Daniels, Fred H., et ux. v. Comm.

Decision will be entered for the respondent.

Raymond T. Mahon, for the petitioners. Lawrence A. Wright, for the respondent.

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Respondent has determined a deficiency in Federal income tax against petitioners for the calendar year 1960 in the amount of 6,377.48.

The only issue to be decided is whether an expenditure of 9,355.75, incurred in the construction of a fallout shelter in 1960, is deductible as a medical expense under section 213, I.R.C. 1954. FINDINGS OF FACT The stipulated facts are hereby found accordingly.

Petitioners Fred H. Daniels (hereinafter referred to as petitioner) and his wife, Eleanor G. Daniels, reside at 190 Salisbury Street,

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Worcester, Mass. They filed a joint Federal income tax return for the calendar year 1960 with the district director of internal revenue for the district of Massachusetts.

In the taxable year 1960, petitioner, who was much interested in the fallout shelter program, hired the building firm of J. B. Lowell, Inc., to construct a fallout shelter under a terrace outside his residence. A statement was rendered petitioners on November 4, 1960, for labor, materials, insurance, taxes, trucking, use of equipment, and commission, for the period May 12 to October 31, 1960, in the amount of 10,752.49, which was stipulated to be the total cost of the shelter. Petitioners deducted 9,355.75 of this sum as a medical expense on their Federal income tax return for 1960, which deduction was disallowed.

Petitioners submitted with their return a letter dated October 6, 1960, from petitioner's doctor in which it was recommended that petitioner build a fallout shelter. The doctor stated that, in case of disaster or the advance of nuclear fallout toward New England, the fact that petitioner had his own fallout shelter would reduce anxiety which otherwise would affect petitioner's heart and hypertensive condition. There are public fallout shelters in the Worcester area.

The fallout shelter, which is more than one-half underground, measures 40 feet long by 10 feet wide. It has granite and cinder block walls 30 inches thick and a reinforced-concrete roof approximately 8 inches thick. The shelter has "panel heating," in connection with which resistance wires are buried in the floor and ceiling. A diesel generator installed in the shelter supplies electricity for heating the shelter and operating the electrical appliances located therein. The generator is oil powered, and the oil supply is kept in a 2,000-gallon tank placed underground outside the shelter. Also situated in the shelter are an electric stove and refrigerator, chairs, and sleeping facilities for two people. Water is brought into the shelter from an artesian well located on petitioner's property. The air supply enters the shelter through a filter which takes solid particles out of the air; there is a hand-generated air pump that can be used if the electric power should fail.

The amount of 10,752.49 paid to the Lowell firm in 1960 covered only the cost of building the shelter. The costs of the electrical and heating equipment and the water supply were separate and were not deducted by petitioners in 1960.

The petitioners had the shelter built at their residence for the purpose of remaining there if necessary for an extended period to protect themselves against sickness from "fallout radiation." The shelter is not used for any other purpose.

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"Fallout radiation" is defined by the Office of Civil and Defense Mobilization as the radioactive debris of a nuclear explosion, which eventually falls to earth in particles. The amount of fallout is greater if a weapon detonates on or near the surface than if it explodes in the atmosphere. Large amounts of earth are drawn up by the fireball. High in the sky, radioactive elements are incorporated into the earth particles, which are scattered by winds and in time fall to the ground. "Fallout radiation" is the radiation emitted by fallout particles. Each particle gives off radiation as though it were a miniature X-ray machine. This radiation consists chiefly of beta rays (which are dangerous only if fallout particles touch the skin or are swallowed or inhaled) and gamma rays. Gamma rays, like X-rays, are penetrating and create the need for protective shields such as fallout shelters.

When large amounts of radiation are absorbed by the body in short periods of time, sickness and death may result. In general, the effects of radiation stay with those exposed and accumulate over a period of time. The total radiation level in Worcester was approximately 0.00004 roentgen in 1960. Few of those exposed to 100 roentgens or less contract radiation sickness. Beginning at doses of radiation in the range of 300 to 400 roentgens, the human body would undergo changes in the blood count and would have an inability to create the white cells necessary to fight off infection. As the dosage increases, a person would experience nausea, vomiting, unusual bleeding, diarrhea, loss of hair, and possibly death. Death is certain upon exposure to 1,000 roentgens over a period of a few days.

The sickness or injury which results from an overdose of radiation may be in the form of either local damage, such as a burn or bone damage, or a whole-body reaction. Where there is a whole-body reaction to an overdose of radiation, changes in the intestinal tract and depression of the blood-forming organs result, leaving the body open to infection.

An older person would be affected more readily by an overdose of radiation because his blood-forming organs would be damaged more easily.

The condition contracted from an overdose of radiation is within the clinically accepted meaning of the term "sickness."

No medication could protect a person against the effects of gamma radiation resulting from a nuclear explosion. "Fallout radiation" in the form of gamma rays would pass through any type of protective clothing that would be practical to wear. Heavy and dense materials, such as earth and concrete, are needed to stop the highly penetrating fallout rays.

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According to the Office of Civil and Defense Mobilization, the best protection against the dangers of "fallout radiation" is afforded by an underground shelter with at least 3 feet of earth or 2 feet of concrete. The shelter would provide protection against radiation, eliminating alpha and beta radiation completely and cutting the rate of gamma rays to 1/5000 of the rate above ground.

At the time of trial, petitioner was 75 years old and his wife was 73 years old. Their residence, which is 2 1/2 stories high, is about 40 years old. It is located at a heavily used intersection approximately 1.2 miles from the center of Worcester. The house has 15 or 16 rooms, excluding baths, of which 8 are bedrooms. The living area of the residence is 15,000 square feet, as compared to the 3,000 square feet of living area found in the average residence. The property taxes on the residence total about 4,800 annually.

There is no readily available market for houses such as that of petitioners in their general area. Residences similar in size to that of petitioners, and located in the same general area, have been demolished because of the scarcity of prospective purchasers.

Both before and after the construction of the shelter, the property was assessed by the Worcester tax assessor at 60,000, of which 18,000 was attributable to the land 42,000 to the house. The city taxing authorities had proposed to increase the 1961 figure for petitioners' residence by 1,000. Petitioners, contending that the only change had been the fallout shelter which added no value to the house, applied for an abatement of the increased real estate taxes. The abatement was granted. OPINION

It seems clear that the construction of petitioners' fallout shelter was not for the "diagnosis, cure, mitigation," or "treatment" of an existing disease. Any justification for the deduction of its cost as a medical expense ¹ must arise from its characterization as "prevention." But we have been referred to no authority extending the concept of prevention to so remote a hazard to health as would be required here to sustain petitioners.On the contrary,

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The Congressional intent is sufficiently evident to require the showing of the present existence or the imminent probability of a disease, physical or mental defect, or illness as the initial step in qualifying an expenditure as a medical expense. * * * [Emphasis added. L. Keever Stringham, 12 T.C. 580, 584 (1949), affirmed per curiam 183 F. 2d 579 (C.A. 6, 1950).]

The facts show that there was no "present existence" of fallout radiation disease, and petitioners do not contend otherwise. In view of the great disparity between the radiation level in Worcester in 1960 and that which would cause illness, there cannot be said to have been any "imminent probability" of disease. Petitioners have introduced no plausible evidence tending to show the imminent probability of increased radiation in the Worcester area at or before the time the shelter was constructed.

Indeed, we could not find on this record that the expenditure would not have been made but for the advice of a physician. Robert M. Bilder, 33 T.C. 155 (1959), affirmed on other grounds 369 U.S. 499 (1962), which reversed 289 F. 2d 291 (C.A. 3, 1961); Ochs v. Commissioner, 195 F. 2d 692, 697 (C.A. 2, 1952), affirming 17 T.C. 130 (1951), certiorari denied 344 U.S. 827. The shelter was well underway before the doctor's letter was written, and petitioners introduced no evidence showing that the shelter was built on the doctor's recommendation primarily for the prevention or mitigation of disease. See Estate of Eugene Merrick Webb, 30 T.C. 1202, 1213 (1958).

Whether the danger to society from an atomic attack may adequately explain governmental action in undertaking or encouraging precautionary measures does not contribute to the solution of the present problem. What is requisite is a proximate and immediate relationship between at least some illness threatening petitioners and the fallout shelter they have constructed. In this aspect the situation is not unlike the installation of sprinkler systems or fire escapes to mitigate the danger of illness from smoke inhalation or infected burns. No doubt there is some relationship between the two but it could hardly be said that Congress intended this to authorize a medical as contrasted with a business ² deduction. And the same case could be made here that such measures would not be capital improvements, since petitioners' contention in this respect is limited to evidence that the residence was not salable to anyone -- that it had no fair market value which an improvement could increase. As to this we express no opinion. In the view we take, the capital improvement concept ³

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need not be discussed as a material consideration and our conclusion does not rest upon it.

Deductions are matters of legislative grace and petitioners have failed to show that there is more than a remote possibility, if any, that a disease threatening them in the Worcester area would be prevented by the shelter, nor that its cost was different from other nondeductible personal ⁴ expenses "related to factors and equations of personal life and situation that leave them without the persuading certainty and undubious objectivity necessary to a tax deduction." Rodgers v. Commissioner, 241 F. 2d 552, 555 (C.A. 8, 1957), affirming 25 T.C. 254 (1955).

This is a factual matter, Frances Hoffman, 17 T.C. 1380 (1952), and on this record we must find that the criteria of deductibility have not been met.

Decision will be entered for the respondent.

Footnotes ¹ SEC. 213 [I.R.C. 1954]. MEDICAL, DENTAL, ETC., EXPENSES.

(a) Allowance of Deduction. -- There shall be allowed as a deduction the following amounts of the expenses paid during the taxable year, not compensated for by insurance, or otherwise, for medical care of the taxpayer, his spouse, or a dependent (as defined in section 152): * * * * (e) Definitions. -- For purposes of this section -- (1) The term "medical care" means amounts paid --

(A) for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body (including amounts paid for accident or health insurance) * * *

² Cf. I.T. 3588, 1942-2 C.B. 89.

³ "* * * for example, where a taxpayer is advised by a physician to install an elevator in his residence so that the taxpayer's wife who is afflicted with heart disease will not be required to climb stairs [, if] the cost of installing the elevator is 1,000 and the increase in the value of the residence is determined to be only 700, the difference of 300, which is the amount in excess of the value enhancement, is deductible as a medical expense. * * *" Sec. 1.213-1(e)(1)(iii), Income Tax Regs., as amended by T.D. 6604, 1962-2 C.B. 84, 87-88.

⁴ Even though the shelter was for an emergency, it was obviously designed as a place where petitioners could live for a possibly extended period.