Upham v. Commissioner

ROY UPHAM, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
Upham v. Commissioner
Docket No. 16105.
United States Board of Tax Appeals
16 B.T.A. 950; 1929 BTA LEXIS 2484;
June 7, 1929, Promulgated

*2484 Traveling expenses of the petitioner in attending medical conventions constitute legal deductions from gross income.

Franklin M. Tomlin, Esq., for the petitioner.
Bruce A. Low, Esq., for the respondent.

SMITH

*950 This is a proceeding for the redetermination of deficiencies in income tax for 1920 and 1921 of $88.59 and $703.69, respectively. The point in issue is whether certain traveling expenses paid by the petitioner in connection with attending conventions of medical societies are legal deductions from gross income either as ordinary and necessary expenses or as contributions to the societies.

FINDINGS OF FACT.

The petitioner is a practicing physician and surgeon of Brooklyn, N.Y. In 1920 he was president of the Homeopathic Medical Society of the State of New York, which is a New York corporation, whose object is -

to promote the science and art of medicine, to diffuse medical knowledge, to safeguard the material interests of the profession, to obtain the enactment and enforcement of just medical laws, and especially to secure the general recognition and acceptance of Homeopathy.

It has no capital stock and no part of its income*2485 inures to the benefit of any private stockholder or individual. As president the petitioner during 1920 attended many conventions and societies in New York State and in other portions of the United States and expended $750 in traveling expenses for which he was not reimbursed by the Society.

In 1921 the petitioner was a member and vice president of the American Institute of Homeopathy, incorporated under the laws of the District of Columbia. This is a national organization whose membership is made up of homeopathic physicians in the United States. It was organized and operates for scientific and educational purposes only. It holds an annual convention, and occasional meetings throughout the year, for the presentation of scientific papers and the discussion of questions of interest to its members. The only paid officers of the Society in 1921 were the secretary of the board of trustees and the editor of the Journal, who received a salary of $175 a month each, one to supervise the office clerical work and the other to edit the Journal. The president and vice president received *951 no salaries. They were, however, entitled to receive reimbursement for traveling expenses*2486 but the petitioner, as vice president, made no claim for such reimbursement for traveling expenses and received none. In 1921 he made four trips to Chicago to attend various meetings, at which he personally presented scientific papers. He attended a four-day meeting of the Southern Society at Cincinnati, Ohio. He attended a meeting in Norwick, Conn., in October; also one in Kansas City, two in Washington, and one in Boston. He made one trip to Dayton, Ohio, to appear before the Ohio State Homeopathic Society. He made four trips to Philadelphia, appearing before the Philadelphia Society. He made a trip to Baltimore attending the meeting of the Maryland State Society. He was official delegate appointed by the American Institute of Homeopathy to attend a meeting of the International League in Geneva, Switzerland. The traveling expenses paid by the petitioner in 1921 for which he was not reimbursed amounted to or exceeded $3,000.

The traveling expenses paid in 1920 and 1921 were claimed as deductions from gross income in the petitioner's tax returns for those years but were disallowed by the Commissioner in determining the deficiencies herein involved.

OPINION.

SMITH: *2487 The petitioner claims the deduction of the traveling expenses paid in 1920 and 1921 either as ordinary and necessary expenses or as contributions to the corporations with which he was connected. It is alleged by the petitioner that the amounts of the traveling expenses did not in either year exceed 15 per cent of his taxable income. It is, therefore, unimportant to determine whether they were ordinary and necessary expenses of the petitioner's business or whether they were contributions. So far as the year 1920 is concerned we think that they were legal deductions from gross income within the decisions of the Board in ; ; ; and . The petitioner was apparently entitled to reimbursement for traveling expenses of 1921. He did not, however, elect to claim reimbursement. The amounts constituted contributions to the American Institute of Homeopathy. The evidence shows that this was a corporation organized and operated exclusively for scientific or educational purposes and that no part of its*2488 net earnings inured to the benefit of any private stockholder or individual. The amounts paid, therefore, constitute a legal deduction from gross income under section 214(a)(11) of the Revenue Act of 1921.

Judgment will be entered under Rule 50.