Commissioner v. Flowers
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| Commissioner v. Flowers | ||||||||||
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| Argued Dec. 11, 12,, 1945 Decided Jan. 2, 1946 |
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| Majority by: Murphy Dissent by: Rutledge Jackson took no part in the consideration or decision of the case. |
In Commissioner v. Flowers, the Supreme Court of the United States held that the word “home” in 26 U.S.C.S. § 23(a)(1)(A) (the predecessor to 26 U.S.C. §162(a)(2)) must be understood to refer to the taxpayer’s place of business rather than the location of his family residence.
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[edit] Facts
The taxpayer lived and practiced law in Jackson, Mississippi for a railroad.1 The railroad’s home offices were in Mobile, Alabama.2 The taxpayer was offered a job in Mobile (185 miles from Jackson), but was unwilling to move from Jackson.3 The taxpayer arranged, with the railroad, to stay in Jackson on the condition that he pay his own traveling expenses between Mobile and Jackson and his own living expenses in both places.4 The taxpayer deducted the amounts incurred to travel between Jackson and Mobile as traveling expenses under §162(a)(2) of the Internal Revenue Code.5
[edit] Issue
May the taxpayer deduct the costs incurred to travel between Jackson and Mobile?6
[edit] Holding
No.
[edit] Relevant Statutes
26 U.S.C.S. § 23(a)(1)(A) (predecessor to 26 U.S.C. §162(a)(2)): (1) The expense must be a reasonable and necessary traveling expense, as that term is generally understood. This includes such items as transportation fares and food and lodging expenses incurred while traveling. (2) The expense must be incurred while away from home. (3) The expense must be incurred in pursuit of business.
26 U.S.C. § 162(a)(2): [T]raveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home on the pursuit of a trade or business…
[edit] Court's Reasoning
The Supreme Court held that the expenses could not be deducted on the ground that the expenses in question had been incurred by the taxpayer for his own convenience rather than for business reasons.7 The relevant test for deductibility was whether the travel had been motivated by “exigencies of business” or by considerations of personal preference.8 The court opined, “[t]he facts demonstrate clearly that the expenses were not incurred in the pursuit of the business of the taxpayer's employer, the railroad.”9 The court further held that the expenses in question “…were incurred solely as a the result of the taxpayer’s desire to maintain a home in Jackson whole working in Mobile, a factor irrelevant to the maintenance and prosecution of the railroad’s legal business.”10 The court determined that the relevant test for deductibility was whether the travel had been motivated by “exigencies of business” or by considerations of personal preference.11
[edit] See also
[edit] Footnotes
1. 326 U.S. 465 (1946). 2. Id. 3. Id. 4. Id. 5. Id. at 469. 6. Donaldson, Samuel A., Federal Income Taxation of Individuals: Cases, Problems and Materials 668 (2d ed. 2007). 7. Id. at 473. 8. Id. at 474. 9. Id. at 473. 10. Id. 11. Id.
