United States v. Roy O. Disney and Edna F. Disney

The United States appeals from a district court judgment, reported at 267 F. Supp. 1 , awarding the taxpayers, Roy and Edna Disney, husband and wife, a refund of overpayments of federal income taxes for the tax years 1962 and 1963. The asserted overpayments, amounting to $3,154.09, resulted from the refusal of the Commissioner to allow the taxpayers to exclude from gross income, or to deduct as ordinary and necessary business expenses, amounts received by the husband from his employer as reimbursement for travel expenses incurred in taking his wife on certain of his business trips.

During the years in question, Disney was president, chairman of the board, a director and a member of the executive committee of Walt Disney Productions (company). The company, a publicly held corporation engaged in producing “family-type” entertainment, derives its income primarily from theatrical distribution of motion pictures. However, its business also includes the operation of Disneyland Park, “character” merchandising (children’s clothing, dolls and games modeled after Disney characters), the publishing of music, books and magazines, and the distribution of sixteen-millimeter motion picture…