Gilliam v. Commissioner

51 T.C.M. 515 (1986)

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Nature of the Case

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Facts

Gilliam (P) was a noted artist and a teacher of art who resided in D.C. D accepted an invitation to lecture and teach for a week at the Memphis Academy of Arts. He flew there on February 23, 1975. P had a history of mental and emotional disturbances and was under psychiatric care until this trip to Memphis. In December 1963 he was hospitalized in Louisville and from 1965-66 suffered from depression. He also had episodes in 1973 while in California. Before the Memphis trip, P created a 225-foot painting for the Corcoran. P was also creating a giant mural for the Philadelphia Art Museum for the 1975 Spring Festival. The budget plans were due on the 24^th of February. The night before the trip, P felt anxious and was unable to rest and got a prescription for Dalmane on the way to the airport. This had never been prescribed before. P got the drugs and took the medicine shortly before boarding. About 1.5 hours into the flight P began to act in an irrational manner and could not control himself, struck another passenger with a telephone receiver who sustained a one-inch laceration above his left eye, suffered ecchymosis of the left arm and pains in his left wrist. P was arrested in Memphis and indicted and he entered a plea of not guilty and was eventually granted an acquittal by reason of temporary insanity. P paid $9,250 and $9,600 in legal fees in 1975 and 76 for both the criminal and civil claims. P paid the passenger $3,900 for settlement of the civil claim. P deducted these amounts from the respective tax returns, and the IRS disallowed them as they were not ordinary expenses of P’s trade or business. P’s trip was in furtherance of his trade or business.