## Facts

- John D. Moss, Jr. was a partner in a Chicago-area insurance defense law firm; Diane C. Moss was a party only because the couple filed joint returns.
- The firm handled a heavy litigation caseload requiring frequent, short-notice scheduling decisions and case assignments.
- The firm’s attorneys had an informal practice of meeting daily during the noon court recess at a nearby restaurant.
- During these lunches, attorneys discussed assignments, court appearances, litigation problems, and settlement status; attendance was expected when feasible.
- The firm used daily “call sheets” at the lunch meetings to coordinate who would cover which matters.
- The partnership paid the lunch bills and deducted the amounts on its partnership returns as “meetings and conferences” (about $7,113.85 in 1976 and $7,967.85 in 1977).
- Moss claimed his distributive share of these partnership deductions on his individual returns.
- The IRS disallowed Moss’s share, determining income tax deficiencies for 1976 and 1977.

## Issues

1. Whether a partner may deduct, under I.R.C. § 162(a), his share of partnership expenses for daily local lunch meetings used to conduct firm business.
2. Whether those lunch costs are nondeductible “personal, family, or living expenses” under I.R.C. § 262 despite their business use.

## Decision

- The Tax Court sustained the Commissioner’s disallowance and the resulting deficiencies.
- The court held that the daily lunch costs were nondeductible personal expenses under I.R.C. § 262.
- The court concluded that combining a normal meal with business discussions, even regularly and for work efficiency, did not convert the food costs into deductible business expenses.

## Legal Principles

- I.R.C. § 262 generally bars deductions for personal living expenses, including ordinary daily meals, unless a specific provision provides otherwise.
- I.R.C. § 162(a) permits deductions only for expenses that are ordinary and necessary in carrying on a trade or business; a business purpose alone does not overcome § 262 when the expense is inherently personal.
- Ordinary local meal costs typically remain personal even when consumed during business meetings; deductibility for meals is generally confined to specific statutory contexts (e.g., travel “away from home”), not routine daily dining.
- Tax characterization turns on the substance of the expense, not its bookkeeping label as a partnership “meeting” or “conference” cost.

## Conclusion

The Tax Court held that a law-firm partner could not deduct his share of partnership-paid daily local lunch costs because the expenditures were fundamentally personal meal expenses barred by I.R.C. § 262, even though the lunches were used as a regular forum for conducting firm business.


Moss v. Commissioner, 80 T.C. 1073 (1983)