Robert Rosenspan v. United States
27 A.F.T.R.2d (RIA) 707, 1971 U.S. App. LEXIS 11774, 438 F.2d 905 (1971)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Under I.R.C. § 162(a)(2), a taxpayer must have a permanent home or abode in a real and substantial sense to be considered 'away from home,' and therefore cannot deduct traveling expenses if they are an itinerant with no fixed residence.
Facts:
- Robert Rosenspan was a traveling jewelry salesman who worked on commission for New York City-based manufacturers.
- He spent approximately 300 days per year traveling by car through an extensive sales territory in the Midwest, staying in hotels and motels.
- After his wife's death in 1948, Rosenspan abandoned his family home and did not maintain a permanent residence of his own.
- He used his brother's home in Brooklyn, New York as a personal mailing address for voter and tax registration, and he kept some belongings there.
- When he returned to New York City for business 5-6 times a year, he more often stayed at a commercial inn than at his brother's home.
- Rosenspan registered his car in Ohio using a cousin's address to obtain cheaper insurance rates.
- Rosenspan did not contend that he had a permanent abode or residence anywhere.
Procedural Posture:
- The Commissioner of Internal Revenue disallowed Robert Rosenspan's deductions for meals and lodging for tax years 1962 and 1964.
- Rosenspan paid the resulting taxes.
- Rosenspan brought an action for a refund in the United States District Court for the Eastern District of New York (a federal trial court).
- The District Court dismissed the action on the merits, ruling in favor of the government.
- Rosenspan, as the appellant, appealed the dismissal to the United States Court of Appeals for the Second Circuit.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a traveling salesman who lacks a permanent residence have a 'home' to be 'away from' for purposes of deducting travel, meal, and lodging expenses under I.R.C. § 162(a)(2)?
Opinions:
Majority - Friendly
No. A traveling salesman without a permanent residence does not have a 'home' to be 'away from' and thus cannot deduct traveling expenses under I.R.C. § 162(a)(2). The court reasoned that the word 'home' in the statute should be given its ordinary meaning as a permanent abode, not the fictional meaning of 'business headquarters.' The purpose of the deduction is to alleviate the financial burden on taxpayers who incur duplicate living expenses by maintaining a permanent residence while simultaneously paying for lodging on business trips. Because Rosenspan had no permanent residence to maintain, he did not have these duplicate expenses. The court held that one cannot be 'away from home' unless one has a home to be away from in the first place, thus failing the second condition established in C.I.R. v. Flowers.
Analysis:
This decision solidifies the principle that the 'away from home' travel expense deduction is unavailable to itinerant taxpayers who lack a permanent residence. The court rejected the long-standing IRS position that 'home' means 'principal place of business' (or 'tax home') in this context, opting for a literal interpretation of the statute. This case establishes that the deduction is premised on the duplication of living expenses, thereby clarifying the underlying policy of § 162(a)(2). It creates a clear line for taxpayers who are constantly on the road: without a fixed abode to maintain, their travel and lodging costs are considered personal living expenses, not deductible business expenses.
