Board of Commissioners b. v. The flowers , 326 U.S. 465 (1946), is a Federal income tax case before the United States Supreme Court. The court stated that to reduce travel expenses under Ã, § 162 of the Internal Revenue Code, costs should be incurred when away from home, and should be a reasonable expenditure required or appropriate for the development and pursuit of trade or business. In this case, the lawyer can only reduce travel expenses from his gross income when the railroad business forces lawyers to travel and stay temporarily somewhere other than the main business of the railroad. Where the lawyer prefers for personal reasons to live in a country different from the location of his employer's headquarters, and his duty requires frequent trips to the office, the evidence obtained by the Tax Court finds that the required connection between the cost of travel and the rail business is lacking.
Video Commissioner v. Flowers
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Taxpayers stay and practice law in Jackson, Mississippi for a train. The railroad office is in Mobile, Alabama. Taxpayers were offered jobs in Mobile (185 miles from Jackson), but did not want to move from Jackson. The taxpayer arranges, by train, to remain in Jackson on the condition that he pays his own travel expenses between Mobile and Jackson and the cost of living alone in both places. The taxpayer deducts the amount incurred to travel between Jackson and Mobile as travel expenses under Ã,§162 (a) (2) of the Internal Revenue Code.
Maps Commissioner v. Flowers
Court Opinion
The court heard of whether taxpayers could reduce the costs incurred to travel between Jackson and Mobile from taxes. The Supreme Court declared that the fees could not be reduced on the grounds that those expenses had been incurred by taxpayers for their own convenience rather than for business reasons. The relevant test for deductibility is whether the journey has been motivated by "business urgency" or with consideration of personal preference. The court argued, "the facts show clearly that expenditure does not occur in the business pursuit of taxpayers, railroad companies." The Court further states that the "intended... costs arise solely as a result of the taxpayers' desire to keep the house in Jackson while working in Mobile, a factor that is irrelevant to the maintenance and prosecution of the railway law business." The Court ruled that the relevant test for deductibility is whether the journey has been motivated by "business urgency" or with consideration of personal preference.
The Relevant Statute
Today: 26 U.S.C. Ã, § 162 (a) (2): [T] raveling expenses (including amounts incurred for food and lodging other than excessive or wasteful in circumstances) while away from home to pursue trade or business.
Predecessor: (in this case :) 26 U.S.C.S. (A) (1) (a) (1) Expenditures shall be reasonable and necessary travel expenses, since the term is generally understood. This includes items such as transportation and food and lodging costs incurred while traveling. (2) Costs must be incurred when away from home. (3) Costs must be incurred to pursue business.
See also
- List of US Supreme Court cases, volume 326
- Chirelstein pp112-115
References
External links
- Working related to Internal Revenue Commissioner v. Interest on Wikisource
- Text Commissioner v. Flowers , 326 US 465 (1946) are available from: Ã, CourtListener Ã, < span> Justia Ã, OpenJurist Google Scholar
Source of the article : Wikipedia
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