*964 Petitioner's mother, who was without means of support and made her home with and was supported by petitioner, was adjudged insane and committed to the state hospital by a court of competent jurisdiction, where she was supplied with food and medical treatment, but petitioner furnished all necessary clothing and many necessities and some luxuries. Held, under the facts here petitioner was entitled to the $2,500 exemption as head of a family.
*928 This proceeding involves deficiencies and penalties for the taxable years in the amounts following:
| Year | Deficiencies | Penalties |
| 1932 | $27.68 | $6.92 |
| 1933 | 39.64 | 9.91 |
| 1934 | 32.23 | 8.06 |
| Total | 99.55 | 24.89 |
Two issues are presented; first, whether petitioner was, during the taxable years, the head of a family and entitled to the statutory exemption of $2,500, and, second, whether respondent erred in imposing the 25 percent penalty for failure to make and file a return within the time prescribed by law.
The proceeding*965 was submitted upon a stipulation of facts, oral testimony, and briefs.
FINDING OF FACT.
Petitioner has resided, made her home, and been employed as a stenographer in Chicago, Illinois, continuously from January 1927 to *929 date. Mary White, who is divorced, is the mother of petitioner, and was residing and making her home with petitioner on September 6, 1930, having resided and made her home in Chicago with petitioner from January 1927. Since January 1927 Mary White has had no income whatsoever and she has no trade, business, or occupation.
On or about September 6, 1930, upon the petition of the taxpayer and in accordance with an order of the County Court of Cook County, Chicago, Illinois, entered September 5, 1930, said Mary White, who had been ill with a mental disorder and was in need of hospital care, was adjudicated insane and committed for treatment to the Elgin State Hospital in Elgin, Illinois. The records of the hospital show that, upon her admittance thereto, the board of examiners of the hospital found Mary, White to be "insane" (paranoid dementia praecox). The records of the hospital show that during the taxable years Mary White was paroled to petitioner*966 as follows:
| Paroled | May 29, 1932 | Returned | May 30, 1932 |
| Dec. 24, 1932 | Dec. 31, 1932 | ||
| Jun. 3, 1933 | Jun. 4, 1933 | ||
| Jul. 1, 1933 | Jul. 8, 1933 | ||
| Jun. 17, 1934 | Jul. 1, 1934 | ||
| Jul. 1, 1934 | Jul. 23, 1934 |
During the aforesaid periods Mary White was in the custody and care of the petitioner.
In addition to the above mentioned periods, Mary White was permitted to leave the hospital with petitioner by virtue of a pass given the petitioner by the hospital authorities. Petitioner visited her mother at not less than two-week intervals and usually every week. Upon these occasions the mother would spend the night with her daughter in a hotel or a furnished room. Petitioner provided her mother with clothing and wearing apparel, and bought her meats, fruits, vegetables, and groceries to supplement the food provided by the hospital. She also purchased her mother's toilet articles, drugs, and medicines, provided her with amusement and entertainment in the hope that it would facilitate the hospital treatment, and furnished her with at least $2 a week spending money. Petitioner estimated that her monthly expenditures in caring and providing*967 for her mother during the taxable years amounted to $60 a month.
During the years that she was a patient in the hospital, Mary White worked in the hospital laundry or elsewhere, but no clothing or wearing apparel was furnished her by the State of Illinois or the Elgin State Hospital. At the time of her commitment, it was thought that her stay would be temporary and none of her belongings were taken with her to the hospital. They remained with petitioner. She considered her home was with petitioner and expected to return to her daughter's home as soon as she had sufficiently recovered.
*930 After Mary White's commitment for treatment in the Elgin State Hospital, and during the period September 6, 1930, to June 29, 1937, except when under the care and custody of petitioner, said Mary White was maintained and treated at the expense of the State of Illinois. The handbook of information of the Elgin State Hospital for 1937, which was attached to the stipulation of facts as an exhibit, states that the average cost per patient for 1935-1936 was $227.32. It also states that relatives were expected to furnish necessary clothing whenever possible.
On or about June 30, 1937, Mary*968 White was paroled to petitioner and has been in her custody and care since that date. On or about September 29, 1937, she was discharged from the Elgin State Hospital as "improved." No proceedings have been instituted in the County Court of Cook County for her restoration, and no order of restoration has been entered in that court.
Until shortly prior to April 4, 1935, petitioner believed that there was no question but that she was the head of a family, that she was entitled to a personal exemption credit of $2,500 against her net income for the taxable years 1932, 1933, and 1934, and that, since her net income for each of said years did not exceed the amount of the personal exemption credit, she need not file income tax returns for those years. However, shortly prior to April 4, 1935, an internal revenue agent informed her that there was some question as to her right to claim personal exemption as the head of the family, and on or about April 4, 1935, petitioner filed with the collector of internal revenue for the first district of Illinois her Federal income tax returns for the taxable years, and with each return filed an affidavit in support of her claim for exemption.
*969 On July 12, 1936, and on April 8, 1937, petitioner paid under protest to the collector of internal revenue for the first district of Illinois $124.49 and $13.62, the former payment being on account of the deficiency of petitioner's income tax and 25 percent penalty thereon determined by the Commissioner for the calendar and taxable years herein, and the latter payment being the amount of interest thereon.
During the taxable years petitioner's sister was living with her and was earning approximately $162.50 a month during the greater portion of those years. Petitioner's income during the taxable years 1932, 1933, and 1934 was $2,009, $1,991, and $2,006.50, respectively.
Petitioner's mother was dependent on petitioner for support and maintenance during the years before us except to the extent she was supplied by the state while in the hospital.
The petition herein was filed March 9, 1936.
*931 OPINION.
ARNOLD: Section 25(c) of the Revenue Act of 1932 provides that there shall be allowed for the purpose of the normal tax, but not for the surtax, a personal exemption credit of $2,500 in the case of "the head of a family." Section 25(b) of the Revenue Act of 1934*970 provides the same personal exemption for the head of a family, but allows the credit for the purposes of the normal tax and the surtax. There is no statutory definition in either of those acts of the "head of a family."
Article 292 of Regulations 77 and article 25-4 of Regulations 86 interpret the statutory phrase "head of a family" to mean "one who actually supports and maintains in one household one or more individuals who are closely connected with him by blood relationship, * * * and whose right to exercise family control and provide for these dependent individuals is based upon some moral or legal obligation." Article 292 and article 25-4 being identical, we have set forth in the margin the provisions of article 292. 1 Prior decisions of this Board have considered the above definition and have held that it was a fair interpretation of the statute, and had the force and effect of law. ; affd., per curiam, . See also *971 , and cases cited.
*972 Petitioner has attempted to bring herself within the above definition by showing that she actually supported and maintained a home for her mother before and after commitment, and that in addition she partially supported and maintained her mother during the taxable years. It is stipulated that Mary White was "maintained and treated" at the expense of the State while in the hospital, but petitioner has testified that additional maintenance was necessary on her part in order to supplement the maintenance provided by the state. She has estimated that this additional maintenance cost her on an average of $60 a month during the taxable years, and we have *932 set forth in our findings the articles purchased and the expenses of the petitioner in providing and caring for her mother while the latter was in the hospital.
The evidence indicates that petitioner's mother was maintained and partially supported both by the State of Illinois and by her daughter, the petitioner herein. Assuming that the per capita cost of maintenance during the taxable years was comparable with the per capita cost as indicated in the handbook of information of the Elgin State Hospital, it appears that*973 petitioner expended more for the maintenance, support, and care of her mother than was expended by the state. If, therefore, this proceeding is to turn upon the relative amounts expended by the contributors to the maintenance of Mary White, the petitioner should be considered her mother's chief support.
The regulations recognize that there need not be continuous, actual residence together if circumstances justify the separation and there is a necessity for continuously maintaining the dependent elsewhere. The record here fully establishes the necessity for the mother's absence from her daughter's home. Her mental condition required hospitalization and it was so ordered by the county court. The Illinois statutes clearly obligate a daughter to provide for her dependent mother; and, in cases of commitment of insane people to state hospitals, clearly obligate the relatives of the party committed to provide clothing, transportation, and other incidental expenses not constituting any part of the maintenance or treatment by the state. Secs. 1 and 2, ch. 107, and secs. 15 and 16, ch. 85, Cahill's Illinois Revised Statutes (1929).
This record reveals that petitioner was actually*974 supporting and maintaining her mother, was legally and morally obligated by blood relationship and statute to care and provide for her, and, in view of her mother's mental condition, was necessarily exercising some degree of control over her, particularly on those occasions when she took her mother from the hospital. Petitioner fully expected her mother to return to her home as soon as she had sufficiently recovered, and her mother expected to do so. It was impossible to determine when that would be, owing to the nature of her mother's condition, but it was thought her stay at the hospital would be temporary only. We are satisfied that petitioner has established her right to the personal exemption credit granted to the head of a family. The fact that petitioner's sister was gainfully employed and made her home with the petitioner is no basis, in and of itself, for denying the exemption. Petitioner's testimony and the testimony of her mother equally refute any inference that Mary White was securing any maintenance or support from any source except the State of Illinois*933 and this petitioner. As between the State and petitioner we are of the opinion that Mary White was*975 dependent upon and looked to petitioner for her chief maintenance, and that the hospital primarily provided medical treatment as distinguished from maintenance and support.
In view of our decision on the first issue, there will be no deficiency for any of the taxable years, and, therefore, no penalty can be imposed for failure to file timely returns. Since petitioner has paid the deficiencies asserted and interest thereon subsequent to filing her appeal, there has been an overpayment of tax in each year. The parties should submit computations showing the amount of overpayment for each of the taxable years, from which the Board can enter its final order. Sec. 322, Revenue Act 1934; sec. 322, Revenue Act of 1932, as amended by sec. 504, Revenue Act of 1934.
Reviewed by the Board.
Decision will be entered under Rule 50.
Footnotes
1. ART. 292. Personal exemption of head of family.↩ - A head of a family is an individual who actually supports and maintains in one household one or more individuals who are closely connected with him by blood relationship, relationship by marriage, or by adoption, and whose right to exercise family control and provide for these dependent individuals is based upon some moral or legal obligation. In the absence of continuous actual residence together, whether or not a person with dependent relatives is a head of a family within the meaning of the Act must depend on the character of the separation. If a father is absent on business, or a child or other dependent is away at school or on a visit, the common home being still maintained, the additional exemption applies. If, moreover, through force of circumstances a parent is obliged to maintain his dependent children with relatives or in a boarding house while he lives elsewhere, the additional exemption may still apply. If, however, without necessity the dependent continuously makes his home elsewhere, his benefactor is not the head of a family, irrespective of the question of support. A resident alien with children abroad is not thereby entitled to credit as the head of a family.