1949 U.S. Tax Ct. LEXIS 25">*25 Decision will be entered for respondent.
Upon the facts, held, petitioner's employment in Oak Ridge, Tennessee, was indefinite and, hence, the expenses involved are not deductible under section 23 (a) (1) (A) of the Internal Revenue Code. Commissioner v. Flowers, 326 U.S. 465">326 U.S. 465.
13 T.C. 880">*880 The Commissioner determined a deficiency of $ 191 in income tax for the calendar year 1945. The only issue is whether the petitioner is entitled to a deduction for board and lodging as travel expense under section 23.
FINDINGS OF FACT.
The petitioner filed his individual income tax return for 1945 with the collector of internal revenue for the district1949 U.S. Tax Ct. LEXIS 25">*26 of Tennessee. He was married, but had no children.
Prior to the year here involved petitioner worked for several general construction firms on heavy construction. His employment took him for relatively short periods to the various places where some construction work was being done. During this time his home was in Bakewell, Tennessee, and his wife remained there while he was away from home working on each job because the period of his stay at any one place was temporary and it was impractical for his wife to accompany him.
13 T.C. 880">*881 Sheet Metal Local 51 of Chattanooga, of which he was a member, sent the petitioner to Oak Ridge, Tennessee, early in 1944. Oak Ridge is about 75 miles from Bakewell. His work there was intermittent during 1944 and occasionally he returned home, where he obtained other work part of the time and remained idle the remainder. During 1945, the year in question, he was in Oak Ridge a total of 357 days. The work at Oak Ridge was on the Atomic Energy Plant. The petitioner never had any intention of remaining permanently at Oak Ridge. His work there terminated in 1946. Petitioner was in Oak Ridge during a total of approximately 30 months. His employment1949 U.S. Tax Ct. LEXIS 25">*27 during 1945, the year in question, in Oak Ridge was indefinite.
The petitioner, while at Oak Ridge, was required to work for his employer until released. He could not obtain other work without a release. A workman was required to leave the reservation within 12 hours after his employment was terminated at Oak Ridge.
There were many thousands of people working at Oak Ridge during 1945. Living quarters were meager and extremely scarce.
The petitioner worked during 1945 for the J. A. Jones Construction Co., a building contractor, on the construction of the plant. He received $ 4,901.26 as compensation during 1945. He lived during that time in a barracks furnished by his employer at a total charge of $ 121.73. He was not required to live in those quarters. No provision was made and no housing was available at or near Oak Ridge for the wife of a workman such as the petitioner. The petitioner ate at a cafeteria while at Oak Ridge and spent $ 714 for meals there during 1945.
The petitioner claimed a deduction of $ 835.73 on his 1945 return, representing the expenditure for room and board at Oak Ridge.
The Commissioner, in determining the deficiency, disallowed the deduction and explained1949 U.S. Tax Ct. LEXIS 25">*28 that "a taxpayer may not keep his place of residence at a point where he is not engaged in carrying on a trade or business and take a deduction from gross income for living expenses away from home."
OPINION.
Petitioner claims the right to deduct the amounts he expended during 1945 for meals and lodging as traveling expenses incurred while away from home under section 23 (a) (1) (A) of the Internal Revenue Code. Respondent, on the other hand, contends that those expenditures "were not ordinary and necessary business expenses incurred in the pursuit of the trade or business of the petitioner or that of his employer." Commissioner v. Flowers, 326 U.S. 465">326 U.S. 465; 13 T.C. 880">*882 rehearing denied, 326 U.S. 812">326 U.S. 812. We believe that respondent's determination must be sustained.
We have found as a fact that petitioner was employed by the Jones Construction Co. at Oak Ridge, Tennessee, for an indefinite period of time. We do not believe, in view of the facts of this case, that his employment there could be deemed temporary. During 1945, the year involved, petitioner worked in Oak Ridge a total of 357 days. Altogether he was there for a period1949 U.S. Tax Ct. LEXIS 25">*29 of approximately 30 months. It is therefore apparent that petitioner's principal place of employment or post of duty during 1945 was in Oak Ridge, Tennessee.
In view of these facts we think, as respondent contends, that this case is controlled by 326 U.S. 465">Commissioner v. Flowers, supra. In that case the taxpayer, a lawyer, maintained his home in Jackson, Mississippi. He was general counsel for a railroad company, with his principal place of employment in Mobile, Alabama. He continued, however, to maintain his home in Jackson and deducted from his gross income expenses incurred for meals and lodging while in Mobile and traveling expenses to and from there to Jackson, Mississippi.
The court held that before the expenditures in question could be deductible they must (1) be reasonable and necessary traveling expenses; (2) incurred "while away from home"; and (3) incurred in pursuit of a business, which means that there must be a direct connection between the expenditures and the carrying on of the business of the taxpayer's employer, and that such expenditures must be necessary to the employer's business or trade. If any one of these three requirements is1949 U.S. Tax Ct. LEXIS 25">*30 lacking, the expenses are nondeductible. See our discussion of the Flowers case in John D. Johnson, 8 T.C. 303.
The Supreme Court held in the Flowers case that requisite (3) had not been met, stating:
The facts demonstrate clearly that the expenses were not incurred in the pursuit of the business of the taxpayer's employer, the railroad. Jackson [here Bakewell] was his regular home. Had his post of duty been in that city the cost of maintaining his home there and of commuting or driving to work concededly would be non-deductible living and personal expenses lacking the necessary direct relation to the prosecution of the business. The character of such expenses is unaltered by the circumstances that the taxpayer's post of duty was in Mobile, [here Oak Ridge] thereby increasing the costs of transportation, food and lodging. Whether he maintained one abode or two, whether he traveled three blocks or three hundred miles to work, the nature of these expenditures remained the same.
The Court further stated:
Travel expenses in pursuit of business within the meaning of § 23 (a) (1) (A) could arise only when the railroad's business forced the 1949 U.S. Tax Ct. LEXIS 25">*31 taxpayer to travel and to live temporarily at some place other than Mobile, thereby advancing the interests of the railroad. * * *
For the reasons stated by the Supreme Court in the Flowers case we likewise believe that here requisite (3) is lacking. See also S. M. R. 13 T.C. 880">*883 , 6 T.C. 841; Arnold P. Bark, 6 T.C. 851; John D. Johnson, supra;Henry C. Warren, 13 T.C. 205.
The fact that housing conditions in Oak Ridge were such that it was difficult or impossible to bring his wife there with him is not of any help to petitioner in this case. We said in Henry C. Warren, supra, that "petitioner's maintenance of a home for his family in Cornelia [here Bakewell] may have been caused by housing shortage in Charleston, [here Oak Ridge] but that condition was irrelevant to the prosecution of his employer's business."
The deductions in question were properly disallowed.
Decision will be entered for respondent.
Murdock, J., dissenting: I think the result reached by the majority is not supported by the Flower1949 U.S. Tax Ct. LEXIS 25">*32 case, is unjust, and is contrary to the intent of Congress, while the opposite result is supported by authorities which have actually considered this question, is just, and is in accordance with the intent of Congress.
The Supreme Court was not thinking of a situation like the present one when it decided the Flowers case, in which the facts are unlike those here present, and it said nothing which decides this case against the petitioner. There, Flowers had permanent employment in Mobile and could have made his home there for all purposes. He chose, for personal reasons, to retain his residence in Jackson. Personal, family, or living expenses are not deductible. Sec. 24 (a) (1). Here, Jones had no choice. His expenses were unavoidably essential to his trade or business and to the employment. His home had always been at Bakewell and he could not avoid a duplication of homes and home expenses by moving his wife and his home to Oak Ridge or any other place which would have enabled him to do his work while living at such a home. The findings show that.
Also, Jones' employment at Oak Ridge was unlike Flowers' at Mobile, since it was temporary. It would not last beyond the time1949 U.S. Tax Ct. LEXIS 25">*33 when the heavy construction phase of the work was completed and it might end sooner. It was much more comparable to the employment in Harry F. Schurer, 3 T.C. 544, the only difference being that the construction at Oak Ridge took more time and the petitioner happened to be there during all of 1945. But that slight difference in time is not decisive. A member of this tribunal was once occupied for a similar time in Los Angeles in hearing a single case, but there was no question of his right to his allowance for board and lodging while away from home, Washington. There, as here, a significant fact was that the employment at the one place away from home was temporary. 13 T.C. 880">*884 The time was no more "indefinite" in the one case than in the other. Neither employment was expected to continue for more than a relatively short time, too short to justify moving his home. Neither was like the employment in the Flower case. Cf. Coburn v. Commissioner, 138 Fed. (2d) 763, where the taxpayer, an actor, was away from home for 263 days in one year making a motion picture, and Chester D. Greisemer, 10 B. T. A. 386,1949 U.S. Tax Ct. LEXIS 25">*34 where the taxpayer was away from home during several taxable years. See also Charles G. Gustafson, 3 T.C. 998.
I can think of no reason why Congress would want to deny these expenses, which were ordinary and necessary, indeed unavoidable, in the petitioner's business. It drew a line between family and living expenses, such as those incident to Jones' home in Bakewell, and those incurred beyond such expenses in an effort to earn income while away from home. The present expenses are of the latter kind and the statute is just in allowing them.