DocketNumber: No. 5395-06S
Citation Numbers: 2007 Tax Ct. Summary LEXIS 64, 2007 T.C. Summary Opinion 60
Judges: \"Armen, Robert N.\"
Filed Date: 4/23/2007
Status: Non-Precedential
Modified Date: 11/20/2020
*64 PURSUANT TO INTERNAL REVENUE CODE SECTION 7463(b), THIS OPINION MAY NOT BE TREATED AS PRECEDENT FOR ANY OTHER CASE.
ARMEN, Special Trial Judge: This case was heard pursuant to the provisions of
Manuel Ayala, Jr., and Carol A. Ayala (collectively, petitioners) received a notice of deficiency in which respondent determined: (1) Deficiencies in income taxes for 2002, 2003, and 2004 of $ 2,295, $ 4,050, and $ 4,459, respectively, and (2) accuracy-related penalties under
BACKGROUND
Some of the facts have been stipulated, and they are so found. We incorporate by reference the parties' stipulation of facts and accompanying exhibits.
Petitioners listed their mailing address on their petition as Las Vegas, Nevada. Mr. Ayala testified at trial that petitioners' permanent mailing address is Rocklin, California.
Mr. Ayala is employed by Sheehan Pipeline Construction Company (Sheehan) as a project safety coordinator, and he travels from one project to another, all over the country, ensuring compliance with health and safety regulations. When one project is completed, he is usually assigned a new project immediately. *66 Projects can last anywhere from a few months to a couple of years.
During the years at issue, Mr. Ayala worked on several back-to-back projects. During this period, petitioners lived in a travel trailer, and they traveled together from one job site to the next. In their own words, they were "gypsies". Although Mr. Ayala was paid a per diem while working onsite, it did not completely cover the travel expenses that were actually incurred.
Petitioners bought their home on wheels, the travel trailer, in Nevada; they registered the vehicle there out of convenience. Because they moved frequently and had to receive their mail somewhere, petitioners used a mail service in Las Vegas that provided them with a mailing address. They obtained Nevada licenses, and later, when they purchased a truck, they registered the truck in Nevada.
As petitioners do not own a residence for their own use aside from the travel trailer, they consider Mr. Ayala's ancestral home in Vallejo, California, to be their "real" home.
The ancestral home in Vallejo was purchased by Mr. Ayala's father in 1953, and it is both the home in which Mr. Ayala grew up and the home in which his disabled sister has resided for a*67 number of years. Mr. Ayala and his siblings own the home.
Petitioners have other ties to California. They grew up in Vallejo, and their son was born there. In addition, their daughter and grandchildren live in the Sacramento area. When petitioners are not on the road for Sheehan, they visit California, setting up their trailer near Sacramento and commuting back and forth to Vallejo as needed to assist with the care of Mr. Ayala's disabled sister. 2 However, petitioners do not file California State income tax returns or pay California State income tax unless Mr. Ayala has had California-source income from his employment with Sheehan. In addition, petitioners do not vote in California. 3
Petitioners financially assist with the support*68 of Mr. Ayala's disabled sister. Sometimes petitioners pay her water and trash collection bills, and sometimes they pay the property taxes on the home in Vallejo so that Mr. Ayala's sister might continue to live there without interruption of services or imposition of property-tax liens.
Petitioners and respondent primarily disagree on whether the house in Vallejo, California, is petitioners' "tax home" and consequently, whether petitioners' expenses incurred while working onsite for Sheehan are deductible under
DISCUSSION 4
A.
Generally, outlays for food and shelter are considered personal expenses and are not deductible.
As a general*70 rule, a taxpayer's principal place of employment is the taxpayer's "tax home".
Although the subjective intent of a taxpayer is to be considered in determining whether the taxpayer has a tax home, for purposes of
Most significantly in this case, petitioners bore no expenses in maintaining a home in addition to their travel trailer. Notwithstanding their very real ties to California, petitioners bore no duplicative living expenses. They did not make mortgage payments, pay regular utilities costs, or regularly pay for running a household other than the one in which they resided: The travel trailer. In other words, expenses incurred in respect of the*72 ancestral home in Vallejo were incurred for the benefit of Mr. Ayala's sister and not because of the exigencies of Mr. Ayala's business travel. Make no mistake: Petitioners' financial support of Mr. Ayala's sister was extremely laudable. However, those financial outlays were not of the type considered to be costs of maintaining a home such that the expenses related to petitioners' life on the road for Sheehan would be redundant. Petitioners were not "away from home" within the intent and meaning of
In view of the factual uncertainties presented in this case, as well as Mr. Ayala's forthright and very credible testimony, we are convinced that petitioners operated in good faith and that the reasonable cause and good faith provisions of section 6664(c)(1) are applicable here. We therefore decide in favor of petitioners on this issue.
In closing, we think it appropriate to observe that we found petitioners to be very conscientious taxpayers who take their tax responsibilities seriously. Mr. Ayala's testimony was straightforward and credible. The Tax Court, however, is a court of limited jurisdiction and lacks general equitable powers.
To reflect our disposition of the disputed issues,
Decision will be entered for respondent as to the deficiencies in income taxes and for petitioners as to the accuracy-related penalties.
1. Unless otherwise indicated, all subsequent section references are to the Internal Revenue Code in effect for the taxable years in issue.↩
2. During these periods, Mrs. Ayala usually stays in the trailer to care for petitioners' pets, and Mr. Ayala tries to stay in the house in Vallejo with his disabled sister.↩
3. Petitioners also do not vote in Nevada as they are not considered legal residents for voting purposes.↩
4. Given the manner in which these issues were presented to the Court, we make our decision as to both the deficiencies and additions to tax without regard to the various burdens of proof under sec. 7491.↩
5. During the years in issue, only Mr. Ayala was employed by Sheehan, so only his travel expenses are potentially deductible as business expenses under
Ludwig H. Brandl v. Commissioner of Internal Revenue , 513 F.2d 697 ( 1975 )
The Hays Corporation v. Commissioner of Internal Revenue , 331 F.2d 422 ( 1964 )
James O. Henderson v. Commissioner of Internal Revenue , 143 F.3d 497 ( 1998 )
George Harvey James v. United States , 308 F.2d 204 ( 1962 )
Commissioner v. McCoy , 108 S. Ct. 217 ( 1987 )
Weidekamp v. Commissioner , 29 T.C. 16 ( 1957 )
Wirth v. Commissioner , 61 T.C. 855 ( 1974 )
Hays Corp. v. Commissioner , 40 T.C. 436 ( 1963 )