Dancer v. Commissioner, 73 T.C. 1103, Code §162 (1980)
FACTS:
The petitioner Harold Dance was in the business of training and driving harness horses. He had several locations involved in his business. His uncle’s farm in New Egypt, New Jersey; where he trained the horses, the Freehold Raceway where he raced the horses and his home office at Freehold farm where he handles administrative duties and tended to horses that were there to recuperate. Dancer employed a secretary and someone to tend to the rehabilitating horses at his farm in Freehold, in addition to a blacksmith, grooms and several stable hands at the raining track in New Egypt.
On September 3rd, 1971 at approximately 11:45 a.m. Harold Dancer was during his automobile and …show more content…
United States [1 ustc ¶284], 276 U. S. 145 (1928), dedicating legal fees is only allowed on the basis where the suit or action against the taxpayer are in relation to the business or the proximity of the petitioners business. Additionally, in Anderson v. Commissioner, supra, stands for the proposition that fees from a negligent accident can be ordinary and necessary expense of the business if they are directly or proximately connect with business. In Freedman’s case, he was traveling between his two places of business which were not related and therefore the commute in reference to the accident had no relation with either of the businesses. Secondly, the 50 percent dedication for depreciation on his vehicle which is used both personally and for business was also denied on the basis that he failed to provide proof of expenditures related to trade or …show more content…
In both of the cases, the petitioners were involved in an accident where the severely injured a pedestrian. The issues in the cases were also similar as they both referenced if they could deduct the judgments on their lawsuit as ordinary and necessary business expenses under section 162(a) on their tax returns.
Even with the many similarities, there is a subtle yet important difference to be noted. In the case of Dancer, his commute was deemed to be of a business nature because he was on a commute from the horse training facility in New Egypt to his home office in Freehold where we was going to conduct administrative duties and tend to the horses that were rehabilitating. Therefore, Dancer was allowed to deduct the judgment fees as ordinary and necessary business expense.
In Freedman’s case, he was not on a trip for business purpose rather traveling in between his place of employment as a manager at Zimmerman’s to Bolton where he has a 50 percent partnership in. Being that the two business are separate and Freedman was traveling to business deeming it of a personal nature thus being denied the ability to deduct the expense because the drive to a place of employment is not considered to be related to