Peurifoy v. Commissioner of Internal Revenue

RESPONDENT: Commissioner of Internal Revenue
LOCATION: U.S. District Court Southern District of California

DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Fourth Circuit

CITATION: 358 US 59 (1958)
ARGUED: Oct 16, 1958 / Oct 20, 1958
DECIDED: Nov 10, 1958

Facts of the case


Media for Peurifoy v. Commissioner of Internal Revenue

Audio Transcription for Oral Argument - October 16, 1958 in Peurifoy v. Commissioner of Internal Revenue

Audio Transcription for Oral Argument - October 20, 1958 in Peurifoy v. Commissioner of Internal Revenue

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.

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 --

Well, the concepts blend together in some extent, don't they?

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.