TAXATION-INCOME TAX-DEDUCTIONS FOR EXPENSES OF ARMY OFFICER

Respondent, having had experience as an executive of a large machine tool distributing company, went to Washington, D.C. in 1942 at the request of the Ordnance Department of the United States Army to assist in the efficient distribution of machine tools, serving in a civilian capacity without compensation. During the year, he was commissioned in the army, attaining the rank of Lieutenant Colonel, and was assigned to the Army & Navy Munitions Board as Ordnance Officer, in which capacity he had to keep in contact with manufacturers of production equipment as well as with various government agencies. In his income tax returns for 1942 and 1943, respondent claimed deductions as an army officer for expenses in operating a private automobile used in the discharge of his duties, entertainment expenses, traveling expenses in excess of the per diem allowance and for the cost of a military dress uniform. Upon review following disallowance of the deductions by the Commissioner of Internal Revenue, the Tax Court reversed, except as to the uniform, on the ground they were ordinary and necessary trade or business expenses under the authority of I.R.C. §23(a)(1). On appeal to the circuit court of appeals, held, the decision of the Tax Court reversed. An army officer, like any other government employee, is not carrying on a trade or business such as to qualify within the meaning of 23(a)(1), this being limited to persons engaged in private enterprise, and, therefore, such officer cannot deduct expenditures in excess of the amount allowed by the government. Furthermore, the expenses were not ordinary and necessary since it is not the normal practice to incur such expenses in conducting government business. Commissioner v. Match, (6th Cir. 1950) 180 F. (2d) 859