Appeal from a decision of the United States Tax Court (en banc), Raum, J., which denied appellant a deduction taken under I.R.C. § 162. Affirmed. Meskill, C.J., dissents.
Meskill and Cardamone, Circuit Judges, and Holden,*fn* District Judge. Meskill, Circuit Judge (dissenting).
CARDAMONE, Circuit Judge:
The appellant, Dennis McCabe, a police officer employed by the City of New York, was required to carry his service revolver at all times while in the City. To reach his place of employment the most direct route from his home in Suffern, New York is through the State of New Jersey. New Jersey will allow a officer such as petitioner to carry a weapon only by permit. Stating that he could not expect to obtain a New Jersey permit, appellant carried his service revolver on his person and used his own automobile as his mode of transportation to and from work. As a result he claimed an employee business deduction in the amount of $2,950 for automobile expense on his 1976 tax return. The Commissioner of Internal Revenue, appellee, disallowed the claimed deduction and the Tax Court affirmed that determination. Appellant appeals from that decision. We affirm for the reasons which follow.
The facts of this case were stipulated and may be briefly stated. At the time he filed his petition in 1976 appellant resided in Suffern, New York. Suffern, a relatively remote suburb of New York City, lies west of the Hudson River and immediately adjacent to the State of New Jersey. Appellant was employed as a New York City police officer assigned exclusively to Manhattan's Twenty-Eighth Precinct. The regulations of the New York City Police Department then in effect required police officers to be armed at all times when in the City, unless otherwise directed.*fn1 The State of New Jersey, through which petitioner would travel were he to commute to work by the most direct route, permits officers employed by governmental agencies outside the State to carry weapons in New Jersey only while engaged in official duties and upon prior notification to local police authorities. See N.J. Stat. Ann. § 2A: 151-43(s) (West 1969) (repealed 1979) (Current version at N.J. Stat. Ann. § 2C: 39-6(b) (1) (West 1980). New York City police officers carrying a service revolver through New Jersey either by public or private conveyance would be in violation of New Jersey law without a New Jersey gun permit. Generally, New Jersey authorities issue gun permits only to those persons whose job requirements necessitate that they be armed in New Jersey or to persons able to establish urgent need.*fn2
Throughout 1976 appellant used his personal automobile as his exclusive means of commuting to and from his duty station at the Twenty-Eighth Precinct. While commuting he carried his service revolver on his person and did not modify his automobile to accommodate the gun. Therefore, the cost of operating the vehicle by carrying a revolver was the same as it would have been had he commuted to his job by automobile without the revolver. But the record clearly establishes that appellant's commuting costs could have been reduced had he been able to travel through New Jersey.*fn3 The record further shows that ample public transportation existed from Suffern to New York City.*fn4 Since much of the convenient public transportation went through New Jersey, appellant would have again been faced with the need for a New Jersey gun permit.
On his 1976 income tax return appellant claimed $2,950*fn5 in automobile expenses as a deduction on Form 2106, Employee Business Expenses. This deduction represented the commuting costs of driving 17,600 miles between Suffern and New York City, which included bridge and thruway tolls. The Commissioner of Internal Revenue disallowed the entire deduction and the Tax Court affirmed.
At issue before us is when the ordinary and necessary business deduction embodied in Internal Revenue Code (I.R.C.) section 162(a) (1976)*fn6 may properly be claimed. We first analyze this issue to determine whether it is one of fact or law. In Commissioner v. Heininger, 320 U.S. 467, 88 L. Ed. 171, 64 S. Ct. 249 (1943), the Supreme Court stated that "whether an expenditure is directly related to a business and whether it is ordinary and necessary are doubtless pure questions of fact in most instances. Except where a question of law is unmistakably involved a decision of the Board of Tax Appeals [presently the United States Tax Court] on these issues . . . should not be reversed by the federal appellate courts." Id. at 475 (emphasis supplied) (footnote omitted). See, e.g., Sibla v. Commissioner, 611 F.2d 1260 (9th Cir. 1980); Sheldon v. Commissioner, 299 F.2d 48 (7th Cir. 1962); Chenango Textile Corp. v. Commissioner, 148 F.2d 296 (2d Cir. 1945); Geo. J. Haenn v. Commissioner, 147 F.2d 682 (3d Cir. 1945); see also, Dobson v. Commissioner, 320 U.S. 489, 88 L. Ed. 248, 64 S. Ct. 239 (1943).*fn7
As we recognized in Chenango the determination of whether a question is one of law or one of fact is not always easy. This is particularly true where the lower court cites appellate court opinions to justify its conclusion, since it then becomes difficult to determine whether that court exercised its own independent judgment. In Chenango we resolved this dilemma by placing particular emphasis on the Supreme Court's language in Heininger. "Since there is not a 'question of law . . . unmistakably involved ' we shall assume that the decision was the result of a determination of fact. . . ." Chenango, 148 F.2d at 298.
Here we are asked to rule on the ordinary and necessary business deduction. This is a factual inquiry and one which has been answered by the Tax Court. However, as in Chenango, the lower court relied on appellate court opinions to justify its conclusion. Because it cannot be said that a question of law is not unmistakably involved, we employ the Chenango rule and assume that the Tax Court's decision was the result of a determination of fact. In the context of a question of fact it will be necessary to determine only whether the Tax Court's decision was clearly erroneous, i.e., not adequately supported by the evidence, which will be discussed at II, infra.
Internal Revenue Code section 162 is concerned with expenses incurred as a direct result of engaging in business. For appellant to prevail he must establish that his expense falls within the general provisions of section 162(a)*fn8 -- ordinary and necessary expenses of carrying on a trade or business. We agree with the ...