Soterios and Catharine Hantzis v. Commissioner of Internal Revenue

BOWNES, Before CAMPBELL and Cir KEETON,* Judge. cuit District Judges, CAMPBELL, Judge. LEVIN H. Circuit Internal Revenue The Commissioner of (Commissioner) appeals decision of the Tax that allowed a United States Court 162(a)(2) (1976) deduction under 26 U.S.C. § a law student employment. the course of summer straightforward The facts in the case are undisputed. * Massachusetts, sitting des- the District of Of ignation. ex argued that the The Commissioner also Hantzis fall of 1973 Catharine

In the “in the of pursuit an not for ad- were incurred penses a candidate (taxpayer), formerly positions were at the Univer- business.” Both degree philosophy in a trade or vanced Court, Har- found Berkeley, entered which rejected by the Tax sity California Massachu- Cambridge, in Hantzis’ home be Law School was Mrs. vard that Boston During her setts, a full-time student. was as in New York employment cause her unsuc- sought she of law school year expenses second and that only temporary the sum- employment for to obtain cessfully em by her New were “necessitated” York firm. a Boston law She mer of with thus held the The court there. ployment however, legal as assistant did, joba find under section be deductible expenses to City, New York where a law firm in with 162(a)(2).1 weeks June beginning worked for ten she the Tax this court to reverse asking In husband, then a member Her 1975. deduction, Court’s allowance of University with a of Northeastern faculty ex- has contended that Commissioner summer, re- for teaching schedule “in the pursuit were not incurred penses couple’s in Boston and lived at mained not this accept trade business.” We do or time of the Tax Court’s there. At the home nonetheless, we sustain the argument; Mrs. Hantzis in this Mr. and decision deduction, on deny Commissioner and resided in Boston. still not in- expenses were the basis that for joint tax return their income On home.” curred “while reported earnings Mr. and Mrs. Hantzis employment taxpayer’s summer I. transpor- ($3,750) and deducted the cost and New between Boston tation Code, 26 262 of the U.S.C. Section by rented Mrs. apartment cost of small “except as other (1976), declares that § cost of her in New York Hantzis no chapter, deductions provided wise ($3,204). The in New York deduc- meals for or fam personal, living, shall be allowed under 26 tions taken U.S.C. § provides less expenses.” Section ily (1976), provides: which than creates a exception this rule 162. Trade or “§ ex category separate of deductible (a) general. shall be allowed funda This manifests a penses. category —There ordinary and neces- a deduction all per that a principle mental of taxation: during expenses paid incurred sary should include son’s taxable income year carrying taxable Note, income. producing cost of business, including— Proposal Test: A Expense The Additional Busi of Mixed Help Dilemma Solve L.J. 1974 Duke Expenses, ness and Personal (including traveling examples “[Ojne specific lodging expended amounts for meals given Congress” of a deductible cost by than are lavish or other amounts which expenses in sec income is producing travel circumstances) extravagant under Flowers, Commissioner while from home in the ” 465, 469, 250, 252, 90 L.Ed. 66 S.Ct. .... 60-16,1960-1 C.B. See Rev.Rul. the deduc disallowed Commissioner 58, 60. ground tion on the by “personal” The test which 162(a)(2) was her 262 are subject to under section tax traveling to and the cost of nec- costs of travel distinguished from those York therefore not living New is em- income generate essarily from home.” ... while “incurred attending a conven- Mrs. Hantzis in upheld disal- curred tion Mr. Mrs. Hantzis do The court the Commissioner’s Philosophical Association. the American Mr. and Mrs. of a taken lowance deduction appeal that action. in- Hantzis on 1975 return for their that, bodied in the requirement to be de would invalidate the deduction ductible under 162(a)(2), taken the taxpayer because she was a must be “incurred ... full-time student before commencing her trade or business.” In Flowers the summer work at a New York Su law firm in preme phrase Court read this to mean 1975 and continuing so was not in a trade or exigencies of business rather than business when she incurred the expenses of “[t]he the personal traveling to New living conveniences and York and necessities of there job the traveler must be while her lasted.3 The motivating Commissioner’s fac 474, proposed tors." 326 interpretation U.S. at erects S.Ct. at 254.2 Of course, threshold deductibility not every expense travel under section resulting requirement business exigencies taxpayer that a per rather than deductible; engaged be in a sonal choice trade or business before expense an incurring expense. a travel also be if “ordinary Only and that necessary” and in is satisfied would inquiry curred from home.” 26 U.S.C. into the deductibility expense of an 162(a)(2) (1976); proceed Flowe rs, 470, § 326 U.S. at to ask expense whether the was a result of S.Ct. at 252. But the latter limitations exigencies, incurred while upon draw also the basic concept that only home, and reasonable and necessary. necessitated op as posed to personal, demands may be exclud Such a reading of the statute is semanti ed from the calculation of taxable income. cally possible perhaps and would expedite disposition of certain cases.4 With Neverthe these mind, fundamentals we less, reject we it as unsupported by proceed case law to ask whether the cost of taxpay- inappropriate and to the policies er’s behind transportation to and sec from New and of her meals lodging and while in New

York, was incurred “while away from home The two cases relied on by the Commis in the pursuit of a trade or business.” sioner do appear to us to establish that traveling expenses are only deductible if

II. incurred in connection with a preexisting The Commissioner has directed his trade or business. The seminal interpreta argument at of “in 162(a)(2), tion of section Flowers v. Com a trade or business.” He interprets missioner, this 66 S.Ct. phrase requiring as that a deductible travel 90 L.Ed. is as equivocal upon point that ing expense be incurred under the demands as the statutory language it construes. of a trade or business which predates Janss, Commissioner v. 260 F.2d 99 e., expense, /. an “already existing” 1958), trade or a case with facts somewhat akin to business. Under theory, present, did not any articulate such 2. Flowers see, denied a however, deduction claimed 4. We do not how it would affect involving expenses as required by the treatment of this case. The Commissioner taxpayer’s employer’s apparently business. It is upon starting now concedes that work in established, however, taxpayer may engaged New York the in a trade or being employee. trade or business of business. If we held —as we do not —that an See, g., Commissioner, e. Primuth v. only is deductible when incurred in cases); (citing 377-78 77- already Rev.Rul. existing connection with an business, 37; 60-16, 1977-1 C.B. ruling Rev.Rul. our would seem to invalidate Thus, expenses C.B. 58. merely necessitated deduction of the cost of exigencies employee’s occupation, of an trip with- begin from Boston to New York to work regard out employer’s (about $64). to the demands of determine, We would still need to business, are also deductible. 162(a)(2), as other case under section subsequent whether the that arose taxpayer’s entry argued 3. The being has not into her a law trade or business necessary, student required by constitutes a trade or business reasonable and and so exigencies we generally do not address and issue. incurred while Reisinger (1979); from home. 71 T.C. 568 68-591, Rev.Rul. 1968-2 C.B. 73. example drawn from the Janss, An Commission college student theory. point. The Iowa, during argument illustrates the Moines, in Alaska er’s Des worked notes that “if a construction his freshman Commissioner the summer between worker, normally works in Boston for sought who sophomore of school years A, New York to work for Corp. income cost of travels to deduct from his taxable months, traveling .. . Corp. well B for six he from Alaska as transportation con while of his own trade lodging as the cost meals Accordingly, the re worker.” person from the struction Despite testimony there. be a result company quirement the construction manager nel Had a is satisfied. indicating that for which Janss worked just entering the labor worker available in Alaska and construction workers were same course his ex as a followed the largely been there market employed Janss had reasoning favor, under the Commissioner’s the Tax Court allowed exigencies the satisfy It not business Eighth The reversed. would deduction. Circuit Yet in each the tax held, Flowers, requirement.6 Janss’ to under that travel be of expenses travel would costs payer’s the by Alaska was not motivated merely and earning 260 104. an income not incidents of the business. F.2d at employer’s lifestyle. Requiring that the no on of placed emphasis The Circuit Eighth of to finding exigency necessary fact no exist business previously that Janss had deductibility 162(a)(2) under section be ing trade or business.5 prior existence of a predicated upon theory Nor would the Commissioner’s captiously or would thus re trade business section policy mesh with the behind of meaning of “in a trade strict discussed, expense 162(a)(2). As travel business.” or is intended to exclude from taxa- deduction issue, ble cost of Insofar as cases bear on necessary producing income a support of into seem In recency entry they that income. Yet the to this conclusion. LeBlanc, (5th that v. 278 F.2d 571 a trade or business does not indicate United States 1960), of su producing justice travel are not a cost a the Louisiana expenses Cir. sure, Napoleanville by costs incurred a court who resided in preme income. To be expense as a sought who leaves his usual residence deduct travel Orleans, of an New begin apartment a or business at another loca- cost in trade e., expenses, i. sat. Because Louisiana not be where court may truly home,” “away required justices to maintain expenses incurred while law both infra, much in and be practically, they see but are as their home districts functions, cost of a trade or busi- at present incurred “in court when found to been necessi occupation apartment ness” when the is new as have exigencies.7 a result by it is tated Such old. just opinion rejecting determining point The is devoted with the at what bulk task actually argument person the ployment em- in cases be said to entered could have exigencies” require- Further, position the “business his trade or business. such ment Flowers not be might actually need satisfied. imply well Hantzis Mrs. argument at 101-03. made This occupation while in her trade or still entered Boston, present in the case we consider upon arriving offices infra. New firm. York argued people It could be enter the States, F.Supp. v. 7. Accord Emmert United employees,” “being or see (S.D.Ind.1955) (Indiana supreme court upon becoming rath- available F.Supp. judge); Moss v. correct, actually upon starting er If than work. commissioner). (public (W.D.S.C.1956) service hypothetical nec- the two essarily produce situations would not it was that the law In cases where required not shown interpret- results. different So maintaining two homes the deduction ed, however, argument the Commissioner’s been denied. See Barnhill v. Commission has er, nightmare. create administrative 1945); Montgomery arose, 148 F.2d 913 every which case in the issue the Com- aff'd, (1975), presented missioner and the courts would be interpreted the ments of section proposed with the rule inconsistent in LeBlanc Commissioner. The Flowers Commissioner. the trade or previously engaged

was not III. began upon arriving which he period New Orleans. At for the of his least noted, construed already As Flowers court, therefore, first term on the the tax traveling to mean payer’s expenses New Orleans (1) is deductible reason expense only if it is already in connection ex with an (2) necessary, able and incurred while so, occupation the Commis isting home, by the exi necessitated been reasoning, sioner’s should have disall gencies business. Because the Commis In another owed.8 Kroll v. Commis suggest sioner does not that Mrs. Hantzis’ sioner, (1968), express T.C. 557 the court unnecessary, were unreasonable or eight-year- found that ly taxpayer, pass directly remaining we to the re may actor, engaged old was not in an already these, quirements. dispositive Of we find Indeed, existing trade business. before that an in coming acting, to New begin York to he while As we curred home. never engaged “had in a trade business.” think Mrs. Hantzis’ were not so might at 558. That this fact have incurred, we to be hold the deduction im dispositive been was never mentioned by proper. court, which noted that the term “home” question incurred in connection with expense provision travel from clear. far business, id., 561, ongoing an trade or at Congress expense When enacted the travel went requirement and so on to address the 162(a)(2), now deduction codified as section they have arisen while from whether, apparently was unsure to be home. deductible, an expense must be incurred In other phrase pur contexts the “in the person’s from a or away may permit suit of trade or business” the principal place his of business. See interpretation urged Note, Home, upon us the Comm A House is not a 49 Tax issioner,9 125,127-28 but to require (1963). under section ambigu Va.L.Rev. This 162(a)(2) that a expense courts, be incurred ity persists and within sometimes preexisting circuit, in connection with a trade or single have divided over the issue. business is neither necessary appropri States, nor Compare Six v. United F.2d 66 450 effectuating ate to purpose (2d 1971) (home residence) behind the Cir. held to be that phrase use of in the provision. Rosenspan States, Accord v. United 438 F.2d whether, we turn ingly, question Cir.), denied, 864, to the in (2d 905 cert. 404 92 the absence of the proposed Commissioner’s 30 L.Ed.2d 281 and Burns v. deductibility, (6th threshold limit on 1961) the ex F.2d 698 and Wal Gray, 287 Cir. Commissioner, (9th at issue satisfy require here lace 144 v. F.2d 407 Cir. (6th 1976); Lindsay isting day? 532 F.2d 1088 missioner, Cir. v. Com trade or business. A A A week? (1936). 34 Napoleanville B.T.A. 840 few on the hours train between difficulty and New Orleans? The in administer- years 8. The tax at issue in LeBlanc were 1950 ing a rule such is obvious. taxpayer began and 1951. The his tenure on the court Thus, in December 1949. 278 F.2d at 572. 162(a), general provision Under argued January it could be of that as incurred no deduction is allowed for previously engaged 1950 the in a preparing in to enter a new business and the existing trade or business. rationalization This phrase “in the business” exposes of the case the weaknesses of the cases has in concerned with such position. Commissioner’s It is not clear to us “presuppose existing been read busi- [] why prior employment pro- a month’s taxpayer] ness with which [the is connected.” prima pur- vide facie evidence of the business Commissioner, v. 20 Frank pose taxpayer’s expenses. behind the And if it See, States, g., e. Weinstein United v. did, question would further arise how much (Ct.C1.1970). 420 F.2d previous already work would constitute Commissioner, step defining 490 We think critical 1944) with v. Markey recognize is to to be in these situations (6th 1974) (home held “home” F.2d Cir. require v. home” business) Curtis place of principal (5th 1971) light be ment has to construed Commissioner, F.2d 225 Cir. Commissioner, expense 411 F.2d further Wills trav exigencies. suggested the result of (9th 1969).10 It has been Cir. obviously is eling expense are due to deduction conflicting these definitions every cases. to exclude taxation variety factual in the intended the enormous who, Bell v. 591 F.2d See business, two homes. (“We of the maintains (Ct.Cl.1979) believe that much course mitigate seeks rather “to definitions is the result problem differing Section who, because of reasons burden conceptualize attempting business, widely exigencies of his trade which are based on for decisions thereby places two of abode and situations.”); Brandi maintain varying factual ex duplicate living incur additional Kroll, (em (“Because supra, almost infinite varie at 1975) penses.” involved, Brandl, added). 513 F.2d situations ty phasis factual 699; Daly, a concrete defi 72 T.C. at 195. Con courts have not formulated capable univer sciously unconsciously, nition of the term ‘home’ courts have effec through We find this observation their in application.”) part sal this policy tuated instructive, if the cases that discuss “home” in section terpretation the term “home” in section meaning of the term particular it is held Whether basis of interpreted are resi that a is his decision unique as well as the fundamen their facts or his principal place dence expense provision, tal of the travel of a de ultimate allowance or disallowance of two com simply pinioned and not one is a function of the court’s assess duction home, definitions of much peting taxpayer’s mainte of the reason for a ment seeming and contradiction on confusion per of two If the reason is nance homes. disappears issue and a functional definition personal, taxpayer’s to be home ceived term emerges. place generally will be held to his his rather than employment location begin recognizing We that the by See, g., e. deduction will be denied. person’s for of section home 1252-55; Wills, at Markey, supra, 490 F.2d 162(a)(2) when problematic only becomes 540-41; Daly, 72 supra, 411 F.2d at supra, anoth- person place lives one and works 195-98; Commissioner, v. Lindsay at T.C. Where a works at er. resides and is 34 B.T.A. If the reason at 843-44. location, home, single always he is how- exigencies, person’s to be business felt defined; is con- ever and where to be his residence usually home will be held work, he is stantly the move due to his See, e. will be allowed. and the deduction (In latter “away” never from home. F.2d Frederick 603 g., v. United situation, said either that he has may be Hartsell, Wright v. 305 (8th 1979); from, 1292 Cir. else that away no residence to be 1962); (9th 221 v. Com Harvey Cir. of em- always place his residence is at his 1960); missioner, (9th Le 60-16, 283 F.2d 491 Cir. C.B. ployment. See Rev.Rul. 1960-1 Blanc, We 278 F.2d 571. understand 62.) However, present in the an is before concern the concurrence that such plainly need to determine “home” the term us, operational interpretation since the resided in Boston worked, perhaps in New York. is somewhat technical and briefly, albeit “home” missioner, aff'd, (1975), has, excep 64 175 532 F.2d T.C. 10. The Tax with a notable Court Commissioner, tion, 1976); consistently Blatnick v. held that a home 1088 Cir. course, exception, Daly 1344 The his of business. Commis sioner, (1979); present is the case. Foote v. Commis T.C. v, sioner, (1976); Montgomery Com untidy, always lawyer it will afford had been a based that Boston with a answers, bright line but we doubt abili- New York client whom was temporarily she ty of serving. either the Commissioner or courts was kept up home in Boston unyielding Hantzis, to invent formula that will for involving reasons Mr. but those all make sense in cases. The line between reasons cannot for a showing by substitute personal expenses business winds Mrs. Hantzis that of her through infinite factual permutations; required ef- her to maintain provision fectuation the travel expense Mrs. keep two homes.11 Hantzis’ decision to requires any principle of decision be two homes must be a choice seen as dictated flexible to statutory policy. reasonable, and sensitive by personal, wholly albeit con and not a or occupa siderations Construing just manner described necessity. tional We therefore hold the requirement that an be in her home for purposes of home,” curred “while from we do not expenses was New York and requirement believe this was satisfied in issue in this case incurred were not this case. Mrs. Hantzis’ trade or business home.”12 did not require that she maintain a home in Boston as well as one in New York. are We not dissuaded this conclu Though she returned to Boston at various by sion of Mrs. nature Hant times during period employment her zis’ in New York. Mrs. Hant in New person her visits brevity were all for zis argues stay al reasons. It is not contended that she had New excepts York her from the business a business connection in exigencies requirement Boston that neces there; keeping sitated her pro no under doctrine supposedly enunciated fessional interest was Supreme served mainte Peurifoy Court in v. Commis nance of the Boston sioner, home —as would have L.Ed.2d been the for example, if Mrs. Hantzis (per curiam).13 The Tax Court respect, ordinary meaning 11. In this Mr. and situa from “the (Keeton, Mrs. Hantzis’ term.” analogous involving spouses J., However, tion is concurring). cases of the two with careers in different Each approaches, locations. we find that the concurrence independently satisfy problematic adopted that de more than that here. ductions the for taken of a trade or business arise while he Peurifoy, 13. In stated the Court that the Tax or she home. See Chwalow “engrafted exception” had Court requirement onto the (3d 470 F.2d that travel be dictated 1972)(“Where additional are incurred exigencies, allowing “a deduction for ' because, reasons, husband expenditures taxpayer’s employ . .. when the separate domiciles, wife maintain is no deduction ‘temporary’ ment is as contrasted with ‘indefi Commissioner, allowed.”); ” Hammond v. 59, nite’ ‘indeterminate.’ 358 U.S. at 43, (5th 1954); F.2d Cir. Foote v. Commis Coerver v. Commis at 104. Because the Commissioner did sioner, (1976); 67 36 T.C. challenge exception, this the Court did not sioner, (1961). This is true even validity. upheld its rule on cuit court’s reversal of It instead the cir though spouses joint file a return. Chwal Tax Court and disal ow, supra, 470 F.2d at 478. lowance of the deduction on the basis of the adequacy appellate of the court’s review. 12. The concurrence reaches the result on same agreed Supreme Court Tax Court’s essentially reasoning, the same but under what finding temporary taxpay as to the nature of interpretation pur- we take to be “in clearly employment was er’s erroneous. Id. at requirement. suit of business” We differ from 60-61, 79 S.Ct. at 105. seem, colleague, only ques- our it would precondition deductibility Despite inauspicious beginning, excep tion of which to best its “ statutory generally accepted. accommodates taxpayer who, concern for ‘the tion has come to be uncertainty lingers, Some however, exigencies because of his over whether the places properly exception gencies” applies maintain two to “business exi thereby dupli- “away require abode and cate incur additional or the home” ” Brandl, living expenses.’ Compare supra. See Neither ment. and Blatnick v. 513 F.2d at 699 Commissioner, phrase “away from home” “in nor Frederick, of business” effectuates without with 603 F.2d this concern fact, interpretation probably degree In it relevant that to some it is to both. removes has no business connection taxpayer’s taxpayer held that Boston was here unreason- If no have been of residence. place home because it would with his usual New for her to move her residence able dictates the location exigency glance At first only York for ten weeks. residence, then the taxpayer’s usual support to find may seem these contentions employ taking temporary of his mere fact that, when a holding in the court decisions compelling a supply elsewhere cannot ment a limited time taxpayer works for continuing to maintain reason for 162(a)(2) home, section al- from his usual who lives Only taxpayer that residence. main- expense for the lows a deduction another and has business place, one works em- long home so as the taining a second ambiguous situation ties to both is not “indefi- “temporary” is ployment is employment doctrine temporary Frederick, See, g., e. “permanent.” nite” or circumstances, to resolve. such designed 1294; Six, supra, 450 F.2d at supra, 603 from his usual his employment unless 69; F.2d at Wright, supra, 304 F.2d at reasonably a court can temporary, home is 224-25; Coburn taxpayer has abandoned assume that (2d 1943). test is an 764-65 This Cir. and is left his business ties to that location under sec- requirements elaboration maintaining for only personal reasons with be incurred expense that an only personal there. Where a residence while to business due in that a travel be require needs it supra. note Thus from home. See curred, however, taxpayer’s home is said, has been expense subject so as to leave the defined expects to taxpayer reasonably “Where a Thus, supra. taxpayer taxation. See a substan- in a location for employed pursues temporary employment away who time, rea- period tial or indefinite residence, but from the location his usual that his choice of a sonable inference is with that loca has no business connection decision, unrelated residence is a tion, purposes for “away is not home” Thus, necessity. Cockrell Com how he travels to work. irrelevant far 1963); missioner, 321 F.2d however, is that expectation, The normal Commissioner, 55 T.C. 786-88 Tucker v. will choose to live near his Consequently, place employment. expects when a reasonable [sic] nature reasoning, temporary this On only employed to be in a location in New York of Mrs. Hantzis’ of time and temporary period short or case. does not affect the outcome of her to the lo- travels a considerable distance had no business ties to Boston She residence, his it is unreason- cation from within the em- bring his choice of a resi- able to assume that By holding, we do ployment doctrine. convenience. by personal dence is dictated “home” in section adopt a rule that inference is that he The reasonable equivalent is the travels because making these temporarily Nor do we mean to of business. necessity.” of a business a “home” for tax that a has imply Frederick, (cita- supra, 603 F.2d at in a only already engaged if he is omitted). tions particular at a location. trade or business alluringly determi- both rules are Though doctrine temporary employment The nate, why they discussed already we have not, however, any eliminate purport does to pur- of the inadequate expressions offer maintenance of that continued the travel deduction. poses behind justification. a first home have a business Mrs. in merely hold that for a application has no where We We think the rule applied n.1; Note, necessary question: Six, to supra, to address this supra, at 69 See 450 F.2d employment requirement, temporary either 49 Va.L.Rev. at 136-45. meaning requirements of both. affects the these as inex- doctrine Because we treat intertwined, tricably see we find it un- 256 working in New she had attended “away

Hantzis’ to circumstances business,” Boston, home in the of a trade or school near her in and she home of she must the existence some establish to do she finished her continued so after addition, sort of both the location job. business relation to her summer husband lived she Thus, claims as “home” and to the location of on and worked in Boston. the facts her sufficient case, agreement in I am in with support finding that duplicative a her deductions must taxpayer’s court exigen- are necessitated she was not required be disallowed because This, believe, meaning cies. we is the of to maintain by her trade or business both the statement in Flowers that “[b]usiness of rather places residence. However than trips are to be identified in relation to busi- resting interpretation its on an conclusion ness demands and traveler’s business as language taken headquarters.” 474, 326 U.S. at 66 S.Ct. at whole, which allows deduction for ordi- added). 254 (emphasis On the uncontested nary necessary us, facts before Mrs. Hantzis no busi- had of Boston; ness relation to we therefore leave business,” court reaches to cases in squarely which issue is result incorporating concept same presented the of elaborating task what rela- business-related residence into the defini- required tion to a under section “home,” thereby producing tion some- living expenses duplicative times, meaning but not always, a “home” be deductible. ordinary different quite usage.

Reversed. Supreme noted “[t)he Court has meaning of prede- the word ‘home’ [the KEETON, Judge, concurring District 162(a)(2)] cessor with reference to § the result. working taxpayer residing city in one with Although agree engendered difficulty I the result reached in another has much Flowers, in the opinion, litigation.” court’s and with of its much Commissioner v. 465, underlying 471, 250,253,90 I write analysis, separately be- 326 U.S. 66 L.Ed. S.Ct. (1946). cause I join rejected cannot the court’s determina- 203 The Court has twice opportunities that New York was the to adopt definitive construc- Flowers, home for of 26 U.S.C. tions term. 326 U.S. § 472, In so court holding, adopts a definition at 66 v. S.Ct. at 253. Commissioner 292, 1065, 287, “home” differs from ordinary Stidger, 386 87 U.S. S.Ct. 1068, unduly (1967). the term therefore 17 L.Ed.2d See also Peuri- 59, risks causing misinterpreta- confusion and foy v. 358 U.S. 79 S.Ct. 104, tion of important principle (1958). Moreover, articulated L.Ed.2d as the opinion present this case. points court’s case out, the courts of have appeals split In adopting 162(a)(2), Congress his) a taxpayer’s (or whether “home” is her sought mitigate “to the burden the tax principal principal place residence who, payer of the exigencies because of his p. ante. business. See cases cited places maintain two of abode and thereby incur additional and The court conflict among enters this cir- duplicate expenses.” v. living Kroll Com cuits with “functional” definition of home missioner, Ro adopted See other I yet circuit. States, senspan opinion United 438 F.2d indicating read the that in a dual (2d Cir.), denied, cert. the Commissioner must de- 54, 30 (1971); L.Ed.2d 108 James termine whether the of the tax- 1962). payer’s require trade or business In the present the taxpayer pp. does not both 253- maintain residences. contend that so, she maintained her residence Commissioner must 255 ante. If the in Boston for business reasons. Before that the taxpayer’s principal decide resi- Eng- Cf. United v. New that Id. States conclude is her “home” and must dence resi- secondary Co., with expenses associated the land Coal and Coke away (“Unless contrary ap- incurred “while (1st 1963) dence were the not, the as in home,” and are deductible. If statutory words pears, presumed it is that must find the Commissioner instant sense”). ordinary used in their were busi- place of taxpayer’s principa] that the cases, dual residence the analyzing that “home” and must conclude ness is her opinion compelling advances reasons court’s not incurred expenses question the step be to determine the first that conclusory “while home.” op- as taxpayer has business whether the which of these as to nature determinations purely personal reasons main- posed to poten- her “home” the residence is reveals must be both residences. This done taining confusing adopting effect of an extra- tially expenses the to determine whether in order definition “home.” ordinary were, maintaining a residence second mean, in a can A word used statute business, opposed as to by “necessitated cognoscenti, whatever authorita- among the demands,” personal, ante, p. 250 and were to Neverthe- define it mean. tive sources taxpayer by in this sense incurred less, body disadvantage is a distinct it pursuit of trade only by it can be law that understood Necessarily implicit or business.” terminology. expert who are in its those corollary a more limited that proposition Moreover, risks needless of misunderstand- present to case: is sufficient decide arise, only among ing and confusion not taxpayer relation- When the has a business among pro- public members of the but also location, traveling only to one no ship apply who must a interpret fessionals are “necessitat- incurs work, when a day-to-day statute in their opposed personal ed as to de- given extraordinary word is mands,” many regardless of how residences contrary usage. to everyday that its located, has, are they where easily reached court can The result is “home.” which one while also “home” its expressed giving taxpay present although In the meaning, Congress nor ordinary neither required her argues er that her Court directed that Supreme has in New contention is to reside extraordinary meaning given “home” be compel a determination that insufficient Flowers, supra, context. present nature of her trade or business it was the In Ro- supra. Stidger, Peurifoy, the additional required her to incur Judge senspan v. United residence, second expense maintaining court, writing rejected for the Friendly, 162(a)(2) was in burden that section of home proposed Commissioner’s definition mitigate. Her associat tended as headquarters, “ maintaining York resi with her New ed concluding that in section ‘home’ ” arose from interests led dence ‘home.’ Id. at means maintain two rather than her to residences Congress uses non-technical word When single residence close to her work.1 While statute, wants presumably in a tax traveling principal from her and courts to read it in the administrators second residence closer to busi under- ordinary way people home,” ness, though “away from she even stand, “to unex- and not draw on some “away was not from home pressed spirit outside the bounds of Thus, at issue in business.” meaning of Addison v. normal words.” Inc., this case were Prods., Hill Fruit 322 U.S. Holly from home in L.Ed. 1488 “while or business.” court, Congress mitigating the bur- explained by pp. to which 1. For reasons 254- enacting 256, ante, duplicative when sec- den of nature of her em- bring ployment case within those does which a tax- contrasting In the case in both residences has established that

payer BANK et ROSLINDALE COOPERATIVE reasons, sec- al., Plaintiffs, were maintained for business Appellants, 162(a)(2) allows the deduction of to, with travel and main- penses associated al., et Carol S. GREENWALD of, if are they tenance one residences Defendants, Appellees. incurred for business reasons and that No. 80-1280. is not the home. A com- abode well meaning mon sense of “home” works Appeals, States Court provision. of this purpose to achieve First Circuit. the court announces a sound summary, Argued Oct. cases, that, principle in dual residence de- Decided Jan. 1981.* ductibility traveling expenses depends upon showing that both residences were If that

maintained for business reasons.

principle is understood to be derived from language taken as a

whole, signifi- operative “home” retains determining

cance for which of the busi-

ness-related residences is the one the ex-

pense of which can be treated as deductible. context, given

In this “home” should be its only to allow a deduction

ordinary expenses relating to an abode that is not taxpayer’s principal place of residence. the undisputed

On facts in this

Tax Court found that Boston was the tax- sense, e.,

payer’s everyday “home” in the i.

her principal place of residence. Were the disposition

issue relevant I uphold quite the Tax Court’s reason-

able determination on the evidence before However,

it. because the had no maintaining

business reason for both resi-

dences, her deduction for associat- maintaining

ed with a second residence clos- principal

er than her residence to her must be disallowed without

regard to which of her two residences was

her “home” under section

* Previously unpublished released in form and judgment entered on November

Case Details

Case Name: Soterios and Catharine Hantzis v. Commissioner of Internal Revenue

Court Name: Court of Appeals for the First Circuit

Date Published: Jan 28, 1981

Citation: 638 F.2d 248

Docket Number: 80-1140

Court Abbreviation: 1st Cir.