Baker v. Commissioner

Tannenwald, J., concurring: Ostensibly there was a nexus between the courses petitioner took and the type of work involved herein. And concededly, petitioner’s purpose, in terms of his subjective intent, was to “improve his skills” in the work he was doing. But the fact is that at all times, prior to and during the taxable year involved, petitioner was primarily a student and not a worker. He had spent, and continued to spend through and beyond 1964, the great bulk of his time studying, working only spasmodically during weekends and vacations. Under these circumstances, and taking into account petitioner’s youth and the fact that a family business was involved, petitioner’s work pattern provides a far too tenuous foundation to justify the conclusion that his expenditures were “ordinary and necessary” under section 162 and therefore not personal under section 262.

Ñor does the fact that petitioner was employed full time from March to September 1964 militate against this conclusion. Such employment was but a temporary stopgap to fill a hiatus in his career as a student. To say that this employment established a working career sufficient to support a finding that he took a sabbatical to go to law school to “improve his skills” in furtherance of such a career is to indulge in sheer fantasy. The most that can be said is that petitioner’s legal education was undertaken to prepare him for a future career in the business world. It is well established that the expenses of such preparation are not deductible. See, e.g., Nathaniel A. Denman, 48 T.C. 439, 445 (1967).

Petitioner’s purpose may indeed have been to improve his skills, but they were the skills employed in part-time work, wholly incidental to his role as a student and not related to any role as an established worker collaterally seeking to improve his capacity concurrently or successively to carry on his employment. Thus, I would deny the deduction herein on the basis that, irrespective of nexus or his avowed purpose, petitioner simply liad not achieved a work status sufficient to bring those elements of the “improvement of skills” test into play. Under this rationale, there is no need to cope with the difficulties inherent in determining the proper standards against which those elements are to be measured, and particularly the troublesome problem of substituting our collective judgment for that of the trier of the facts with respect to a taxpayer’s subjective intent. Cf. James A. Carroll, 51 T.C. 213 (1968); Ramon M. Greenberg, 45 T.C. 480 (1966) (especially the dissenting opinions therein), revd. 367 F. 2d 663 (C.A. 1, 1966).

I also note that there is a serious question as to whether the expenses involved herein would in any event be deductible. Those expenses are limited to the cost of meals and lodging in Denver as a reduction of “gross income” under section 62. 1 That section permits reduction for “expenses of travel, meals, and lodging while away from Home.” (Emphasis added.) As the findings of fact show, petitioner maintained an apartment in Denver. He lived there during the week while he attended classes, returning to Colorado Springs only on weekends. It seems to me that even if petitioner is considered to have been engaged in two businesses and therefore to have had two “homes” for tax purposes, one in Denver while he was going to law school and one in Colorado Springs while he worked on weekends and during vacations, it can be argued that his principal “home” was Denver. E.g., Commissioner v. Stidger, 386 U.S. 287 (1967); Commissioner v. Flowers, 326 U.S. 465 (1946); Nathaniel A. Denman, supra.

FeatheRSton and Ikwin, JJ., agree with this concurring opinion. Petitioner took the standard deduction under sec. 141 and conceded that this precluded his claimed itemized deductions for automobile expense, tuition, and books and supplies under sec. 162,