*266 Petitioner Jack Ward, for the calendar year 1947, computed tax on his income under Supplement T,
For the calendar year 1948, the petitioners are held not entitled to the deduction of Oklahoma cigarette tax, a sewer service charge, repairs to their personal watches, and cost of a telephone.
Respondent is sustained in his computation of the tax for the calendar year 1948 on the basis of a joint return.
Memorandum Opinion
HILL, Judge: These two proceedings were consolidated*267 for purposes of hearing and decision. In Docket No. 27164, respondent has determined a deficiency in income tax against the petitioner Jack Ward in the sum of $37 for the calendar year 1947. In Docket No. 26687, respondent has determined a deficiency against the petitioners Jack and Katherine Ward of $37.20 in income tax for the calendar year 1948. In this docket the respondent has, by amendment to his answer, asked an increase in the determined deficiency of $37.20 to $120.11.
The proceedings were heard at Muskogee, Oklahoma, on May 8, 1951, before Henry C. Stockell, who was designated as a Commissioner of the Court pursuant to Rule 48 of the Rules of Practice of the Tax Court and
Docket No. 27164
The petitioner Jack Ward, for the calendar year 1947, filed a separate return with the collector of internal revenue for the district of Oklahoma, reporting gross income of $3,069.61, and arriving at adjusted gross income of $2,856.71 by the deduction of $212.90, representing the alleged cost of work*269 clothing and laundry thereof of $174.90, union dues $36, and Christmas gifts made for business reasons, $2. He elected to compute his tax by the use of the table of Supplement T,
Petitioner, having elected to compute his tax under Supplement T, on the basis of adjusted gross income, which election is irrevocable,
Docket No. 26687
The petitioners, Jack and Katherine Ward, are husband and wife and residents of Muskogee, Oklahoma. For the calendar year 1948 they filed separate, individual income*270 tax returns with the collector of internal revenue for the district of Oklahoma. The return filed by the petitioner Katherine Ward carried a statement on the face thereof that such form was submitted in support of a claim for refund of a tax previously paid and was not a return of income. It showed gross wages received by her in the calendar year 1948 in the sum of $473.75, with income tax withheld from such wages in the amount of $71.40, showed no income tax due, and requested refund in the amount of $71.40. The income tax return filed by petitioner Jack Ward claimed three exemptions, for himself, his wife and son. The income reported included none of the income received by his wife. On this return he reported gross wages earned by him in the amount of $3,512.97. On a schedule attached to the return he itemized certain deductions totaling $659.40, as follows:
| Contributions: | ||
| Central Baptist Church | $ 30.00 | |
| Red Cross | 5.00 | |
| Community Chest | 2.00 | |
| Salvation Army | 5.00 | |
| Boy Scouts | 1.00 | |
| March of Dimes | 1.00 | |
| Christmas Seals | 2.00 | $ 46.00 |
| Interest: | ||
| First Natl. Bank | 61.00 | |
| Central Furniture | 40.00 | |
| Life Insurance Loan American | ||
| National | 12.60 | 113.60 |
| Taxes: | ||
| Sales Taxes | 55.00 | |
| Cigarette State Taxes | 73.00 | |
| Automobile License Tax | 5.50 | |
| Automobile Operators License | ||
| Tax | 1.00 | |
| Gasoline Taxes (State) 780 | ||
| gal. at 5 1/2" | 42.00 | |
| City General Sewer Revenue | ||
| Tax | 6.00 | 182.50 |
| Losses: | ||
| Loss of billfold; Left billfold | ||
| valued 12.00 containing 5.00 | ||
| in telephone booth stolen. | ||
| Reported to police not re- | ||
| covered | 17.00 | |
| Breakage of watch: Wife: | ||
| Dropped watch on floor at | ||
| Star Printery | 6.00 | |
| Husband: Struck arm and | ||
| watch against desk at tele- | ||
| phone office while at work. | ||
| Repairs | 3.50 | 26.50 |
| Medical: | ||
| Medicines | 65.00 | |
| Dr. Matthews | 25.00 | |
| Dr. Bernice Daniels | 40.00 | |
| Thermometer | 2.00 | |
| Vitamins | 16.00 | |
| Hygenic Supplies | 15.00 | |
| Dental Supplies | 12.84 | |
| Hospitalization Ins. Prem. | 26.40 | |
| 202.24 | ||
| Less 5% X 3512.97 | 175.65 | 26.59 |
| Miscellaneous: Ordinary and | ||
| necessary expenses in con- | ||
| nection with employment | ||
| (not reimbursed) | ||
| Depreciation tools and equip- | ||
| ment | 73.33 | |
| Special work clothes (used | ||
| specifically in conducting | ||
| my trade not for general | ||
| social wear) | 74.00 | |
| Laundry of work clothes 52 | ||
| wks. at 1.00 | 52.00 | |
| Union Dues | 36.00 | |
| Telephone (business) | 23.88 | |
| Accountants fees | 5.00 | 264.21 |
| Total itemized deductions | $659.40 |
*271 In determining the deficiency, the respondent allowed the listed deductions representing contributions, interest and medical expenses, but disallowed the items of state cigarette tax, $73; sewer tax, $6; losses of $6 and $3.50 for breakage of watches of petitioner and his wife; cost of special work clothing, $74; laundry of the same, $52; and telephone costs of $23.88.
Error is assigned by the petitioners upon these disallowances by respondent and upon his action in computing the tax on the basis of a joint return.
During the calendar year 1948 petitioner Jack Ward was a central office repair man in the employ of Southwestern Bell Telephone Co., at Muskogee, Oklahoma. During that year these two petitioners purchased cigarettes in the State of Oklahoma upon which Oklahoma cigarette tax had been paid in the amount of $54.75, as evidenced by cigarette stamps affixed to the packages of cigarettes prior to their purchase by petitioners. The action of the respondent in disallowing deduction of this tax, under the circumstances here shown, is approved.
The petitioner Jack Ward, during the calendar year 1948, paid*272 $6 sewer charge under Ordinance No. 1633 of the City of Muskogee, Oklahoma. The deduction of this expenditure was made on the ground that it represented a tax. This charge is a sewer service charge and is not a tax, and respondent is sustained upon his disallowance thereof.
Petitioner Jack Ward, on his return for 1948, deducted $6 for repairs to a watch belonging to his wife and $3.50 for repairs to his own watch, stated on the return to have been broken during the course of his work when it fell from his pocket to the floor. No evidence was introduced at the hearing as to the item claimed for the breakage of the watch of petitioner Katherine Ward. The deduction of the alleged cost of repair of these watches was claimed on the return as a casualty loss but it manifestly does not come within this classification, as the damage did not occur by reason of an accident falling in the general category of storm, fire or shipwreck, within section 23 (e) (3) of the
During the calendar year 1948 the petitioner Jack Ward maintained a telephone in his home which was used for the personal convenience of himself and family and also at times for matters in connection with his employment. This telephone was installed for the reason that this petitioner desired a telephone for his personal use and was also directed by his employer to install one. The telephone company by which he was employed granted him a rate for service on this telephone below that charged the public. This discount was for the purpose of compensating him for such business as was represented in the use of the telephone by the petitioner in connection with his employment. Upon these facts, it appears clear that the actual expense borne by the petitioner with respect to this telephone was personal in character and represented the use made of it by him or members of his family in matters not affecting his employment. Respondent's action on this item is approved.
*274 Upon the record, we hold that respondent did not err in computing the deficiency upon the basis of a joint return of the two petitioners. The petitioners, during the calendar year 1948, were residents of Oklahoma, and each was vested with an undivided one-half interest in the earnings of the other under Oklahoma Laws, 1945, page 118, section 3. Each spouse was required to report one-half of the income of the other if separate returns were filed.
It is noted that the petitioners have also assigned as error the action of respondent in computing the tax under the provisions of Supplement T,
In Docket No. 27164 decision will be entered for the respondent.
In Docket No. 26687 decision will be entered under Rule 50.