Peurifoy v. Commissioner of Internal Revenue/Opinion of the Court

The petitioners were employed as construction workers at a site in Kinston, North Carolina, for continuous periods of 20 1/2 months, 12 1/2 months, and 8 1/2 months, respectively, ending in the year 1953. Each of the petitioners maintained a permanent residence elsewhere in North Carolina. In reporting his adjusted gross income for 1953 each petitioner deducted amounts expended for board and lodging at Kinston during the period of employment there, and for transportation from Kinston to his permanent residence upon leaving that employment. These deductions were disallowed by the respondent. Ensuing Tax Court proceedings resulted in a decision in favor of the petitioners. 27 T.C. 149. The Court of Appeals reversed. 254 F.2d 483. We granted certiorari 356 U.S. 956, 78 S.Ct. 996, 2 L.Ed.2d 1065, to consider certain questions as to the application of § 23(a)(1)(A) of the Internal Revenue Code of 1939 raised by the course of decisions in the lower courts since our decision in Commissioner of Internal Revenue v. Flowers, 326 U.S. 465, 66 S.Ct. 250, 90 L.Ed. 203. However, as the case has been presented to us we have found it inappropriate to consider such questions.

The issue is whether the amounts in question constituted allowable deductions under § 23(a)(1)(A). Generally, a taxpayer is entitled to deduct unreimbursed travel expenses under this subsection only when they are required by 'the exigencies of business.' Commissioner of Internal Revenue v. Flowers, supra (326 U.S. 465, 66 S.Ct. 254). Application of this general rule would require affirmance of the judgment of the Court of Appeals in the present case.

To this rule, however, the Tax Court has engrafted an exception which allows a deduction for expenditures of the type made in this case when the taxpayer's employment is 'temporary' as contrasted with 'indefinite' or 'indeterminate.' Compare Schurer v. Commissioner, 3 T.C. 544; Leach v. Commissioner, 12 T.C. 20; Albert v. Commissioner, 13 T.C. 129, with Warren v. Commissioner, 13 T.C. 205; Whitaker v. Commissioner, 24 T.C. 750. The respondent does not in the present case challenge the validity of this exception to the general rule.

Resolution of this case as presented to us turns, therefore, upon a narrow question of fact-Was the petitioners' employment 'temporary' or 'indefinite'? The Tax Court, stating that 'each case must be decided upon the basis of its own facts and circumstances,' 27 T.C. at page 157, found that their employment was temporary. The Court of Appeals, also recognizing that the question was 'one of fact,' held that on the record the Tax Court's finding of temporary employment was 'clearly erroneous.' 254 F.2d at page 487.

In reviewing the Tax Court's factual determination, the Court of Appeals has made a fair assessment of the record. 26 U.S.C. (Supp. V) § 7482, 26 U.S.C.A. § 7482; Rule 52(a), Fed.Rules Civ.Proc., 28 U.S.C.A.; cf. Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456. That being so, this Court will not intervene. Federal Trade Commission v. Standard Oil Co., 355 U.S. 396, 400-401, 78 S.Ct. 369, 371-372, 2 L.Ed.2d 359; National Labor Relations Board v. Pittsburgh S.S.C.o., 340 U.S. 498, 502-503, 71 S.Ct. 453, 455-456, 95 L.Ed. 479.

Affirmed.

Mr. Justice DOUGLAS, with whom Mr. Justice BLACK and Mr. Justice WHITTAKER concur, dissenting.