Opinion
Docket No. 25546.
1950-09-29
BEATRICE H. ALBERT, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
Louis Albert, Esq., for the petitioner. James R. McGowan, Esq., for the respondent.
Petitioner, in the taxable year 1945, was an employee of the Chemical Warfare Service of the War Department with her regular post of duty in Lowell, Massachusetts. She resided in Gloucester, Massachusetts, with her husband and minor son. During the year she incurred certain expenses for room rent and meals while serving at her post of duty and incurred certain travel expenses in traveling between her home in Gloucester to her post of duty in Lowell. In Beatrice H. Albert, 13 T.C. 129, we held on facts the same as here that similar expenses for the year 1944 were not deductible. Held, the case of Beatrice H. Albert, supra, is res judicata in the present proceeding. Held, further, that even if it be assumed that the first proceeding is not res judicata, nevertheless, such expenditures are not deductible under the rule of stare decisis for the same reasons stated in Beatrice H. Albert, supra. Louis Albert, Esq., for the petitioner. James R. McGowan, Esq., for the respondent.
The Commissioner has determined a deficiency in petitioner's income tax for the year 1945 of $306.78. The deficiency results from the disallowance by the Commissioner of $841.56 claimed by petitioner on her income tax return for traveling and living expenses while away from home and $7 claimed by petitioner as a deduction for cigarette tax.
Petitioner in her assignments of error contests the first adjustment of the Commissioner to the extent of $796.56 and concedes that $45 which she claimed as deductions for traveling and living expenses was properly disallowed by the Commissioner. She does not contest the correctness of the Commissioner's disallowance of $7 cigarette tax.
Respondent denies that he erred as alleged by petitioner and also pleads affirmatively that our decision in Beatrice H. Albert, 13 T.C. 129, is res judicata because the issued decided in that proceeding is precisely the same as is involved here, except as to the taxable year, and that the material facts in both cases are the same.
FINDINGS OF FACT.
Most of the facts in this proceeding are stipulated and are adopted as stipulated and they are incorporated herein by reference.
The petitioner is a married woman who resides with her husband and minor son in the city of Gloucester, Massachusetts. The return for the period here involved was filed with the collector of internal revenue for the district of Massachusetts.
In the calendar year 1945, the petitioner was employed by the Chemical Warfare Service of the War Department and was hired to work for the duration of the war and for 6 months thereafter. She was married and had a son then 10 years old. In the taxable year the petitioner resided with her husband and son in a home maintained by the husband in the city of Gloucester, Massachusetts. The husband was a lawyer and supported the family as economic head of the household. At petitioner's request the War Department, in a letter dated August 9, 1948, furnished petitioner with the following information concerning her civilian service with the Chemical Warfare Service, War Department:
An examination of your personnel folder reveals the following personnel actions:
War Service Indefinite Appointment, 12 August 1942, Junior Inspector, SP-3, $1,440 per annum, Chemical Warfare Service at Large, Boston, Massachusetts;
Promotion, 16 November 1942, Assistant Inspector, SP-4, $1,620 per annum;
Promotion, 16 July 1943, Inspector, SP-5, $1,800 per annum;
Promotion, 1 April 1944, Administrative Inspector, CAF-5, $2,000 per annum;
Promotion, 1 July 1944, Administrative Inspector, CAF-6, $2,300 per annum;
Periodic Pay Increase, 1 July 1945, $2,670 per annum;
Separation (reduction in force), 31 December 1945.
Records show that you were appointed for training at the Boston Chemical Warfare Training School, Fall River, Massachusetts, and later for duty anywhere in New England. WD Form 43, Individual Earnings Record, indicates that your duty station during 1943, 1944, and 1945 was the Hub Hosiery Mills, Lowell, Massachusetts.
Petitioner's duty station, beginning October 1943 and until the end of 1945, was the Hub Hosiery Mills, Lowell, Massachusetts. She had formerly been at West Hanover National Fireworks in West Hanover, Massachusetts. The transfer from there to Hub Hosiery Mills, Lowell, Massachusetts, was made by a telephone call, pursuant to which she went to Boston and then to Lowell. A written order for the transfer was furnished by the employer to the petitioner. The petitioner's railway fare for this transfer was paid by the Government and she was also given a per diem allowance to cover the transfer.
The Hub Hosiery Mills was manufacturing gas masks, and the petitioner's duties at its plant during the taxable year were to see that all of the terms of the contracts under which the gas masks were being manufactured were followed and that all equipment and material necessary was on hand to keep the plant in constant production. She had as many as eight employees working under her. The petitioner had to be on duty at 7 o'clock in the morning for 6 days of the week.
The petitioner for 21 weeks during the taxable year had a room at the Y.W.C.A. in Lowell at a total cost of $87.30. She had meals in Lowell on 122 days during that year at a total cost of $366. She expended during that year $64.26 in train fares between Gloucester and Lowell when she went to Gloucester over week ends to be with her husband and son. She drove her car back and forth daily between Gloucester and Lowell during 31 weeks of that year at a total cost of $279. The total of the above is $796.56.
The distance by road between Boston and Lowell is about 47 miles. Neither is a suburb of the other nor of any other city. The only train service between Gloucester and Lowell is by way of Boston, and the schedule is such that it would have been impossible for the petitioner to have commuted daily between Gloucester and Lowell. The petitioner was able to commute daily by the use of her automobile only during the summer months when the days were longer and the weather better than in winter.
The head of personnel in the Boston Office of the Chemical Warfare Procurement District of Boston warned the petitioner that she might be transferred upon short notice and advised her not to make leases or other commitments which would inconvenience her transfer from one station to another.
In paragraph numbered 10 of the stipulation it is provided that:
10. The Court may take judicial notice of the entire record in the prior proceeding entitled Beatrice H. Albert v. Commissioner of Internal Revenue, Docket No. 19152, 13 T.C. 16, in which the Court entered its decision on August 1, 1949, as if such record had been introduced and received in this proceeding.
From the foregoing facts we make the following ultimate findings of fact:
The material facts of petitioner's claim to travel deductions for 1945 as disclosed by this record are the same as the material facts of petitioner's claim to travel deductions for 1944 as disclosed by the record in Beatrice H. Albert, supra.
Petitioner's expenses in traveling between Gloucester, where she resided, and Lowell, where she worked, were commuting expenses.
Petitioner's expenses while staying at Lowell were personal living expenses while at her only post of duty.
OPINION.
BLACK, Judge:
The questions which we have to decide in this proceeding may be stated as follows:
1. Does the doctrine of ‘collateral estoppel‘ apply to petitioner's claim to a deduction for the calendar year 1945 for room and meals in Lowell, Massachusetts, while away from her personal residence at Gloucester, Massachusetts, and for travel between these two cities, when a Tax Court decision has denied petitioner's claim to a deduction for similar expenses for the calendar year 1944 on evidence which is essentially the same as we have here?
2. Is the petitioner entitled to a deduction of $796.56 for the calendar year 1945 for room and meals in Lowell, Massachusetts, while away from her personal residence at Gloucester, Massachusetts, and for travel between these two cities?
The issue of res judicata or estoppel by judgment is raised affirmatively by respondent in his answer and it has been stipulated that we may take judicial notice of the entire record in the former proceeding as if such record had been introduced in evidence and received in this proceeding.
Both parties in arguing this question of res judicata relay upon the Supreme Court's decision in Commissioner v. Sunnen, 333 U.S. 591. We think that case supports the Commissioner. In that case, among other things, the Supreme Court said:
* * * Income taxes are levied on an annual basis. Each year is the origin of a new liability and of a separate cause of action. Thus if a claim of liability or non-liability relating to a particular tax year is litigated, a judgment on the merits is res judicata as to any subsequent proceeding involving the same claim and the same tax year. But if the later proceeding is concerned with a similar or unlike claim relating to a different tax year, the prior judgment acts as a collateral estoppel only as to those matters in the second proceeding which were actually presented and determined in the first suit. * * *
Of course, where a question of fact essential to the judgment is actually litigated and determined in the first tax proceeding, the parties are bound by that determination in a subsequent proceeding even though the cause of action is different. * * *
In the instant case, although the cause of action is different from that involved in Beatrice H. Albert, supra, because here the taxable year is 1945 whereas in the former proceeding the taxable year is 1944, yet the material facts which have been proved in each of the proceedings are the same. It is true that in our findings of fact in the former proceeding we had a finding which stated: ‘The record does not show whether or not the petitioner's husband was engaged in any trade or business during 1944.‘ In the instant case we have made a finding from the evidence that: ‘The husband was a lawyer and supported the family as economic head of the household.‘ Petitioner in her brief argues strongly that the evidence she has supplied in the instant case which enables us to make the foregoing finding is a substantial difference from that which we had before us in Beatrice H. Albert, supra, and, therefore, res judicata does not apply.
We do not agree that the difference is at all material to the issue which is involved in the present proceeding and which was also involved in the former proceeding and was there decided against petitioner. Whether petitioner's husband was employed in 1945 and supporting the household has no bearing on whether petitioner is entitled to the deductions which she here claims. We, therefore, think res judicata is applicable and we so hold.
However, even if we should decide that res judicata is not applicable our decision on the merits would be that petitioner is not entitled to the deductions which she claims. The reasons given by us in Beatrice H. Albert, supra, as to why the deductions there claimed were not allowable are equally applicable here and we need not repeat what we said there. Petitioner strongly contends that because she has proved in the instant case that her husband was employed in 1945 and the family home was at Gloucester, Massachusetts, this gives her the right to take the deductions which she claims. Petitioner, in arguing this point in her brief and in speaking of our decision in the former proceeding, among other things, says:
* * * It is almost inescapable that had it appeared that the husband was gainfully employed in 1944 the decision would have favored the petitioner. The record in the first case shows that the counsel for the petitioner was named Louis Albert but the marital relationship did not occur to the Court as an inferable (sic) fact or, if it did, as a fact indicating that the husband was gainfully employed in 1944.
As we have already stated in discussing the issue of res judicata, we do not think it is at all material that petitioner's husband was employed in 1945 and living in Gloucester. Nothing that we said in our opinion in the first proceeding indicated that our decision was influenced by the fact that the record in that proceeding did not show whether or not the petitioner's husband was engaged in any trade or business during 1944. Petitioner's argument that our decision was influenced by such fact, we think, is made under a misapprehension.
In the recent case of Andrews v. Commissioner, 179 Fed.(2d) 502, affirming a memorandum opinion of our Court, the Fourth Circuit held that a taxpayer was not entitled to deduct rent, meals, and other miscellaneous expenses while employed in Washington, D.C., on an indefinite ‘war service‘ appointment, a period during which he maintained his family in the home occupied by them during his previous employment in Boston, Massachusetts. It is true that in the Andrews case the taxpayer was the husband and, therefore, the head of the household, whereas the taxpayer here is the wife and not the head of the household, but we are unable to see where that makes any difference in deciding the issue which we have here to decide. There are some cases involving other questions where such a difference in the facts might be important, but not here.
Therefore, even if we should assume that res judicata is not applicable and that our decision should be on the merits, we hold that petitioner is not entitled to the deductions which she claims.
Decision will be entered for the respondent.