# Gustafson v. Commissioner > United States Tax Court · June 13, 1944 · 3 T.C. 998 URL: https://www.frixlaw.com/law-library/cases/4478178 ## Case - **Full name:** Charles G. Gustafson v. Commissioner of Internal Revenue - **Court:** United States Tax Court - **Decided:** June 13, 1944 - **Citations:** 3 T.C. 998; 1944 U.S. Tax Ct. LEXIS 104 - **Precedential status:** Published - **Opinion:** Dissent by Harron - **Judges:** Sternhagen, Harron - **Cited by:** 27 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4478178 ## Opinion text Harron, J., dissenting: Petitioner, on his return, described, his occupation as “traveling salesman.” He is a salesman for the Dry Goods Journal, which maintains its office at Des Moines. Petitioner is paid commissions and is given a drawing account. His income from his services to the Journal in 1940 was $5,675. From that amount of gross income, petitioner deducted on his return $4,368 for “traveling expenses.” Petitioner’s married sister lives in Greenville, Iowa, which is about 300 miles from Des Moines. His sister and brother-in-law maintain a large home there. They are prosperous. They give petitioner a room in their home. He does not pay them any rent for the room. He keeps his personal property in the room. During 1940 petitioner made only two trips to Greenville over week ends. Under section 23 (a) (1) of the Internal Revenue Code, a taxpayer is entitled to deduct “traveling expenses,” including the entire amount expended for meals and lodging, while away from “home” in the pursuit of a trade or business. The term “home” as that word is used in section 23 (a) (1) has been construed to mean the principal place of business or place of employment of the taxpayer. See 'Walter M. Priddy, 43 B. T. A. 18, 31. It is a question of fact, in this case, whether petitioner’s “home,” or place of employment, or principal place of business was Des Moines, the office of the Journal. It is immaterial to the issue presented under section 23 (a) (1) that petitioner was given a room in his sister’s home in Greenville. It is a fact that petitioner did not maintain a residence in any one place for which he paid rent and other expenses. He lived in his trunks, going from town to town, and living in hotels and on trains. But, also, it is a fact that petitioner carried on his business in the same way. His business was that of a traveling salesman, all of the year. Perhaps his place of business was in all of the cities where his clients were. The record does not disclose much about how petitioner carried on his business or what his business was. The record is bare of facts on such matters. The only indication that petitioner returned to Des Moines, the “home office” of the Journal during the year, is the testimony that petitioner made two trips to Greenville during the year over week ends. Perhaps on those two occasions he went to Des Moines, also. There is no evidence on the point. Under the circumstances, petitioner has failed to prove that his place of business or “home” was Des Moines, for purposes of the statutory provision. It follows that the expenditures in question were not “traveling expenses * * * while away from home in the pursuit of a trade or business.” Unless the expenditures came within the class of “traveling expenses” described in section 23 (a) (1), they are not deductible as “traveling expenses.” Under section 23 (a) (1), a taxpayer is entitled to deduct all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business. It may be that petitioner, under a proper understanding of the law, could have proved that his business was such that railroad and pullman expenses and charges for baggage, tips, telephone, telegraph, and entertaining clients, and other items were ordinary and necessary business expenses. Respondent allowed deduction of $1,846 for certain expenses. He did not state his reason for allowing the deduction. Respondent disallowed deduction of $2,522, expenditures for lodging, food, and laundry services, on the ground that they were personal living expenses, and therefore, were not deductible. Sec. 24 (a) (1). That determination was correct in my opinion. The evidence presented, although limited, indicates that petitioner’s business was not located in Des Moines, but was located in the cities where he got business. If the contrary is true, petitioner should have established the point by evidence. The difficulty in this case lies in the failure to correctly frame the issue. That leads to a seeming paradox, to which the majority view refers. But, I do not think the paradox which has been suggested in the majority view exists. Petitioner, in-my opinion, has grounds for claiming deduction for his ordinary and necessary business expenses in the conduct of the business of a traveling salesman, and for nothing else. A traveling salesman, like any other taxpayer, has personal expenses. Petitioner’s problem is to prove what his business expenses were as separated from his personal expenses. This he has failed to do. It does not seem reasonable to me that all of the expenditures for the entire year for lodging, meals, and upkeep of clothes were business expenses or traveling expenses. The total sum of $2,522 appears to represent the total amount spent for lodging, meals, and upkeep during the entire year. If the facts were presented properly, it would be possible to allocate some of such expenses to the conduct of petitioner’s business. But this has not been done. Petitioner has not shown clearly what his business- is, or where it is conducted, or what are the various items of his expenses in conducting his business, including the expenses of traveling from city to city. It appears that petitioner’s business is in many cities, and that while he resides in such cities some of his expenses are personal. Petitioner testified that he did not keep any record of his expenses, and that the total sum in question was only a conservative estimate. In short, petitioner has failed to understand that nature of the burden of proof which was upon him in this case. He has failed to meet his burden of proof. Respectfully dissenting, I believe the holding should be made in this case that petitioner has failed to overcome the prima facie correctness of respondent’s determination. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4478178. Public record. Not legal advice.