Commissioner v. Flowers | ||||||
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Supreme Court of the United States |
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Argued December 11–12, 1945 Decided January 2, 1946 |
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Full case name | Commissioner of Internal Revenue v. Flowers | |||||
Court membership | ||||||
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Case opinions | ||||||
Majority | Murphy | |||||
Dissent | Rutledge | |||||
Jackson took no part in the consideration or decision of the case. |
Commissioner v. Flowers, 326 U.S. 465 (1946), was a Federal income tax case before the Supreme Court of the United States.
HELD:
Contents |
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]
May the taxpayer deduct the costs incurred to travel between Jackson and Mobile?[6]
No.
Today: 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…
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.”[7] 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.”[9] 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.[10]
See Chirelstein pp112–115[11]