PEURIFOY v. COMMISSIONER

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Argument of Daniel R. Dixon

Chief Justice Earl Warren: Number 46, James E. Peurifoy, George V. Stines, Betty O. Stines, et al., Petitioners, versus Commissioner of Internal Revenue.

Mr. Dixon, you may proceed.

Mr. Daniel R. Dixon: Excuse me Your Honor, may I move the admission of Mr. Pollock before the State --

Chief Justice Earl Warren: Yes, yes.

The motion is granted.

Argument of Earl E. Pollock

Mr. Earl E. Pollock: Mr. Chief Justice, if it please the Court this matter is involved in the deductibility of certain travel expenses of construction workers.

I would like to read the questions involved from the brief.

Where petitioner has entered upon certain construction employment away from their established residences prior to the taxable year for periods lasting in approximately 20 1/2 months, 12 1/2 months, and 8 1/2 months respectively and terminated such employment during the taxable year, the question is presented as to whether or not the amount expended during taxable year of board and lodge while so employed as construction worker at or near the construction site and for transportation expenses to return to their respective residences upon the termination of such employment, are non-deductible expenses within the provisions of Section 24 (a) (1) of the Internal Revenue Code of 1939.

And if it is determined that said expenditures are not personal within the provision of Section 24 (a) (1), a further question was presented as to whether or not the expenses in question are deductible under the provisions of Section 24 (a) (1) of the Internal Revenue Code of 1939 as amended.

These two sections, Section 23 and Section 24, I would like to read, “In computing net income there shall be allowed as deductions - (a) Expenses; (1) Trade or Business Expenses; (A) In General all the ordinary and necessary expenses paid or incurred during a taxable year, traveling expenses, including the entire amount expended for meals and lodging while away from home in the pursuit of a trade or business; and Section 24 - general rule; in computing net income, no deductions shall in any case be allowed in respect to personal, living or family expenses.

A summary of the facts; there are three petitioners involved and the respective periods of employment set forth in the question, 8 1/2 months, 12 1/2 months, and 20 1/2 months respectively.

Each of these petitioners had a fixed residence for the entire year in controversy.

Each of the petitioners is a construction worker.

Each obtained his employment through his union local.

Each belongs to the United Association of Journeymen and Apprentices of a plumbing and pipe fitting industry of the United States and Canada, hereafter referred to as the union.

The same hiring procedures were followed in respect to all the employments of the various petitioners.

A construction site is a place of limited employment for all construction workers both employees and employers.

By its very nature it must end in a relatively short period of time.

Construction work by its nature depends upon increasing the local supply of skilled labor by bringing in workers from various parts of the country.

The journeymen and craftsman normally work on several construction sites in the course of the year.

Some jobs on rare occasions last several years, but normally the jobs last a matter weeks or months.

Turning to petitioner Peurifoy, Petitioner Peurifoy was saying he lived in his own home that he had built personally which is located at Kure Beach, North Carolina.

His union local was located about 20 miles away in the City of Wilmington, North Carolina, Local number 329.

His practice of work was to obtain work through his union local for an area as close as he usually could to his home.

He returned -- when work was not immediately available near his home, he would take work wherever the union could find employment and would return to his home on weekends.

His work itinerary is set more in the petitioner's brief and it involved about six jobs which lasted from one week to 20 1/2 months, covering about a four-year period.

Petitioner Stines was married with one child.

He owned his home in Raleigh, North Carolina in the sense that he was purchasing his home in Raleigh.

His wife and child lived in his home for the entire year, 1953, which is the union controversy.

Petitioner Stines worked out of Raleigh.

His union local, number 725, was located in Raleigh.

His practice of obtaining work was very -- it was identical to the general practice of Peurifoy.

He would -- would contact his union local for work and he would then take work as close to his home as possible and when such work was not available, he would take it at more distant locations.

Justice Hugo L. Black: What difference it were though, ranging from what to what?

Mr. Earl E. Pollock: Some of these employments would range as far away as from Raleigh, North Carolina they would range the rest as to South Carolina, Charleston.

Most of them were in the State of North Carolina.

On one occasion one of these petitioners went as far away as Barberton, Ohio.

Justice Hugo L. Black: How long did he stay there?

Mr. Earl E. Pollock: He stayed there one week Your Honor.

Justice Hugo L. Black: I notice that Peurifoy was 32 -- he was 20 miles away from home.

Mr. Earl E. Pollock: That was his union local Your Honor, that was not his place of employment.

In other words, his -- his home was physically located 20 miles from the headquarters of the union local.

Justice Hugo L. Black: That's what I told you.

Mr. Earl E. Pollock: Thank you.

Now, petitioner Stines, his employment itinerary involved about 30 jobs which lasted from two weeks to 12 1/2 months over about a four-year period.

During the taxable year he was employed at Charleston, South Carolina, in Fort Bragg, North Carolina for periods of three weeks and seven and a half weeks respectively.

Now, the commissioner has conceded that expenses which were incurred in respect to his employments at Charleston and Fort Bragg were deductible.

In respect to petitioner Hall, petitioner Hall, the situation was very similar to that of petitioner Stines.

He was married with three children.

He was -- purchasing his home in Raleigh and his wife and children resided in this home during the entire year of 1953.

Petitioner Hall was also a member of Local 725, located in Raleigh.

His employment itinerary, as set forth in the brief, involved about nine jobs, lasting two weeks to eight and a half months over a four-year period.

Now, the petitioners make their first point at this stage in this respect.

We brought them out -- position on this contention that these facts which are not all the facts by any means ably support the trial court's decision and that the principle is a well-established law that the tax rule determinations of a trial court are not being upset by an appellate action.

The second contention of petitioners is this, that the results of the Court of Appeals below are bottomed solely on the doctrine which we maintain is erroneous that home is synonymous with post of duty and this is the heart of this matter as the one that requires full amplification.

Justice Hugo L. Black: May I ask -- you said trial court here, it's the tax court.

Mr. Earl E. Pollock: Tax Court, I beg your pardon Your Honor at the trial court here.

Justice Hugo L. Black: It was found back and decided it how?

Mr. Earl E. Pollock: They decided in our favor.

They held -- they held that these expenses were not personal and they held further -- and the work was temporary and that -- that all taxpayers were entitled to this deduction.

Justice John M. Harlan: Where did the concept of this temporary residence (Inaudible) statute?

Mr. Earl E. Pollock: There is no such concept under the statute.

Justice John M. Harlan: There is not –-

Mr. Earl E. Pollock: No, I intend to develop that in full Your Honor.

There is no such and that is as a matter of fact that is one of our major contentions in this regard.

Justice Charles E. Whittaker: How can (Inaudible) what you have to sat about (Inaudible) having some meaning of tax home (Inaudible)?

Mr. Earl E. Pollock: Well I'm certainly glad you asked that question Your Honor.

That is a thing that I'm moving into at the moment.

Unknown Speaker: To understand what?

Mr. Earl E. Pollock: The heart of this matter is Section 23 and I'm going to use abbreviated language if the Court will permit in Section 24.

Now Section 23 says this, “You can deduct family expenses away from home in a pursuit of a trade.”

This is a positive thing in that it creates a deduction.

Now Section 24 says you cannot deduct personal expenses.

Now Your Honor, to my mind, this entire matter comes to rest on two words.

The meaning of the -- word “home” in Section 23 and the meaning of the word “personal” in Section 24, that is all.

The entire matter has been a subject of confusion and controversy for over 30 years in the courts and basically I think it's very simple.

To begin with, in the 90-Day letter which is the foundation for disallowance of this deduction there was one ground and one ground only that petitioner alleged as a basis for denial.

He said these expenses are-- are personal.

That is a Section 24 matter exclusively.

He said these expenses are personal, that's all.

Now, the respondent in his brief in the summary of the argument has bought him in my opinion, his entire case on his position that the petitioner's expenses were not incurred away from home.

And I would like to point out that the significance of home is a Section 23 matter.

It has nothing to do on the face of it and we will -- I'll maintain it has nothing to do in actuality with Section 24 regarding personal.

And the -- the Commissioner's statement in his brief is this, in the Commissioner's view the taxpayers here are not entitled to the deduction claimed as traveling expenses because they were not incurred away from home.

Now something has got to be wrong on face of it when the Commissioner in his brief is saying that these expenses are not deductible because they're away from home and the Commissioner's 90-day letter saying they're not deductible because they're personal.

Now this -- this result comes about by this doctrine that Your Honor referred to as home being equivalent to post of duty.

And on the face of it, the deduction arises only if you are away from home.

You must be away from home or there is no basis for deduction.

Unknown Speaker: That is the statute.

Mr. Earl E. Pollock: That's what the statute says.

Now this doctrine which has been plaguing these things since 1927 and got started in the – Whitaker case says this.

It says, “Where you work is your home.”

Now gentlemen -- excuse me Your Honor at that point logic, my logic is shot.

How can you possibly have a statute that says, “You can deduct expense away from home and then say that the word home means where you work.

Literally, it's self-annihilating and there is no such thing as a possibility of being away from such a home as defined by the respondent's statute, it cannot exist.

Justice Charles E. Whittaker: How is it home that you were working from a different place?

Mr. Earl E. Pollock: Oh, it's even more fantastic enough your Honor.

Yes, literally you would always be away from home and I have maintained in my brief.

Justice Charles E. Whittaker: Home is actual if post of duty meant home.

Mr. Earl E. Pollock: Yes, excuse me.

Justice Charles E. Whittaker: How could it be away?

Mr. Earl E. Pollock: It's strapped to your back is the way I expressed it and you cannot escape your home.

In their brief respondents even went so far as to concede that my petitioners had a tax home at Raleigh and Wilmington.

Being away from this taxed home.

And the word “taxed home” should be in quotes because it is a word of unsettled meaning at this moment, but they conceded that we had tax home at Wilmington and Raleigh, but this wasn't enough.

Their argument was that our homes have been shifted to where we work.

That makes an impossible burden on the taxpayer.

Justice Felix Frankfurter: I read only the other day that they implore that one person in five changes his home in the United States and both having been as commentary on stability of this country.

Mr. Earl E. Pollock: Well --

Justice Felix Frankfurter: Life is so fantastic.

Mr. Earl E. Pollock: I don't know Your Honor.

I don't know.

I hadn't going into that particular phase of it.

Except this, I'm going make this generalization in my argument.

I'm going to make the generalization that it's more desirable that it almost destabilized than if they'd be -- they'd that -- if you moved frequently.

And I intend to bring that in as a part of the effect of this doctrine is -- is to increase the shifting of homes under the --

Justice Felix Frankfurter: Are you for or against it?

Mr. Earl E. Pollock: Pardon?

Justice Felix Frankfurter: Are you for or against it?

Mr. Earl E. Pollock: I am for --

Justice Felix Frankfurter: (Inaudible)

Mr. Earl E. Pollock: I am for stabilized homes.

Justice Felix Frankfurter: Stabilized homes –

Mr. Earl E. Pollock: And I think that -- that the act of the Commissioner in denying this deduction forces my --

Justice Felix Frankfurter: That he did much, didn't he?

Mr. Earl E. Pollock: -- anti-social and I -- I have so argued in my brief Your Honor that it -- it forces my people to become migrants and -- and we don't -- we don't like that.

Justice Hugo L. Black: Are there different State where they work on these jobs as I understand getting over to the States didn't come back as long as they were here when they seat that that's down?

Mr. Earl E. Pollock: Your Honor I have to speak for North Carolina, but I'm certain that North Carolina could impose such tax on them because North Carolina imposes its income tax on the two different theories, the theory of residence and the theory of income earned within the state and North Carolina does impose the income tax on these people.

I couldn't speak beyond that, another burden and I'm -- I'm fairly certain that under the constitutional ground for taxing income that this burden could levied in every state if it saw fit to do so and now I speak that merely as a personal opinion.

I have no knowledge of the extent of State taxation.

As I pointed out this -- this doctrine erases in effect Section 23.

It -- it nullifies, it gives -- it gives a Commissioner, once this doctrine is applied the Commissioner then -- I don't know how to make this expression exactly but has the taxpayer within his power because from that moment, the Commissioner's position is out from under the statute.

The statute does no longer apply and the only question then is, is this.

Do you apply this doctrine or not?

If you apply the doctrine denial is then immediate and automatic.

No inquiry into the fact is necessary -- never.

Now there may be a factual inquiry as to determine whether or not you're going to apply the doctrine, but if the doctrine is applied, or excuse me, if the doctrine is valid then it should be universal application.

And as pointed out if it were of universal application, that is if it were good law, it would deny deduction to everyone in a literal sense.

So then the Commissioner must do this.

He must find methods for not applying the doctrine and I submit that here is no more graphic proof of then validity than this.

If this were a case -- is based on -- on the presumption that we do not qualify for an exception in this very doctrine.

(Inaudible) How can there be an exception to the statue to primary to wring from deduction only?

Logically, I don't think there can be, but the Commissioner in seeking to justify this, tried to justify on equitable ground.

Well I say in regard to that -- that the Commissioner is from my outside observation has a duty to enforce the Internal Revenue Law and not define equitable ground for not enforcing it.

So if this doctrine is valid law, then it looks to me like that there's some question as to how thoroughly the Commissioner is -- is enforcing the statute.

The answer of course is -- that basically the thing is wrong to begin with and this is the only way they can -- they can keep and tying it to literal extreme already described and this explained the development of this so called temporary versus indefinite concept.

And --

Justice Hugo L. Black: What about as I observed the category relating to traveling salesman?

Mr. Earl E. Pollock: Well, if you took the traveling salesman and said literally the way was selling merchandise is where your post of duty, you'd end up with him -- with he being denied the deduction, but the traveling salesman fee is a little more -- is a little easier than the construction workers case for this reason.

The traveling salesman usually has a headquarters and a firm and a place that he works out of and the Bureau not only recognize that that is his post of the duty.

So the traveling salesman -- there are other types of employment where I think the question could be more difficult, but as far the traveling salesman case, they -- don't believe they have a serious problem with this issue at least most of them.

Did that answer your question Your Honor?

Justice Hugo L. Black: It did.

Mr. Earl E. Pollock: Now turning to the word personal.

The word personal denial when tax to an expense denies that extent as a deduction.

Now under the Commissioner's theory it works like this.

He says home is where you work.

Therefore, you're not away from home.

Chief Justice Earl Warren: We'll adjourn now --

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Argument of Daniel R. Dixon

Chief Justice Earl Warren: Number 46, James E. Peurifoy, Paul V. Stines, Betty O. Stines, et al., Petitioners, versus Commissioner of Internal Revenue.

Mr. Dixon, you may continue your argument.

Mr. Daniel R. Dixon: Thank you, Your Honor.

Mr. Chief Justice, if it please the Court.

I have reached the point in my argument where I was about to turn my attention to the -- the meaning and definition of the word “personal” as it appears in Section 24 of the Code.

The word -- the -- the word “personal”, as used in Section 24, has two distinct factors.

The statute says that no deduction shall be allowed for personal expenses.

Now, the denial of the deduction is a legal conclusion and such denial should follow a determination at a particular expense of this person.

To restate, this means that, and to my mind and nothing but a factual determination of personal, should precede the legal conclusion of nondeductibility.

This seems patent from the statute itself.

Now, in the Commissioner's argument and in the Court of Appeals below, this is the method by which the conclusion of personal results.

Referring again to my previous reference that the Commissioner said this expense should be denied for the reason that petitioners are not away from home.

Now, the -- the deduction was originally denied for the reason that the expenses were classified as personal.

The -- the word “home” appears in Section 23.

The word “personal” appears in Section 24.

Now, they are finding their criteria of the -- of the meaning of the word “personal” in Section 23.

And the -- the logic of the Commissioner's theory then becomes this.

Under Section 23, the deduction is denied automatically once the doctrine is applied the way you work at your home because you cannot be away from such a home at work.

This is a logical impact.

Then they say the expense is personal.

In other words, they say it's personal because it's nondeductible as they have defined the word “home”.

The whole structure of 24 is thereby reversed instead of determining that the thing is nondeductible because it's personal, they first determined that it is nondeductible under Section 23 and then label it personal and this --

Justice John M. Harlan: Well, the concepts blend together in some extent, don't they?

Mr. Daniel R. Dixon: Your Honor, I -- I say yes, provided the facts are kept clear, but this is done purely as a rule of law.

Requirement one under the Flowers decision says the expense must be ordinary and necessary.

Now, under the Commissioner's theory that we have only failed to meet requirement two that factually concedes that our expenses are ordinary and necessary.

Yet, at the same time they are holding that these expenses are personal.

Now, I say that factually, these are in conflict.

I turn to requirement three of the Flowers case.

Requirement three says that the expense must be incurred into pursue of the trade.

Now, again, under the Commissioner's theory, that factually concedes that my petitioners had met this requirement in a factual sense, and I also state that is factually in conflict.

And further, Your Honor, I do not think that the word “blend” correctly presents this issue.

I think this.

I think that since Section 24 is the section that was enacted to deny certain expenses that a factual determination should be made under Section 24 logically prior to a determination under Section 23 for if a factual determination is made, that expense is personal.

Section 24 strikes it down immediately.

There is no necessity to refer to Section 23 in any way because Section 24 says, “No deduction shall be allowed for a personal expenditure.”

Now, in the proceedings below, in the Tax Court, the criteria by which this matter was resolved and which has been used in other cases stated in brief on rare occasions, but has never been fully implemented was that an inquiry should be made to determine whether or not under the all of the factual circumstances is reasonable to expect demand to move his home to his place of employment.

Now, if under that criteria, which was -- which was developed in the Tax Court's decisions and which was reviewed by the entire court, Your Honor, they determined that it was unreasonable to expect our petitioners to move their homes to construction sites under these factual circumstances.

With that factual determination before the Court, then the question of the personal nature of these expenses were disposed of and the same thing is true of all of these travel expenses, the commuting situation which has complicated this issue ever since the Barnhill case.

Unfortunately, the Barnhill case realized that commuting in a sense, forces travel to get to work.

And they said, “We cannot reach the conclusion that a man's home is where he lives because of the commuting analogy.”

But there are two rebuttals to that, Your Honor.

The first is that commuting expense and travel expense must be separate and distinct types of expenses because the statute specifically permits the deduction of travel expense, but it does not permit the deduction of commuting expense.

The only thing necessary to clarify that particular phase of the problem is for the Court to make a preliminary determination if this is, is or not commuting expense and no one is arguing that commuting expenses should be deductible.

They have never been treated as an ordinary and necessary business expense.

They have been labeled personal and it's to pointed out in brief, I think, that this was an unfortunate and a fact to which contributes to the confusion here because by classifying commuting expense of this person and then analogizing commuting to travel expense, you get this word “personal” brought back in to the picture improperly.

It then obscures the element of choice, which, I think, is the fundamental issue in all of these cases whether or not these expenses result from the personal choice of a taxpayer or required by the needs of his business.

Our people have homes.

They're -- they tried to -- to stabilize their families, they have their children in school, all of these factors, and there are away from home in every sense of the word.

And on that point, one further thing, Section 24 requires an ascertainment of the difference between a personal expense and a business expense.

It does not require an ascertainment of the difference between a -- a deductible travel expense and a nondeductible one.

This is a matter which order in the Section -- the purview of Section 23.

Section 23 says expenses that are ordinary and necessary are deductible.

It does not permit all business expenses as deduction.

So the theory of 24 is to distinguish between business and personal expenses.

The function of 23 is to decide whether or not a particular travel expense is or is not deductible by meeting the three requirements which this Court has established.

Now, under this rationale of stating that an expense is personal because it is already been decided to be nondeductible, Section 24 is then emasculated and becomes nonfunctional because the result has already been previously determined under 23 so by this one theory, one principle of saying home is where you work, 23 is in the sense rendered nonfunctional and 24, both, are rendered non-functional.

At that point, then the so-called exception comes into the picture and the entire legal controversy revolves around what is temporary and what is indefinite and it is our position, Your Honor, that at this stage of the game, they -- that theory is completely out from -- on the both statutes.

It's running free.

It's fabricating its loss as it sees fit.

Justice John M. Harlan: Has there been any division among the Courts of Appeals since the Wallace case as to the home means -- meaning the -- the place of principle employment?

Mr. Daniel R. Dixon: To my knowledge, there has not.

I think that the Wallace case was the last clear expression on that in the Circuit.

Most of the cases have -- in the circuits have began to fall in with the Fourth Circuit's opinion in this matter.

We think they are --

Justice John M. Harlan: You know nothing wrong.

Mr. Daniel R. Dixon: Your Honor, as -- as I'm arguing today.

I would like to refer to the language of the Court of Appeals below in resolving this matter.

When the taxpayers in these cases went to the Tax Court carrying the burden of showing that the Commissioner's determination was incorrect, they produce nothing to show that their employment on the DuPont Project was not of indefinite duration.

Now, the evidence here, again, the evidence that they are referring to is evidence requiring -- regarding a requirement under 23 not a requirement under 24 and yet --

Justice Charles E. Whittaker: Is --

Mr. Daniel R. Dixon: -- the -- the personal choice factor is the very vital factor involved here and I say that this is a factual determination.

Justice Charles E. Whittaker: Well, is there not a finding, Mr. Dixon by the Tax Court that the service was temporary?

Mr. Daniel R. Dixon: There was a finding to that effect, Your Honor and we maintain that -- that even under the theory that respondent advocates that we have factually met our burden of proof.

In other words, I am arguing to a certain extent in the alternative.

I'll argue first that the theory is erroneous.

And second, that even if the theory is adopted, our facts qualify even under the Commissioner's theory itself, that we have sustained our burden of proving that this work was temporary in nature.

Justice John M. Harlan: How do you escape the impact of the third requirement in the Flowers case, namely, that the travel has to be pursuant to the interest of the employer?

It has to be on the employer's business.

Mr. Daniel R. Dixon: Your Honor, that I think, again is a misconception.

There are -- there are two rebuttals to that.

First, this Court, in Commissioner versus Flowers laid down the rule and in its substantive -- may I read that language to you, sir?

To reach the -- to state categorically, there is no such requirement in my opinion.

This court said, “The expense must --

Justice William O. Douglas: Where are you reading?

Mr. Daniel R. Dixon: -- requirement three.

Justice William O. Douglas: Where are you reading?

Mr. Daniel R. Dixon: I'm reading from the Flowers case, Your Honor.

Justice John M. Harlan: What page in your brief is that on?

Mr. Daniel R. Dixon: It's page 33 in my -- in my brief at the bottom of the page.

This means there must be a direct connection between the expenditure and the carrying on of the trade or business of the taxpayer or of his employee.

Now, there -- there is a further rebuttal for that position, Your Honor.

The Commissioner, himself has issued a ruling to the effect that that was no long -- that that was not a proper restriction on the deductibility of travel expenses.

In his ruling issued May 4th which was in regard to construction workers, he said this.

“Thus, Flowers decision and those taking a similar approach to the extent they are all expenses or not ‘incurred in pursuit of business because the employer did not require the taxpayer to travel in order to perform his duties, do not constitute precedence to be followed in determining deductibility',” and so forth.

Now, that --

Justice John M. Harlan: What -- what does that to?

Is that in your --

Mr. Daniel R. Dixon: This is -- this not cited in brief, Your Honor.

This is a ruling of which there are great many.

I'm reading it from --

Justice John M. Harlan: It means that the Commissioner against the Flowers case is wrong, is that it?

Mr. Daniel R. Dixon: It too errors in.

First of all, he said this, he says the Flowers case held that it was necessary to be in the pursuit of the employer's business.

Justice Charles E. Whittaker: But it doesn't hold.

Mr. Daniel R. Dixon: But it does not hold and second he says the Flowers case held and then he says our brush has found the Flowers case, he says that do not constitute precedence, referring to the Flowers case.

In other words, first, he misquotes Flowers and then when he -- when he -- his position can't be sustained, he says that Flowers doesn't control any, is the way I interpret his position in his own ruling.

Justice John M. Harlan: What is that ruling?

Could you give us a reference?

Mr. Daniel R. Dixon: Yes, Your Honor.

It is not -- I think, it -- it's very difficult to get in an official publication, but I am reading it as -- as an appendix to H.R. 2680, 85th Cong., 2d. Sess.

House Report Number 2680 and it appears on page 15, close to the bottom of the page.

Now, I would like to point out some other.

Justice Hugo L. Black: Is it cited in your brief?

Is it cited in your brief?

Mr. Daniel R. Dixon: Your Honor, I don't believe I have cited this in my brief.

There -- there were a number of -- there are just numerous of these rulings, and I don't believe I have recalled it.

But --

Justice Hugo L. Black: Do you mind giving that citation again?

Mr. Daniel R. Dixon: It's H.R. 2680, 85th Cong., 2d. -- 2d. Sess.

Chief Justice Earl Warren: Is it in the Government's brief?

I see counsel is -- is replying to you --

Argument of Martin F. O'donoghue

Mr. Martin F. O'donoghue: Your Honor, on page 23 of government's brief.

Rebuttal of Daniel R. Dixon

Mr. Daniel R. Dixon: I -- I have discussed this point in brief, Your Honor, but I do not believe I discussed it in reference.

I discussed it in abstract rather than in reference to this particular citation.

Now, Your Honor will permit, there are some other cases of -- of, I would say rather extreme judicial and administrative legislation.

I like to refer to the fact in the Whitaker case.

James R. Whitaker was an engineer who has a home in Iowa and he -- in his employment with a New York construction firm that we had a contract with the army that his employment carried him to Thule, Greenland and his employment was an offshore construction.

Now, Whitaker worked in Greenland a total of 222 days for the taxable year in controversy today.

He returned to the States twice during that 222 day period and the court said there, “Your work is indefinite and you are not entitled to travel expense deduction.”

This -- this need marks the outer boundaries of extremity in denying his deduction.

I would also like to refer to the fact in the instant case.

In the instant case, petitioner's assignment was conceded to have deductible expenses in regard to his employment in Charleston and in regards to his employment at Fort Bragg.

And one of his employments lasted three weeks, as I recall, and the other, seven and a half.

But petitioner's assignment was following the same pattern of working and living throughout the entire year.

His relationship to his employer was the same.

The manner by which he obtained his work was the same.

Substantially, there was no difference in his employment in any way.

The Commissioner has not argued that these are -- do not give rise to deductible expenses yet he argued at the same time that his employment at -- at Kinston does not give rise to this deduction.

One further thing before I leave what I can say -- what I am specifying here as illustration of -- of legislation outside this statute.

In this very case, there is considerable reference to the fact that my petitioners quit the employment on some of these occasions and the -- the apparent logic in this is that petitioners could have work longer.

If they had worked longer, then their work would have become indefinite and indefinite employment does not give rise to travel expenses therefore, they are denied this deduction because they quit the employment.

Now, this adds a complete new requirement for deductibility that so far as I know is new in this case and I think that, while I'm not going to dwell on the constitutional aspect, if -- if the tax laws of the country are going to be interpreted in such a manner that the fact that a man quits his job, results in a denial of -- of the deduction that he would otherwise be entitled to, I say there is a grave question there of infringing his right or infringing the Thirteenth Amendment regarding his involuntary servitude and it is pointed in brief but are not directly in point.

In the opinion of these cases, the language of the Court there says that a man had a right, an unqualified right to terminate his employment and I think that this throws the strong shadow over that right because he puts a -- a taxpayer in a position of having to stop and consider very seriously if he can terminate his employment without loosing his tax deduction.

Now, the cases have -- are -- are falling into the constant theme of the cases in the Tax Couth and the Circuit now is temporary versus indefinite.

And this thing is called an exemption and I would like to read respondent's language as to this exception.

He said this exception is ameliorated in nature and is apparently based on the theory that it is inequitable to call the post the duty to tax home if the taxpayer being there only temporarily is forced by economic circumstances to maintain elsewhere.

What -- my objection to this is that if you accept as valid, the principle that a man's home is where he works, then the little application denies all taxpayers to travel expense then the only thing that becomes valid is what is here called an exception.

And I think it's difficult to find a more -- clearer repudiation of the original principle than -- than this so-called exception which he says is ameliorated in nature and is apparently based on the theory that he says is -- is equitable in nature.

Justice Charles E. Whittaker: Well, isn't it a matter of fact that it would be difficult for Congress or anyone to compose a statue in plainer words than this Section 23?

Mr. Daniel R. Dixon: To my mind, it is, Your Honor.

I think every child understands that home is home and if I may read one further thing --

Justice John M. Harlan: Giving rise to an awful lot of litigation.

Justice Charles E. Whittaker: But why shouldn't --

Mr. Daniel R. Dixon: It has because --

Justice Charles E. Whittaker: I ask why probably and improperly, I said why shouldn't?

It seems to me a statute would say this, “All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade of business, including travelling expenses while away from home in the pursuit of a trade or business are deductible.”

Now, what's ambiguous or uncertain about that?

Mr. Daniel R. Dixon: To my mind, nothing, Your Honor.

And I maintain that the statute should be put back on the books as written.

Now, because of the expiration of my time --

Justice Hugo L. Black: When you say --

Chief Justice Earl Warren: But your time has not expired.

Mr. Daniel R. Dixon: if I -- excuse me.

I understand, Your Honor.

Justice Hugo L. Black: When you say -- when you say put back on the books as written --

Mr. Daniel R. Dixon: I mean that the word --

Justice Hugo L. Black: -- are you saying that the Flowers case is wrong and should be overruled?

Mr. Daniel R. Dixon: No, I'm not, Your Honor.

I have argued very strong all through this that the Flowers case is correct, that the Flowers case is based on these three requirements.

The -- the denial of deduction here was not based on a failure to meet any requirement in Flowers, except that you interpret away from home as being away in Florida.

The stipulated facts show that my people are away from home, You Honor.

The stipulated facts show that they were away from home.

And in Flowers case, they said that this decision was a factual determination and the facts as stipulated would show that my people are away from home.

And --

Justice Hugo L. Black: Is that the only differentiation you find between the two cases?

Mr. Daniel R. Dixon: The one -- I'm not sure I understood that question.

Justice Hugo L. Black: Is that the only differentiation you find between the two cases?

What -- factually speaking from the operation of the Flowers is taxed than this one, what are the factual differences?

Mr. Daniel R. Dixon: Oh, on the basis of the fact, I think the Flowers case brings a factual determination that these expenses were -- were incurred there as a result of the personal choice of the taxpayer.

That involved an attorney who had been retained by railroad but did not want to move his office to the -- to the railroad's main office.

He kept his home the way it had been before and conducted his affairs from there.

That clearly met the factual determination or sufficient facts for the Court to reach that result that this was personal in fact and once that determination had been reached, then, actually, the -- the expense became nondeductible under Section 24 immediately.

Although the Court didn't -- didn't place it under Section 24, they said you fail to meet requirements one or one and three which is failure to be ordinary and necessary and failure to be required by the expenses of the business.

In our case, respondent's theory conceives we have met requirements one and three.

This is an enormous difference.

There the result stems from the theory, the substance in all theory that where you work is your home.

Justice Hugo L. Black: Well --

Justice John M. Harlan: Is there --

Justice John M. Harlan: Excuse me.

Justice Hugo L. Black: You said differentiated on basis of personal choice.

In the Flowers case, the man had to go to Mobile to keep that job, didn't he?

Mr. Daniel R. Dixon: In the Flowers case, he was retained his general counsel by railroad, but he did not want to move his home to the office of the railroad.

He kept his home where -- where it was and then sought to deduct his expenses.

Justice Hugo L. Black: Backwards and forwards?

Mr. Daniel R. Dixon: Back and forth.

Justice Hugo L. Black: You said that makes -- makes it as a personal choice.

Mr. Daniel R. Dixon: Well, I don't say that, Your Honor.

I say this that there is a difference.

Justice Hugo L. Black: Isn't that just what your distinction is?

Mr. Daniel R. Dixon: Well, the Court so found that was a matter of personal choice on those facts, but I say this, there was facts there.

Justice Hugo L. Black: Couldn't -- couldn't they find that here that it was a matter of personal choice?

Mr. Daniel R. Dixon: Well, it -- I don't think so, under the proper interpretation of the facts, Your Honor, because in this case, the nature of my peoples' work is such that -- factual determination that they were requiring this as a matter of personal choice doesn't follow.

Justice Hugo L. Black: They wanted that job if the other -- those jobs with the other places?

Mr. Daniel R. Dixon: Well, they had to live, this is their trade.

They follow heavy construction.

If they're going to live, they -- the procedure is this.

They have a local union that they go to for references and they maintain home adjacent to this local union headquarter.

When work is available near home, they sent near home.

When work is not available near home, they take the closest thing they can get.

When the work is over, they return home and this is the -- the factual pattern that these men follow.

They come home at every opportunity that they can and get work near home but someone has to move when construction work is involved.

It's -- it's necessary.

Justice Hugo L. Black: You mean they have to go to a number of different places?

Mr. Daniel R. Dixon: They don't have to go to a number of different places.

They get their reference from their union and when they go there, they are actually put on, but they -- their heads are counted in advance if they're going there and the actual retention of the employment is consummated at the construction site.

Justice Hugo L. Black: Do you draw any support from the fact that this man went to Mobile for a permanent job and he knew it was a permanent job, while these people go to different localities and have to go to different localities in order to get any job at all?

Mr. Daniel R. Dixon: That's correct, Your Honor, and they know that when they go, the work cannot last beyond the length of the construction job and for many -- other reasons, it may be terminated properly.

I save a little time for rebuttal.

Chief Justice Earl Warren: You may.

Mr. Pollock.

Argument of Earl E. Pollock

Mr. Earl E. Pollock: Mr. Chief Justice, may it please the Court.

At the outset, I like to restate, if I may, just what the party is complaining about here.

Contrary to the impression which may have been conveyed, the question before the Court is not whether or not construction workers should be allowed a deduction for travel expenses in connection with out-of-town construction job.

On that broad question, both parties are in full agreement.

The whole controversy here relates solely to the extent to which this deduction shall be allowed.

Now, as Mr. Dixon pointed out on Thursday, most of these out-of-town construction jobs are of a short-term nature, requiring an employment only of a few weeks or of a few months.

As to employment of that nature, it is the policy of the Commissioner, and has been for some time, it is the policy of the Commissioner who has made every effort to be reasonable in this area to allow the deduction.

But these taxpayers are not satisfied with that.

They claim that they are entitled to this deduction for travel expenses including the regular cost of meals and lodging on an everyday, day in day out basis regardless of the duration of the construction project or their employment on that project.

Justice Charles E. Whittaker: Is that to say then Mr. Pollock that whether the exemption shall or shall not be allowed, depends upon the Commissioner's belief whether the period involved is a little more or a little less?

Mr. Earl E. Pollock: I think that the statute requires that determination.

The -- in fact, this Court even recognized in Flowers case that in connection with living expenses at a particular point as distinguished from expenses incurred while actually traveling, that the stay at this particular point must be temporary.

For example, the -- the Court said in Flowers case that travel expenses in pursuit of business within the meaning of this statute could arise only when the railroads business forced the taxpayer to travel and to live temporarily at some place other than Mobile.

The difference, Your Honor, if I -- if I may say, there's a difference between travel expenses which are allowed under Section 23 and living expenses which are forbidden under Section 24.

This presents a difficult determination.

Now, these taxpayers take the position that the amount of time spent on job is immaterial whether it's 20 and a half months, two years, three years or more.

Panama Canal, for example, took 10 years to build.

Yet these taxpayers are contending because construction work is in the nature of a temporary employment because sometime the construction job will be finished, that therefore, they are entitled to deduct all of their living expenses during that period.

And the -- the Commissioner, on the other hand, believes that the -- this deduction for traveling expenses under standards, generally applicable to all taxpayers cannot be expanded to that point.

Commissioner is faced with the problem of reconciling these two statutes.

Congress clearly had two purposes in mind, and if I may say so, the problem of finding the dividing line is not an easy one.

The problem arises in large measure because the typical taxpayer really lives sort of a double life.

In one sense, he's a seeker after profit, an income producing mechanism, has certain expenses incident to that, yet, in another sense, he is a human being with a customary human needs.

For example, we all have to have meals whether we're working or not, whether we're located at the particular time near our residence or not.

Now, this -- this kind of double life, this schizophrenia, is recognized in the Tax Court.

Here, we have Section 25 which allows to each taxpayer a $600 personal exemption for himself and generally speaking, for each member of his family.

Then we come to deductions and other provisions of the statute, Section 24 flatly forbids any deduction for personal, living or family expenses, except for extraordinary medical expenses.

On the other hand, Section 23 (a) (1) (A) allows a deduction for ordinary and necessary traveling expenses including the cost of meals and lodging while away from home in the pursuit of a trade or business.

Now, the problem is to reconcile these two Congressional mandates which are not altogether consistent without doing violence to either one.

The test is in no sense an easy one particularly because of the Commissioner's obligation to apply the statute, so that a deduction is not allowed to one class of employees, which results in an unjust discrimination against other classes of employees who may be very similarly situated.

Justice Felix Frankfurter: Are you saying simply that traveling expenses imply the shuttling process, and if there's any kind of permanence and what is permanent is not something you can get an answer to that, putting a nickel in the slot machine, as against some kind of stability?

Mr. Earl E. Pollock: That's right.

That's right.

Justice Felix Frankfurter: Is that the whole business?

Mr. Earl E. Pollock: That's essentially -- let me give you an example, Your Honor.

Let's suppose that you -- we have a traveling salesman.

There's no question that while he is away from his home office, he is entitled to deduct his travel expenses including meals and lodging.

But suppose he stays at a particular point, let's say at a branch office for six months, for a year, for a year and a half, when does he stop traveling?

And when does he start living there in the sense that the Section 24 prohibition against the deduction of living expenses comes into play?

These problems don't arise while a man is on the go or is moving.

The question is what kind of depth or exception can you make to this Section 24 prohibition against the deduction of living expenses in connection with this deduction which is allowed for traveling expenses?

Justice Charles E. Whittaker: But in context of it in the statute (Inaudible) didn't they say that all ordinary and necessary expenses incurred in a taxable year, carrying on any trade or business including travel expenses are also included in the entire amount expended from (Inaudible) while away from home in pursuit of a trade or business are deducted.

Mr. Earl E. Pollock: That's right.

There are problems -- and the Commissioner's problem is to apply that mandate to any -- to a multiplicity of different factual situations in the light of the Section 24 prohibition against the deduction of personal expenses.

The problem arises, again and again, where is the dividing line between living expenses which are nondeductible and traveling expenses which are deductible.

If I say if -- if these people were traveling, there wouldn't be any question that they would get a deduction.

The question or the problem arises, if you'll excuse me --

Justice Charles E. Whittaker: Yes.

Mr. Earl E. Pollock: -- when -- when the taxpayer stops at a particular point, for example, for 20 and a half months or two years or three years, is he then entitled to deduct every -- all the cost of his meals and lodging simply because he has taken a trip three years before?

Justice Charles E. Whittaker: Perhaps not.

In (Inaudible) that Section 24 applies to the residence of such expenses as meals, lodging, etcetera has remained after the application of Section 23, which is specific.

(Inaudible) what 23 provides all remaining fall under 24.

Mr. Earl E. Pollock: I think that there's nothing objectionable at all to that approach as long as he realizes that Section 24 has to be applied.

Justice Charles E. Whittaker: Yes.

Mr. Earl E. Pollock: And then we get --

Justice Charles E. Whittaker: (Voice Overlap) --

Mr. Earl E. Pollock: -- then we -- then we get to the problem of defining what is meant by “while away from home in the pursuit of trade or business”.

Justice Charles E. Whittaker: Do you think -- do you -- I am just asking for information this time.

Do you think that Congress used the words -- the phrase “away from home” in any other than ordinary generally accepted common sense of the purpose?

Mr. Earl E. Pollock: Oh, yes.

Justice Charles E. Whittaker: You think it is?

Mr. Earl E. Pollock: Yes and the Commissioner, ever since 1921, when the statute was enacted, has uniformly ruled that home within the meaning of the statute means -- refers to business home.

The Tax Court has uniformly ruled ever and probably dozens of decisions.

Every Court of Appeals has so held since Court's Flowers decision.

Again and again, Congress has reenacted the statute without any basic change in the terminology.

In these circumstances, we think that the administrative interpretation must certainly be deemed to have received -- implied Congressional approval as this Court said of a related interpretation in the Flowers case.

Moreover, in 1952, this interpretation was given what we regard as further recognition by Congress.

In 1952, which was one year before the tax year involved here, Congress enacted an amendment to this statute.

This amendment dealt with the taxes of Congressmen themselves, members and representatives.

Congress provided a specific exception to the general rule as to members of Congress.

This amendment provided that the place of residence of a member of Congress in a district, which he represents, shall be deemed to be his home for purposes of this travel expense deduction, but only to the extent of $3000 a year and in addition, this amendment was made operative only for two tax years.

This amendment --

Justice John M. Harlan: Where -- where is that cited in your brief?

Mr. Earl E. Pollock: It's --

Justice John M. Harlan: (Voice Overlap) --

Mr. Earl E. Pollock: -- dealt with in our reply memorandum from pages 3 to 6 of our reply memorandum, and there's a lengthy footnote at -- on pages 4 and 5 which still refer to legislative history of this amendment and the legislative history shows very clearly that Congress understood the general rule to be that a taxpayer's principle place of employment was his home within the meeting of the statute.

Mr. McCormick, on behalf of proponents of the bill, quoted a great length from the Commissioner's ruling and those who opposed this measure and there was heavy opposition of the measure, particularly in the Senate because it was regarded by those who opposed it as a discriminatory tax advantage in favor of members of Congress.

It was their regard -- regarded as clearly, making a special exception of the definition of home for members of Congress.

Of course, Congress did so because of the special circumstances facing congressmen frequently after maintaining a double residence.

But nevertheless, this statute, we think, shows on its face, and particularly in the light of the legislative history, that it was a congressional understanding beyond any doubt that home, within the meaning of the statute, referred to principal place of employment.

May I say in this connection that the taxpayers have filed a reply brief in response to our memorandum setting forth this legislative history and the petitioners in this brief have set forth certain quotations from the legislative debates.

According to the petitioners, these quotations show just the contrary of what the Government has stated.

However, we are real bound to point out that the statements quoted in petitioners' reply brief are taken out of context and tend to distort what actually transpired.

For example, the taxpayers quote Senator Walsh during the 1921 legislative debates as saying that under this travel expense provision that Congressman would be allowed to deduct their expenses while in Washington.

On that basis, the taxpayers say that therefore, the 1952 amendment merely restored what was the original purpose of Congress.

However, the taxpayers have not read quite far enough because on the very same page of the congressional record, Senator Walsh was answered by Senator Watson of Indiana, who was apparently one of the floor managers of the bill, and Senator Watson stated that he had just discussed the matter with three representatives of the Treasury Department on the floor and they had stated to him flatly that the home of a Congressman under the statute would be regarded as Washington and that therefore, Senator Walsh is strictly in error in stating that Congressmen, under the original provision, would be allowed to deduct their expenses.

We think that if -- if this legislative history is read in context, I believe -- we believe that only one conclusion can come from there and that is Congress has accepted this Congress -- this consistent interpretation by the Commissioner and by the Tax Court, and as I say, by every Court of Appeals, which has passed on in question ever since this Court's Flowers decision.

Justice Felix Frankfurter: Mr. Pollock, could you give me a piece of information?

What was the ground for -- whereas an apartment in New York City, say the Bronx (Inaudible) or New York manufacturers and his territory or neighboring towns in Connecticut and he takes his car everyday to his Connecticut territory in the morning and comes back in the evening, can he deduct the gas he consumes?

Mr. Earl E. Pollock: Yes, I -- I think there's no question that he can deduct transportation expenses.

Justice Felix Frankfurter: Can he deduct it if his territory are the five boroughs of New York City?

Mr. Earl E. Pollock: No -- yes, he can.

Yes, he can, transportation expenses.

Justice Felix Frankfurter: While away from home -- what does -- what does that mean physically away from the place where he lives?

Mr. Earl E. Pollock: There is a -- that would -- that would not be under this particular provision.

There -- the tax law draws a distinction between ordinary and necessary transportation expenses and travelling expenses away from home.

Justice Felix Frankfurter: But this wouldn't -- wouldn't come under this.

He would --

Mr. Earl E. Pollock: This would be --

Justice Felix Frankfurter: -- be away from home in that sense, would he?

Mr. Earl E. Pollock: Yes, there's a -- a recent case in the First Circuit which dealt with this very kind of problem, the Amoroso case which we cite in our main brief.

There, the salesman worked part of this time in the Boston area and then part of the time, he went beyond Boston up to New England and the Court held that he was entitled to his transportation expenses altering at time as an ordinary and necessary business expense that he was also entitled to his meals and lodging while he was away from the Metropolitan Boston area.

Justice Felix Frankfurter: And I understand that, but the notion for meal and lodging while away from home implies that he lodges away from home, doesn't it, but that is necessary?

Mr. Earl E. Pollock: That's all because that would -- that would not be travelling expenses away from home.

That would come under the -- the broader allowance of a deduction for ordinary and necessary business expenses.

Justice Hugo L. Black: Mr. Pollock, is there not a considerable difference in saying that a man's home should be considered a place where he worked permanently all the time and where all of his duties are being in his home as the place of many places but he may have to go from time to time as he was?

That seems to me to be a difference which may not be vital between this and the Flowers case.

Mr. Earl E. Pollock: If I understand you correctly, Mr. Justice Black, you're suggesting the situation where a taxpayer has a primary post of duty and then he may be sent by an employer for a week here or a week there?

Justice Hugo L. Black: That's what -- that was the case here in Flowers case, the primary place of duty.

In fact, he has practised -- the only place of his duty was in Mobile, but he chose to live out of Mobile then sought to say that he could get travelling expenses from his home.

And under those circumstances, they held that the word “home” in that statute did not did apply -- did apply to him while he was in Mobile and not while he was in Jackson.

But here, you have men who lived at one place and he get that job from one point right around and radiate out from time to time, how can you say if that statute in any case has ever held that under those circumstances, maybe it shouldn't that he's at home every time he goes from these places even though he only works half a week or two weeks or three weeks?

Mr. Earl E. Pollock: If I -- if I may, I like to explain why the Commissioner is taking position that in those circumstances, the worker is allowed a deduction in this very case for example --

Justice Hugo L. Black: Well, that's what they held here, as -- as I understand, the facts -- in determining those facts which Flowers said you had to determine, was it not, that these people were not at home in these places where they work and on this temporary construction (Inaudible) was that not determined as a fact by the Tax Court?

Mr. Earl E. Pollock: The Tax Court applied this special rule or exception however it -- it should be classified that where a man who has a series of employers and has a job at a particular post of duty and that is his only post of duty that that post of duty, if it is really obviously temporary, that is it is foreseen to be for short duration and it is short in fact and at those circumstances, the post of duty will -- will not be regarded as the home and the taxpayer will be treated as if he were away from home.

The whole effort is to ameliorate the impact of that -- the general requirements of this statute would have on construction workers.

But as I say, these construction workers are not content with that and they take the position that regardless of the length of time in which they're -- in which they are engaged in a construction job that they are entitled to deduct all of their living expenses.

Justice Hugo L. Black: They don't have to take that position to do it here.

Why isn't it enough or is it enough or if it's not like -- if it's not enough, the Tax Court looking at it and seeing at the variety of job to which they had to go from their real headquarters which is at their home and where their union is that the Tax Court has held as a matter of fact that you would not treat the -- the job as their home if you would consider their home back where they want from.

Have they not held that in this case and who --

Mr. Earl E. Pollock: They --

Justice Hugo L. Black: (Voice Overlap) to decide the length of time that should bring in the exception to the general rule on which you had noted than the Tax Court as a matter of fact?

Mr. Earl E. Pollock: I think that on the general principle applied that is that makes a taxpayer should -- such -- a taxpayer involved here should be allowed to deduct his living expenses while he is on a short term job.

Justice Hugo L. Black: All right.

Then what (Voice Overlap) --

Mr. Earl E. Pollock: There's no dispute about that.

Justice Hugo L. Black: -- wrong.

Mr. Earl E. Pollock: Only the taxpayers dispute that.

In fact they're saying there's no basis in the statute where the -- a tax court or -- and for the Commissioner to allow --

Justice Hugo L. Black: Well, do they have -- do they have to do that here?

Mr. Earl E. Pollock: Then -- then we --

Justice Hugo L. Black: Do they have to prove anything like that here?

Mr. Earl E. Pollock: We think they do.

Justice Hugo L. Black: You say that if -- if it's a short time, the difference between a short and a long time, the taxpayer and to have his home considered not at the place where he work but a place where he came from.

Now, the Tax Court here has held then that these times were so short, going through these varieties of cases that as a matter of fact, the home was not where he went to work.

Mr. Earl E. Pollock: In substance, I -- I think that --

Justice Hugo L. Black: Well, now, why?

Mr. Earl E. Pollock: -- that is correct.

Justice Hugo L. Black: Who better to decide that as a question of fact as we said in Flowers in the Tax Court?

Mr. Earl E. Pollock: I think if the Dobson rule was still in effect, the fact that the Tax Court's decision must be regarded as virtually binding on this kind of question perhaps the -- probably the Government would not have taken an appeal in this case.

Justice Hugo L. Black: The Dobson case didn't report the rule.

That -- there were cases in which the matter of fact would be accepted.

Mr. Earl E. Pollock: That's right.

But in this case, the Government was of the view, and I must point out that the Commissioner's determination in these circumstances is presumed to be correct that the Commissioner and the Department of Justice were of the view that there was no evidence in this record to support the determination of the Tax Court under established criteria.

Let me point out for example, Mr. Peurifoy here who is -- who is a bachelor, he has no family but has a beach cottage in -- near Wellington, North Carolina was at this particular point for 20 and a half months.

There has never been any decision under this statute which has ever expanded this conception of temporary employment to include that term.

In addition, the record does not even show how long this construction job took.

This record is completely consistent with a hypothesis that this construction job took five years and that these taxpayers could have stayed there for five years.

Justice Hugo L. Black: They didn't, did they?

Mr. Earl E. Pollock: They didn't.

In fact --

Justice Hugo L. Black: Why did -- where did he go when he got through?

He has to go back to some place to live, doesn't he --

Mr. Earl E. Pollock: He may have --

Justice Hugo L. Black: -- or he may have stayed then.

Mr. Earl E. Pollock: He took another construction job which perhaps -- but he --

Justice Hugo L. Black: Where was it?

Some distance away?

Mr. Earl E. Pollock: No, it wasn't -- I don't think it was more than 100 or 200 miles away.

He worked pretty much within this approximate area.

Justice Hugo L. Black: But this distance between the place where he worked on the construction job and the cottage he had taking him as an example, was too far for him to go backwards and forwards everyday, wasn't it?

Mr. Earl E. Pollock: That's right.

Justice Hugo L. Black: And he had to arrange so knowing that was temporary in a sense not permanent like the railroad job there, he had to have some place where he could go back to when he left.

Mr. Earl E. Pollock: We think that when -- when the travelling expense deduction has expanded to cover that kind of term of employment particularly where -- where the taxpayers failed to make any kind of showing that there was an unavailability of employment at Kinston and in fact, where the record shows that two of these taxpayers simply left for personal reasons stipulated.

One in fact walked off the job.

Justice Hugo L. Black: What you are doing now is challenging the finding a fact.

Mr. Earl E. Pollock: That's right.

And was --

Justice Hugo L. Black: That's what the whole case (Voice Overlap) --

Mr. Earl E. Pollock: -- and was on that basis that the Government took an appeal under the provision enacted by Congress stating that decisions of the Tax Court shall be reviewed in precisely the same manner as decisions of district courts.

Justice Hugo L. Black: Some of the other people here were married, were they not?

Mr. Earl E. Pollock: Yes, two (Voice Overlap) --

Justice Hugo L. Black: And didn't seem it to a long (Voice Overlap) --

Mr. Earl E. Pollock: They left for personal reasons and so far as -- as the record shows, they could have stayed three or four years.

Justice Hugo L. Black: Well, that gets down to a question of whether the Tax Court was wrong in failing to find that they left for personal reasons rather than to -- because it was necessary.

Mr. Earl E. Pollock: Well, that's factual question.

We don't believe that there's any occasion by this Court to reexamine the determination made by the Court of Appeals that the Tax Court's decision was clearly erroneous.

Only this last term, this Court reaffirmed the rule that where -- the Court of Appeals has made a fair assessment of the record, it would not reexamine the evidence in order to overrule the tax -- the determination made by the Court of Appeals.

Justice Hugo L. Black: And I understand -- maybe I'm wrong.

Mr. Earl E. Pollock: In --

Justice Hugo L. Black: I -- I just want to get squarely because I agree with the Flowers decision and I want to get squarely in my mind what this case is and what that one was.

As I understand this, however, the Government wanted this case for the Tax Court on the theory that they could say as a matter of law that these things were -- in some of these instances was too long for them to reach a conclusion as a matter of fact that their home was back where the -- their families were.

Mr. Earl E. Pollock: We -- the Government lost the case in the Tax Court yet in the -- with respect to the application of this temporary versus indefinite rule the Government argued that this length of time and on the showing made by the taxpayers that on --on these circumstances, this exception of the special rule was not available to these taxpayers because they hadn't brought themselves within it.

Now, the Tax Court disagreed and in this decision went, as I say, further than any other decisions under this statute.

The Government appealed to the Court of Appeals and I say it's a rare case when the Government takes an appeal on a strictly factual question, the Government did so here on the ground that there was no evidence to support this decision by the Tax Court.

The Court of Appeals unanimously agreed and petitioners then file their petition here.

Justice Felix Frankfurter: Are you really saying that the question before us is not at all a question of construing the tax statute but the question before us is whether we can say the Court of Appeals was so obviously wrong in interpreting what the findings of fact were in finding that they were not supported by the evidence that this Court to keep the (Inaudible).

Mr. Earl E. Pollock: That is precisely --

Justice Felix Frankfurter: That's really the question (Voice Overlap) --

Mr. Earl E. Pollock: Precisely, yes.

Precisely.

Justice John M. Harlan: That's the only question, isn't it, if you accept -- want to accept your premises to what the meaning of home and the clause, the exception clause worked by the temporary (Voice Overlap) --

Mr. Earl E. Pollock: That -- that is --

Justice John M. Harlan: -- a pure question of fact, is it not?

Mr. Earl E. Pollock: That's precisely correct.

Justice Hugo L. Black: But when you go back a little step further, there's another question of fact, isn't it, whether this is clearly erroneous depends on whether the Court of Appeals had a right to take facts decided by the Tax Court and say that as a matter of law, looking at it, there was no just plausible support their decision was arbitrary and unreasonable?

Mr. Earl E. Pollock: In other words, I -- I understand your question to be whether or not this Court should determine whether or not the Court of Appeals made what might be called a fair assessment of the record.

Oh, I -- certainly that -- that question is open but in this case, we don't believe that there can be too much doubt about that particularly in view of the revolutionary nature of the decision in view of the twenty and a half months period which -- which Peurifoy spent on the job, in view of the fact that the other two taxpayers left for personal reasons not the exogenesis of the business but for personal reasons, and the taxpayers did not even bother to get into the record how long this construction job is.

As I said before, this record is completely consistent with the hypothesis that -- and the taxpayers have the burden of proof on it, it is completely consistent with hypothesis that this construction job take five years and that they could have worked there all that time.

Well --

Justice Hugo L. Black: Is that the basis on which the Court of Appeals decided?

Did they say that, anything like that?

Mr. Earl E. Pollock: I think so, Your Honor.

The Court of Appeals made a very careful examination of the -- of the evidence.

Justice William O. Douglas: Has there been much litigation in this matter since Flowers?

Mr. Earl E. Pollock: There --

Justice William O. Douglas: Are there many cases depending upon this decision?

Mr. Earl E. Pollock: I -- I think that there would be many cases if the taxpayers' sweeping contention were accepted that they are entitled to deduct their living expenses no matter how long they stay on -- on a construction job.

For example, there -- at the Oak Ridge Atomic Energy construction project, which took 4 years to build, I understand at one point, there were 45,000 workers at -- on that construction project.

There was a construction job at Portsmouth, Ohio, it also took 4 years.

According to these taxpayers, they would be entitled to deduct all of their cost of their meals and lodging if that contention was accepted.

I wonder if I could illustrate one reason why we think that this temporary employment exception has to be kept within reasonable bounds.

This deducts -- deduction cannot be viewed solely in terms to these particular taxpayers.

The deduction has to be viewed in terms of all taxpayers so as to avoid what would amount to an undue discrimination against other taxpayers with very similar situations.

Justice John M. Harlan: So as the lawyers as well as workers, doesn't it?

Mr. Earl E. Pollock: [Attempt to Laughter]

Justice Charles E. Whittaker: I was into that, going to the lawyers as well as the workers.

Mr. Earl E. Pollock: I think -- I think so.

I think (Inaudible).[Attempt to Laughter]

Justice John M. Harlan: Construction workers.

Mr. Earl E. Pollock: I hope that Mr. Dixon will be allowed to deduct his travel expenses while (Inaudible).

Justice Felix Frankfurter: Are we -- is it -- is it bad to say that the issue before the Court as an issue of law is the acceptance or rejection of the distinction between temporary (Voice Overlap) --

Mr. Earl E. Pollock: No.

Justice Felix Frankfurter: -- on this evidence no matter (Inaudible) the facts, what facts be it in one or the other tax evasion.

Now, that is -- that would be a question of law from any (Inaudible) can be made but as I understand that that is not an issue before us.

What is in issue before us is the determination of a specific set of facts on which the Tax Court made one determination and the Court of Appeals another and we're not to ask that the Court of Appeals is clearly erroneous in finding that the Tax Court was clearly erroneous, is that right?

Mr. Earl E. Pollock: That's right.

That's right.

Let's take Mr. Peurifoy who as I have said, he lives near Wilmington in a beach cottage which he apparently built himself.

He's a bachelor, he has no family there.

He went to Kinston in the hope of obtaining employment and did obtain employment there.

Let's assume that in the same car, with Mr. Peurifoy goes three factory workers.

We'll call them A, B and C.

Let's say that factory worker A has his home in Wilmington and he works at Kinston during the week and like Peurifoy returns to Wilmington on the weekend.

Even if this factory worker was to be laid off in a matter of six months, he'd receive no deduction at all for his transportation or for his living expenses.

This is essentially the factual situation involved in the O'Toole case, a Second Circuit decision in which Mr. Justice Stewart participated.

Let's take factory worker B, he, like Peurifoy, has no job yet but like Peurifoy, he's going there seeking to get a job and let's assume that he's laid off in this Kinston factory in two months, certainly, a very temporary period of time, but again he is allowed no deduction for his travel expenses either for transportation or for his meals and lodging.

The same thing is true even as to taxpayer C who has a job lined up at Kinston.

But again when he goes to take this job, he is not allowed any deduction whatsoever no matter how long he stays in Kinston.

And let's take the example further, Mr. Peurifoy is a welder.

Let's assume that he is assigned to work next to three other welders doing precisely the same kind of work.

Let's assume they have all their meals together.

They work side by side, we'll make them welders X, Y and Z.

X lives in Kinston near the site of this construction job.

He's allowed no deduction at all for transportation expenses, for meals or lodging.

Take welder Y, here, we have a true transient construction worker, a man who lives in a trailer and goes from construction job to construction job because he doesn't maintain a house somewhere like Mr. Peurifoy even though he has his entire family with him, he's allowed no deduction at all for transportation or for any of his living expenses.

Justice Felix Frankfurter: Is the (Inaudible) that you hypothesized a unique situation in this country today?

Mr. Earl E. Pollock: Not at all.

Justice Felix Frankfurter: It's a very common one, isn't it?

Mr. Earl E. Pollock: Increasingly, we're becoming a nation of city hoppers in that sense.

The same thing is true of welder Z who, we'll say, also lives out of town at the Greenville, about 50 miles away, unlike Mr. Peurifoy, this man drives-in in the morning and drives back at night.

He also lives out of town but he's not allowed any deductions at all for his meals or for his lodging on the ground that he is commuting and that is well established not in the statute itself but under an interpretation of the statute that commuters are not entitled to deduct any of these expenses.

Now, I'm not citing these examples to -- for the purpose of arguing that construction workers should not be allowed a deduction where they have truly temporary employment but I am citing these examples in an effort to show that this exception or this special rule must be kept within reasonable bounds so as to prevent undue discrimination against other workers, other lawyers as well, and in fact, other categories of construction workers.

Justice John M. Harlan: I take it, that you -- the Commissioner does not allow deductions (Inaudible)

Mr. Earl E. Pollock: In a situation where an employee has a succession of employers and goes from one job to another, the Commissioner does not take the position that it must be in -- at the order or at the requirement of the employer.

Of course, the expenses must be intimately related to the taxpayers or the employers' trade or business.

Justice John M. Harlan: Even in -- in the case of temporary employment, it would (Inaudible) as the employee and the taxpayers (Inaudible) of a plumber or a welder or whatever.

Mr. Earl E. Pollock: That's right.

In this -- in this situation, the Commissioner takes the position that these expenses for the purposes of this exception are pursuant to the trade or business and does not oppose the grant of the deduction on that ground and in fact, the Commissioner has acquiesced in this temporary employment rule which was developed by the Tax Court even prior to the Flowers decision.

Justice John M. Harlan: (Inaudible)

Mr. Earl E. Pollock: I think that there may -- there may be a dictum to that effect but the -- the gist of the Court's decision, we think, is on record page 38 where the Court stated, “If we assume the validity of this exception to the rule of the Flowers case as applied to one not self-employed, it is essential that employment be temporary in contemplation and not indeterminate fact as developed and of course, then proceed to find that on this evidence, it cannot be said that the record supports it.

We think that's the -- the basic holding.

As to Mr. Dixon's suggestion that the element of choice is the fundamental question in this kind of a case, I'd like to point out that there is nothing in the Tax Court's decision and there is nothing in the record to show that these taxpayers went to Kinston because they are unable to obtain employment elsewhere.

So far as this record is concerned, they went there because they thought this was the best opportunity for them in view of all the circumstances.

And at the same time, I don't think it should be assumed that commuters necessarily have any great choice in fixing their residence.

There may be innumerable factors which motivate a commuter to live in one city and to work in another.

It may be the situation of the school, location of a particular position, innumerable non-business factors.

Justice Felix Frankfurter: My question is like -- that open before the Tax Court?

I should think that -- that would really open a door to inquire me to in awfully not only difficult for them to pass on but for the Court of Appeals to review and eventually hear.

Mr. Earl E. Pollock: That's right.

We -- we don't believe that --

Justice Felix Frankfurter: There's a greater possibility of that.

Mr. Earl E. Pollock: We don't believe that it's the Commissioner's business to inquire into these private personal matters.

And in -- in our view, the -- the term “personal” as used within Section 24 simply refers to non-business expenses and has nothing to do with the reasonableness of moving -- moving one family.

For example, here, during the war in Washington, many, many people including lawyers came to Washington for the duration for temporary employment and this is all for patriotic reasons.

It maybe that because of the -- the housing facilities or for other reasons, they could not bring their families with them yet one court after another has repeatedly held that in those circumstances, living expenses on the part of the lawyer or the worker here in Washington would not be allowed under this travel expense provision.

There are numerous other examples of taxpayers who have non-permanent employment and who would not qualify under ordinary test for any deduction.

For example, a business may send a man to Paris for two years to work at that office.

Certainly if -- if -- conceivably, maybe unreasonable for that taxpayer to move his family there, he may maintain his residence in a -- in a particular State back home but nevertheless, this man's expenses while in Paris or abroad even though he's there for a short period but his two years is not allowed as a deduction under this travel expense provision.

Justice John M. Harlan: Could I go back to the question that Justice Stewart asked you to make sure that I understand your -- your answer?

Do you mean that in the case of temporary employment, the third test of the Flowers case to wit, that the employment must be -- be travel or must be in pursuance of the employer's business is not applicable?

Mr. Earl E. Pollock: Yes, the Commissioner takes that view.

Justice John M. Harlan: Do you -- do you recognize it?

You --

Mr. Earl E. Pollock: That's right.

Justice John M. Harlan: -- you take that position as more than you conceded in your brief and I'm just interested.

Mr. Earl E. Pollock: We think that in those -- although the Flowers case suggest that it must always be in the pursuit of the employer's business that we -- we think that the Court was their dealing with a -- a lawyer who has indefinite employment not for a short period of time.

And in the circumstances such as we has -- many construction workers have and they go from one job to another, the Commissioner takes the view that it would not be reasonable under the statute to say that those expenses were not incurred in pursuit of trade or business --

Justice John M. Harlan: But your --

Mr. Earl E. Pollock: -- because if the employer has something there, if they have been employed before they went to the construction job presumably, they -- they may very well haven't been deducted.

Justice John M. Harlan: The sweep of that concession, if we choose to call it that, their point of view is not limited to construction workers.

It goes across the board for any temporary employment where the -- the employment is found to be temporary.

Mr. Earl E. Pollock: Yes, and there are other examples.

For example, the educational expense regulations do not necessarily require that the expenditure be required by the employer.

So in some of these situations, the Commissioner has taken the position that it would not be reasonable to require that the taxpayer show that the expenditure was at the command or at the requirement of the employer even though Flowers seems to say that, has applied to that situation.

Justice John M. Harlan: That would mean in this case that if the Court should disagree with you, I'm not suggesting myself (Inaudible) would disagree with the view that home means principle place of employment, then the decision should be reversed.

Mr. Earl E. Pollock: That the decision should be --

Justice John M. Harlan: Should be -- should be -- should be reversed.

Mr. Earl E. Pollock: Reversed.

Justice John M. Harlan: The -- your point should win.

In other words, if home means actual home and not home of the principle place of employment, then it would seem to me in view of your concession in these temporary employment cases, the third requirement of Flowers to wit that the -- that the travel has to be pursuant to the employer's business.

That, being out of the case, it would seem to me, that it would fall on that premise that the taxpayer ought to win here.

Mr. Earl E. Pollock: I don't think so, Your Honor --

Justice John M. Harlan: Well --

Mr. Earl E. Pollock: -- for the reason that the statute requires these expenses should be incurred while traveling and the Court would still have to determine that when a man is on a construction job for, say -- at a particular place for 20 and a half months or two years or three years, that he is engaged in traveling at that time.

In addition, there maybe -- the additional question of whether a -- there isn't a shifting of the home after a man stayed on a job for particular period of time.

Justice John M. Harlan: That isn't appellee (Inaudible)

Mr. Earl E. Pollock: That's right.

Now, by temporary, we do not mean nonpermanent.

The fact [Attempt to Laughter] is not conceived of impermanent or impermanent job.

The only question is the substantiality of the duration of the job and the foreseeability of the shortness of duration.

Justice John M. Harlan: (Inaudible)

Mr. Earl E. Pollock: That's right.

Justice John M. Harlan: (Inaudible)

Mr. Earl E. Pollock: It was --

Justice John M. Harlan: (Inaudible)

Mr. Earl E. Pollock: That's right.

And -- it did develop by the Tax Court with the Commissioner's acquiescence.

In conclusion, we would only repeat that we don't think it can be said that on this record, the Court of Appeals did not make a fair assessment of the record and on that basis, we believe that the decision below should be affirmed.

Chief Justice Earl Warren: Mr. Dixon.

Rebuttal of Daniel R. Dixon

Mr. Daniel R. Dixon: Mr. Chief Justice, if it please the Court.

The first thing that I want to offer vigorous dispute with is the position, the asserted position that we -- we take the position that regardless of how long the work last and how many are entitled to the deduction.

That is not our position.

What we do say is this, that irrespective of the length of the employment that that is a fact we should be taking into consideration in evaluating the necessity of the travel.

And further, that if the -- if the employment has met the requirements of being ordinary and necessary required by the exigencies of the trade or business that the duration alone should not deprive our taxpayers of this deduction in the absence of some extraordinary factors.

The point is that our people are trying to maintain stabilized homes just like everyone else.

They have to incur the double expense which is the heart of the matter and the expense would not be incurred.

Likely, it is -- it is an automatic deterrent and the tax benefit does not put in back in pocket, it only reduces the burden he -- he's having anyway.

Chief Justice Earl Warren: Mr. Dixon, suppose at the end of this 20 and a half months, Mr. Peurifoy left his employment (Inaudible) and concluding that there was no work at his home, he took another job of similar character in the -- in the same community, would he still be entitled to his expenses?

Mr. Daniel R. Dixon: You mean in the same community where he just finished his employment?

Chief Justice Earl Warren: Yes.

Mr. Daniel R. Dixon: I don't think so under those circumstances, Your Honor, for the reason that at that point, the question of him -- of it being reasonable for him to say that he should maintain his home where he originally came from would -- would change the complexion of the thing.

Chief Justice Earl Warren: Suppose -- suppose he went back to his home and his union then sent him to another part of the country and where he would be employed on a construction job, say, for another two years, would he be entitled with that?

Mr. Daniel R. Dixon: I think that under our factual circumstances, he would, Your Honor, because I think that there, the uncertainties of this employment, when you use our hypothesis two years, this is looking at it at the back end, but this construction work can be brought to a sudden termination by any one of the multitude of factors.

They take a job.

They may be there a week, they may be there several weeks or in -- on a few jobs that run into a year.

Under those circumstances, it's not reasonable to expect our people to keep moving their homes around and force them to become transient.

And they're talking about quitting the work as being a matter of personal choice.

But all -- all people quit their work as a matter of personal choice, but that's not the question.

The question is whether it's reasonable and necessary at the beginning of the employment for them to undertake this travel.

And further, referring to these suppositions about working beside one man who has a home in Kinston and -- excuse me, yes, a man who has a home in Kinston is not entitled to the deduction and our petitioners who live in Wilmington are entitled to it.

But that's the identical situation the statute created deduction for because in one case, the man has two homes and another case, he only has one.

And this is the very purpose of the statute.

Chief Justice Earl Warren: Well, what I --

Justice Hugo L. Black: Do --

Chief Justice Earl Warren: Oh, pardon me.

Justice Hugo L. Black: Go ahead.

Chief Justice Earl Warren: What I -- what I'd like to know is this, where would you draw the line on how long the man could stay away when he has successive employers and he has a summer home such as this bachelor had --

Mr. Daniel R. Dixon: No, this -- excuse me.

Chief Justice Earl Warren: -- and --

Mr. Daniel R. Dixon: This is a permanent home.

Chief Justice Earl Warren: Well, let's -- let's say then a permanent home and he -- he continues to takes job away from his -- from his home.

How many times could he do that and how long could it --

Mr. Daniel R. Dixon: I think that this would have to be an individual determination, Your Honor.

I don't think you can answer in -- in abstract.

Chief Justice Earl Warren: And would the Court have -- Tax Court have to determine whether there was employment open to him in this -- in the community where he lived or could he just do that by pre-choice, say, “Well, I don't -- I don't want any job for my home.

I want to go to Ohio or West Virginia or some other place”?

Mr. Daniel R. Dixon: Well, I think -- I think if that fact were -- were developed, I think that it would certainly destroy the ordinary and necessary character of this travel.

Chief Justice Earl Warren: Yes, but must --

Mr. Daniel R. Dixon: The way --

Chief Justice Earl Warren: -- must the Commissioner in -- in the case of every employer who -- who claims such as an exempt could go into all those matters or they could get employment at home or not?

Or does the man --

Mr. Daniel R. Dixon: I think --

Chief Justice Earl Warren: (Voice Overlap) --

Mr. Daniel R. Dixon: -- Your Honor, I think he has to carry the burden that the statute imposed --

Chief Justice Earl Warren: I see.

Mr. Daniel R. Dixon: -- or vested.

The -- the statute says there must be three requirements in this Court and said they must be factual.

And I think that in every case, that's true and -- yes.

Justice Hugo L. Black: What is the population of Kinston?

Mr. Daniel R. Dixon: I really don't know, Your Honor.

I think -- I -- I would be afraid to say.

Justice Hugo L. Black: What kind of construction work were they doing there?

Mr. Daniel R. Dixon: They were building the DuPont plant there, sir.

DuPont plant, I don't know just what they were making.

Justice Hugo L. Black: And where was this man living you say that his home was permanent, and probably referred to him as a bachelor?

Where was he --

Mr. Daniel R. Dixon: He was living just out of Wilmington, North Carolina and the brief shows the exact distance, I think it was some hundred miles away from his home.

Justice Hugo L. Black: And what's the population of Wilmington?

Mr. Daniel R. Dixon: Well, Wilmington, I think I could have that that's probably around 35,000 or 40,000 in Kinston.

I think would much smaller community.

Justice Hugo L. Black: What was this man's particular construction skill?

Mr. Daniel R. Dixon: He was either the pipe fitter or welder.

I forget which is which.

Justice Hugo L. Black: Your -- your assumption is, as I gather it is that he's not like man who lived in the city like New York where it's a very small place or concentration of the construction --

Mr. Daniel R. Dixon: That's right.

Justice Hugo L. Black: -- but the man to get a job anywhere in that vicinity had to go around for (Voice Overlap) --

Mr. Daniel R. Dixon: They have to take what's available, Your Honor.

And this is a customary practise in the trade.

Justice Hugo L. Black: You're -- you're urging that they should, under those circumstances be treated as though they had their home or where they were rather than temporary places of their job.

Mr. Daniel R. Dixon: That's right.

Justice Hugo L. Black: What do you -- what do you say about the 20 and a half months though when a man stayed there that long and what do you say to his argument that you failed to prove that -- that you didn't leave for personal reason rather than the other.

Mr. Daniel R. Dixon: Well, Your Honor, the fact that the -- the established (Inaudible) of the man's employment shows that he did, when he got to the job he went back home.

He picked up another one and showed in his itinerary employment right near his home.

Justice Hugo L. Black: But he (Voice Overlap) --

Mr. Daniel R. Dixon: He went right back.

Justice Hugo L. Black: I understand that the statement is that record is parallel to evidence to show that he didn't do that just because he wanted to not because it's necessary to (Voice Overlap) --

Mr. Daniel R. Dixon: Well, I think the fact speaks for itself, Your Honor.

He went back, that shows his intent, he went back.

Obviously, he intended to go back.

He went back right to the same unit and got a new record.

Justice Hugo L. Black: Why did he leave his job though at DuPont?

Mr. Daniel R. Dixon: Well, I don't know in that particular one but I -- I assume that the job has ended or he quit, but he could have terminated this for -- for -- I mean that could have terminated his employment either way.

Justice Felix Frankfurter: Mr. Dixon, in answer to the Chief Justice's hypothetical case, you said that that would be a determination in each specific case, isn't that correct?

Mr. Daniel R. Dixon: I think, yes.

Justice Felix Frankfurter: Now, Congress has allowed mandatory appellate review of what the Tax Court did at the Court of Appeals.

It meant that the Government or the taxpayers as a matter of right to go to a Court of Appeals and have that Court review what the tax Court did.

The Congress did just the opposite so far as this Court is concerned.

It didn't mean the case is to come here and have us review what the Court of Appeals review what the Tax Court did.

Mr. Daniel R. Dixon: Yes, Your Honor.

Justice Felix Frankfurter: And therefore it doesn't take all the difference in the world that we are sitting here to decide whether the Court of Appeals was right in its appraisal of what the Tax Court did.

This Court wasn't -- isn't -- wasn't meant for that purpose.

Mr. Daniel R. Dixon: Well, Your Honor, I think -- I think that you -- that you are quite right, but I say this.

The Court of Appeals made no review of the facts and to the personal nature of this work.

They sustained -- they -- they overrule as -- now on the basis of the determination of the facts but on a theory that home is where you work.

Justice Felix Frankfurter: They -- they did (Voice Overlap) --

Mr. Daniel R. Dixon: They allege -- they allege by their own words.

They determine that the -- that there was no evidence have of indefinite --

Justice Felix Frankfurter: Well, that's --

Mr. Daniel R. Dixon: -- to give facts on the point of law.

Justice Felix Frankfurter: But where the Court says there's no evidence on the part of the tribunal that has the determination of finding whether this is evidence, the Congress of United States didn't mean this Court ought to consider whether the appellate court had any basis for saying there was no evidence.

We said in the Universal --

Mr. Daniel R. Dixon: Well --

Justice Felix Frankfurter: -- Camera case that this Court ought not to do that.

Mr. Daniel R. Dixon: Well, Your Honor, I - I can't speak [Attempt to Laughter] -- I -- I can't say anything there.

What the Court wishes to do, of course, is in its own domain.

I have to keep silent on that point.

Justice Felix Frankfurter: I have admiration to what you squeeze out of this case as -- if I may say so.

Mr. Daniel R. Dixon: Well, I won't comment on that point either.

My time is up Your Honor.[Laughter]