“To conclude that lodging is on the business premises of the employer merely because it is owned by the employer would make the [business premises] condition of section 119 meaningless. The property must bear an integral relationship to the business activities of the employer.”
How later courts described this case
- “To conclude that lodging is on the business premises of the employer merely because it is owned by the employer would make the [business premises] condition of section 119 meaningless. The property must bear an integral relationship to the business activities of the employer.”
Written by the judges who cited it.
The opinion
Scott, J., concurring: I agree with the conclusion of the majority that the lodging furnished petitioner in this case was not on “the business premises” of his employer, the Canal Zone Government. In my view, the majority opinion is correct because petitioner’s living quarters did not constitute an integral part of the business premises of the Canal Zone Government and were not premises on which the Canal Zone Government carried on any of its business activities. However, I do not agree with the conclusion of the majority that the performance by an employee of a significant portion of his duties in his residence would cause that residence to be “on the business premises” of his employer within the meaning of section 119, I.R.C. 1954, where the property was not otherwise an integral part of the business property of the employer. It might be that use by an employee of his residence for his business activities as an employee would entitle him to a deduction of a part or all of the rental paid for the premises under other sections of the Code. See Newi v. Commissioner, 432 F.2d 998 (2d Cir. 1970), affg. a Memorandum Opinion of this Court. However, in my view, even if an employee did a large portion of his work as an employee in his residence, this fact standing alone would not entitle the employee to an exclusion under section 119,1.R.C. 1954.
Raum and Sterrett, JJ., agree with this concurring opinion.