Peters v. Commissioner , 19 B.T.A. 901 ( 1930 )

JENNIE A. PETERS, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Peters v. Commissioner

Docket Nos. 35101, 46071.

United States Board of Tax Appeals

19 B.T.A. 901; 1930 BTA LEXIS 2309;

May 9, 1930, Promulgated

---

The traveling and subsistence expenditures here were not incurred in carrying on a trade or business within the meaning of the Acts and, consequently, are not deductible.

Arthur M. Kracke, Esq., for the petitioner.

Leslie Rushbrook, Esq., for the respondent.

---

MORRIS

These proceedings, consolidated for hearing and decision, are for the redetermination of deficiencies in income tax of $348.75 and $563.99 for the calendar years 1925 and 1926, respectively.

The sole question presented by the pleadings, whether the respondent erred in failing to allow certain traveling expenses in the computation of net income for the years 1925 and 1926, was submitted to the Board for consideration upon a stipulation of the facts entered into between the parties, which follows.

FINDINGS OF FACT.

Mrs. Jennie A. Peters is the widow of Frank M. Peters, deceased, said Frank M. Peters having died on the 30th day of June, 1921; that in his lifetime and up to the time of his death he was a practicing lawyer admitted to practice in the State of Illinois, with his office at the time of his death at Room 1009, #209 South La Salle Street, Chicago, Ill; that for approximately ten years prior to his death his office was at the same location.

At the time of his death he owned and maintained a home at two places - one in the City of Chicago, Ill., and the other at Mount Kisco, N.Y.; that neither Frank M. Peters nor the taxpayer owned any real estate in New York except the home in Mount Kisco. Shortly after his death, his widow, Jennie A. Peters, sold the Chicago home and retained the Mount Kisco home. Prior to the death of Frank M. Peters, his residence for the purpose of exercising his franchise to vote was Chicago, Ill.

During his lifetime and for ten years prior to his death he maintained an office at #209 South La Salle Street, Chicago, Ill., employed a secretary and bookkeeper, and made a great part of his investments from his Chicago office where he kept his books of account. After his death his widow, the taxpayer, Jennie A. Peters, retained the services of her deceased husband's secretary and bookkeeper and continued to lease the space, or part of the space, occupied by the deceased for a period of ten years before and up to the time of his death.

That Frank M. Peters during his lifetime was the principal stockholder of the Peters Machinery Co. and that his widow, Jennie A. Peters, at the time of the distribution of the deceased's estate, was awarded his stockholdings in the said Peters Machinery Co., the said Peters Machinery Co. being an Illinois corporation with its plant and principal office in the City of Chicago, Ill.; that the said Jennie A. Peters is a director and officer in the said Peters Machinery Co. and has been since the decease of her husband; that the only books of account kept by the said Jennie A. Peters were kept in the Chicago office of the petitioner located at #209 South La Salle Street, Chicago, Ill.; and that the taxpayer maintains a bank account in the City of Chicago, Ill., and purchases a large amount of her investment securities from investment houses located in the City of Chicago, Ill., and that the said petitioner does not now own any home or real property in the City of Chicago, Ill., and is required to stop at hotels for accommodations on her trips to Chicago, Ill., and did not own any property or home during the year 1925 and thereafter; that she makes the trips to Chicago from Mount Kisco for the purpose of conferring with her secretary and bookkeeper on questions of investment and to consult counsel regarding such investments and for the preparation of her tax returns, which are made from her records with the assistance of auditors who are employed and maintain their business office in the City of Chicago, Ill.; and that the expenditures disallowed by the Commissioner were expenditures made by her on trips to Chicago from Mount Kisco and returning to Mount Kisco in connection with the business above referred to.

OPINION.

MORRIS: The petitioner contends that she should be permitted to deduct from her gross income certain transportation and subsistence expenditures made by her in traveling from her home at Mount Kisco, N.Y., to Chicago, and return, for the purpose of conferring with her employees in Chicago upon questions of investment and to consult counsel with respect thereto, and for the preparation of her tax returns, etc.

From the stipulated facts the instant case appears to be no different, except possibly in the distance traveled, from those cases where taxpayer have sought to deduct expenses incurred in traveling to and from their employment or place of business, in all of which it has been uniformly held that such expenses were not deductible. ; ; .

In the case of , the Board said:

In the opinion of the Board, traveling and living expenses are deductible * * * only while the taxpayer is away from his place of business, employment, or the post or station at which he is employed, in the prosecution, conduct, and carrying on of a trade or business. 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 his living expenses while away from home. We think section 214(a)(1) intended to allow a taxpayer a deduction of traveling expenses while away from his post of duty or place of employment on duties connected with his employment.

We are of the opinion that ; ; and , relied upon by the petitioner, are clearly distinguishable upon the facts and can not be followed in the instant proceeding.

Decision will be entered for the respondent.