*783 Where petitioner received compensation for services rendered as an assistant attorney for the Sanitary District of Chicago in making investigations and recommendations with reference to pending cases, and he maintained his own private office and engaged in the general practice of law, and no showing was made that the district exercised any detailed control as to what should be done, or how, or when it should be done, held, that the compensation so received is not exempt from Federal taxation.
*237 This is a proceeding for the redetermination of a deficiency in income tax for the year 1927 in the amount of $96.50, and for the year 1928 in the amount of $86.51.
The sole question involved is whether the compensation received by the petitioner from the Sanitary District of Chicago (hereinafter referred to as sanitary district) during the year 1927, amounting to $4,000, and during the year 1928, amounting to $5,500, is exempt from Federal income tax.
FINDINGS OF FACT.
The petitioner, a resident of Peoria, Illinois, is an attorney at law with offices in that*784 city. During the taxable years involved he was engaged in the general practice of law in Peoria and maintained therein his private offices, no part of the expense of which was paid by the sanitary district. He reported as gross income the respective sums of $10,170.71 and $5,492.98, from which were deducted certain items of expense. He did not, however, include in his report of gross income the amounts received from the sanitary district.
The sanitary district is a political subdivision of the State of Illinois, organized under an act of the legislature, and is engaged in an essential governmental function, namely, that of sanitation. It is managed by a board of trustees elected by popular vote. On December 2, 1925, it adopted and passed an ordinance, duly recommended by its committee on rules, Rule 8 contained therein reading as follows:
The Committee on Employment shall appoint all employees of The Sanitary District of Chicago and the Chairman of said Committee shall certify in writing to the head of the proper department, and to the Clerk, the names of all such employees, stating the positions to be filed [filled] and the compensation to be *238 paid to such employees. *785 Thereupon it shall be the duty of such head of the department and the Clerk of The Sanitary District of Chicago to include the name of each employee upon the pay-roll of The Sanitary District of Chicago. The Committee on Employment may suspend heads of departments, provided such suspension is reported to the Board, and may discharge any employee when, in its judgment, it shall deem it advisable for the good of the service.
On May 1, 1927, a letter was written by T. J. Crowe, chairman of the committee on employment, to Maclay Hoyne, general attorney, stating: "This is your authority for employing J. E. Houston, Peoria, Illinois, as an Asst. Attorney, Illinois Valley, at $500 per month (by voucher) effective May 1."
Petitioner had performed some special work for the board prior to May 1, 1927, for which he rendered invoices for the services at the conclusion of them. He was called before the board, made certain oral reports and was advised that there would be further and 0ther work to be done, but he expressed some reluctance to accept additional special employment "because it interfered with other plans."
As a result of further conferences and some correspondence, he did, *786 however, render services between May 1, 1927, and November 30, 1928, being paid therefor at the rate of $500 per month. Apparently no written contract was entered into and, while petitioner testified that he had been "employed" as an assistant attorney "effective as of May 1, 1927", under date of May 31, 1927, he wrote the chairman of the board of trustees inquiring whether the letter of authority for his permanent employment had been written to the law department, stating in part:
Have heard nothing relative to the matter since April 5th at which time you stated everything was all right and it was merely a matter of determination as to whether I would be paid by voucher on regular roll, or should submit monthly invoices at the figure which we had talked about.
If you have not, I trust you will, at your first June meeting, dispose of the matter.
The work performed by petitioner after May 1, 1927, was of the same general character as the work performed by him prior to that date. No "term of employment" was prescribed for him by any statute or ordinance nor was he "employed" for any definite period.
Petitioner's office was in Peoria, about 160 miles from Chicago where the*787 general offices of the sanitary district were located. The sanitary district, however, also maintained offices at Chillicothe and Peoria, but did not furnish office space for petitioner. He was not required to take an oath or to furnish a bond, and did not do so. He had certain consultations with the chief law clerk and with other assistant attorneys at Chicago and reported to, but never consulted with, the general attorney. The chief law clerk assigned the cases to him but did not direct the disposition to be made of them. It *239 was testified by petitioner that "it would be the other way", namely, that they who were engaged in handling the cases in the field "advised with" the chief law clerk.
The Illinois Valley Claims Commission was created by an act of the general assembly for the purpose of attempting to adjudicate claims against the sanitary district by reason of overflow of the Illinois River, used by it for sanitation. There were some four hundred cases pending before the commission, and in the courts, and petitioner's work - as he testified - "was in this Illinois River Valley, with respect to the Illinois River Claims Commission cases", and consisted chiefly*788 in making investigations and recommendations of settlements in the pending cases.
The first payment to petitioner after May 1, 1927, was made upon a memorandum from the law department, approved by Maclay Hoyne, attorney, audited for the department by the chief clerk and entered by the auditor of disbursements, reading as follows:
| 1927. As authorized by an order of the Board of Trustees of The Sanitary District of Chicago, passed October 8, 1925. (page 888 of the Proceedings.) | |
| In payment for services as Assistant Attorney, Illinois Valley Claims Commission, for period May 1st, 1927 to June 30th, 1927. | |
| ONE THOUSAND AND NO/100 DOLLARS | $1,000.00 |
The page "of the proceedings" was not introduced in evidence.
Petitioner's services were secured on account of his familiarity with the matters involved, and his special qualifications to handle them. The motivating influence surrounding his employment was the desire of the sanitary district to have the benefit of his judgment, discretion and skill, which he was free to exercise.
OPINION.
MELLOTT: Under the above facts, are the amounts paid to petitioner exempt from the payment of the Federal income tax?
*789 Much has been written by the courts and by this Board upon the rather vexing question involved herein. The rule is well settled and not difficult to understand, though its application has sometimes given difficulty.
Petitioner claims that he was an "employee" of a political subdivision of the state and that his services were rendered in connection with the exercise of an essential or usual governmental function. It is axiomatic that one claiming immunity from the imposition of a tax must bring himself clearly within the exemption. Has petitioner done so?
Under substantially similar facts we have frequently held that taxpayers were not entitled to immunity from the Federal income *240 tax. ; ; ; ; ; ; . The "polestar" which has guided us chiefly has been the case of *790 . See also ; ; ; ; and ; certiorari denied, .
Petitioner attempts to distinguish his case from In that case the court held the mere fact that the taxpayer was required to report to the general attorney from time to time as to what had been done did not "show that the General Attorney exercised any detailed control as to what should be done, and how it should be done, which is essential to the relationship of employer and employee."
Petitioner has not only failed to show any substantial difference between his case and that of the petitioner in the Haight case, but, under cross-examination, brought himself clearly within the rules enunciated, and the reasoning applied, in that case.
Q. As a matter of fact, your services were secured on account of your familiarity*791 with the matters, were they not, and your special qualifications to handle them?
A. They told me that.Q. As a matter of fact, it was for the benefit of your judgment and your discretion and your skill that the Sanitary District obtained your services.
A. they said that that was so.
Q. As a matter of fact, you did the same work that you previously did, did you not?
A. The same character of work, yes sir. And in addition other work.
The facts show that petitioner was not furnished office space, although the sanitary district maintained and office in Peoria, where the major portion of his work was being performed. He maintained his own private office and was free to engage, and did engage, in work other than rendering services to the sanitary district, for which he received sums equal to, or in excess of, those paid by the sanitary district. The sanitary district apparently was simply another client.
The record fails to show that the general attorney exercised any control whatever as to what should be done, how it should be done, or even when it should be done. The only showing in that connection was, as testified by the petitioner, that he "reported to*792 the General Attorney from time to time." That circumstance was not considered sufficient in the Haight case, supra, to establish the relationship of *241 employer and employee and we do not believe that it should be deemed sufficient in this case.
We hold that petitioner was not an employee of the sanitary district engaged in rendering services in connection with the exercise of an essential or usual governmental function, and that he is not entitled to immunity from the Federal income tax upon the sums received.
Reviewed by the Board.
Judgment will be entered for the respondent.