officers and employees under the United States, or any State, Territory, or the District of Oolumbia, or any local subdivision thereof, the compensation or fees received by them as such officers or employees.

The court held that in the circumstances of the case the petitioners were not officers of any State. The court then stated:

Nor do the facts stated in the bill of exceptions establish that the plaintiffs were “ employees ” within the meaning of the statute. So far as appears, they were in the position of independent contractors. The record does not reveal to what extent, if at all, their services were subject to the direction or control of the public boards or officers engaging them. In each instance the performance of their contract involved the use of judgment and discretion on their part and they were required to use their best professional skill to bring about the desired result. This permitted to them liberty of action which excludes the idea that control or right of control by the employer which characterizes the relation of employer and employee and differentiates the employee or servant from the independent contractor. Chicago, Rock Island & Pacific Ry. Co. v. Bond, 240 U. S. 449, 406, 36 S. Ct. 403, 60 L. Ed. 735; Standard Oil Co. v. Anderson, 212 U. S. 215, 227, 29 S. Ct. 252, 53 L. Ed. 480. And see Casement v. Brown, 148 U. S. 615, 13 S. Ct. 672, 37 L. Ed. 582; Singer Mfg. Co. v. Rahn, 132 U. S. 518, 523, 10 S. Ct. 175, 33 L. Ed. 440.

The facts in this case are substantially different from those which obtained in the case of Metcalf & Eddy v. Mitchell, supra. Here the petitioner was employed for a definite period at a definite monthly salary. He was required to attend all meetings of the Board of County Commissioners; to give legal advice concerning all routine matters coming before the Board; to attend to all legal matters in connection with bond issues; and in general to do the legal work of the Board. He was under the direction of the Board during the entire taxable period and practically all of his energies during the *213year 1923 were devoted to tbe Board. We do not understand it to be the ruling of the Supreme Court that the relationship of employer and employee obtains only where the relationship of master and servant obtains and then only whenever the employer retains the right to direct the manner in which the business shall be done as well as the results to be accomplished, in other words, not only what shall be done, but how it shall be done. See Vane v. Newcombe, 132 U. S. 220. If this were so a physician who might be employed by a railroad company to devote his entire activities to the company could not be an employee of the company because clearly in such a case the employer would not expect to tell the physician how his work should be done. A skilled laborer is no less an employee because he uses his skill in the performance of his work. The term “ employee ” should not in our opinion be restricted only to menials. The petitioner was in our opinion an employee of the Board of County Commissioners of Duval County, Florida, during the year 1923, within the meaning of section 1211 of the Revenue Act of 1926. Cf. Robert G. Gordon, 5 B. T. A. 1047; Emma B. Brunner, Executrix, 5 B. T. A. 1135; Fred H. Tibbetts, 6 B. T. A. 827.

Reviewed by the Board.

Judgment will be entered for the petitioner on 15 dags’ notice, under Rule 50. *