United States v. Correll

Background

A traveling salesman from Tennessee routinely left home early, ate breakfast and lunch on the road, and returned for dinner. He claimed those meal costs as business expenses under the tax code, but the IRS disallowed the deductions because his trips required neither sleep nor rest. He sued, a jury and lower courts split on the issue, and the case reached the Supreme Court to resolve a recurring disagreement among federal appeals courts.

Reasoning

The core question was what “away from home” means for deducting meals and lodging. The Court explained that Congress used the phrase together with “meals and lodging,” suggesting lodging (sleep or rest) was intended. It emphasized the long‑standing Treasury practice applying a sleep‑or‑rest rule and said such long‑continued administrative interpretations carry weight. The Court said its role is limited to ensuring the IRS’s regulation is a reasonable implementation of the statute, and it concluded the sleep‑or‑rest test fits within the Commissioner’s authority. The Supreme Court therefore reversed the Court of Appeals and sustained the IRS rule.

Real world impact

The decision means taxpayers who make routine one‑day business trips without stopping overnight generally cannot deduct meal costs as travel expenses. The ruling promotes a clear, administrable rule and avoids ad hoc case‑by‑case litigation. If broader relief is desired, the opinion indicates Congress or the IRS would need to change the rule rather than the courts.

Dissents or concurrances

A dissent argued the statute speaks of geography, not time, and that an “overnight” test improperly adds a time element; that dissent would have left the jury verdict in place.