DocketNumber: Docket No. 4846-79.
Citation Numbers: 42 T.C.M. 116, 1981 Tax Ct. Memo LEXIS 445, 1981 T.C. Memo. 304
Filed Date: 6/18/1981
Status: Non-Precedential
Modified Date: 11/20/2020
1981 Tax Ct. Memo LEXIS 445">*445 Petitioner, a construction worker, worked for over 2 years at a site approximately 112 miles from his purported tax home.
MEMORANDUM FINDINGS OF FACT AND OPINION
IRWIN,
FINDINGS OF FACT
Some of the facts have been stipulated and are found accordingly. The stipulation of facts and the attached exhibits are incorporated herein by this reference.
Petitioner, Gerald A. Ostrand, was a resident of Mizpah, Minnesota, at the time the petition was filed in this case. He timely filed a Federal income tax return for the 1976 taxable year.
During the years 1975 through 1979, petitioner was employed by approximately eight construction firms at various locations in northern Minnesota. From September 1975 to December 1977, petitioner was employed by ABI Corporation, Inc. (ABI), the general contractor for concrete pouring at the United States Steel taconite processing plant which was being constructed near Parkville, Minnesota. Petitioner's duties at the Parkville site consisted of operating1981 Tax Ct. Memo LEXIS 445">*447 and maintaining heavy equipment such as generators, welders, loaders and overhead cranes. Petitioner's versatility in operating and maintaining various pieces of machinery contributed to his continued employment with ABI.
During 1976 petitioner owned a mobile home in Mizpah, Minnesota, approximately 112 miles from the Parkville construction site where he was employed. From January through August of 1976, petitioner rented living accomodations in Chisholm2 and from September through December rented a trailer near Parkville. Petitioner attempted to purchase the trailer he rented near Parkville, but a problem with the title prevented him from completing the transaction.
On his 1976 income tax return, petitioner deducted as employee business expenses $ 2,080 for rent, $ 4,536 for meals and $ 2,640 in automobile expenses for a total of $ 9,256. These amounts were attributable to his living expenses incurred while working at the Parkville site. In the notice of deficiency mailed to petitioner on March 22, 1979, respondent disallowed the claimed deduction in full on the basis that petitioner had not established1981 Tax Ct. Memo LEXIS 445">*448 that the amount constituted an ordinary and necessary business expense.
OPINION
The issues for decision are whether petitioner's claimed deductions for living expenses during 1976 qualify as ordinary and necessary employee business expenses incurred while away from home and, if so, whether the expenses were properly substantiated.
Section 262 3 states the general rule that a taxpayer is prohibited from deducting personal living expenses. Thus, expenditures for food, lodging, and transportation are clearly nondeductible unless expressly allowed by another Code provision. An exception to this rule is provided in section 162(a)(2) which permits the deductibility of certain traveling expenses as follows:
(a) In General.--There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including--
(2) traveling expenses (including amounts expended for meals and lodging other than amounts which are1981 Tax Ct. Memo LEXIS 445">*449 lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business * * *.
In order to come within the exception of section 162(a)(2) the traveling expenses must meet three criteria: (1) they must be ordinary and necessary; (2) they must be incurred while away from home; and (3) they must be incurred in the pursuit of a trade or business.
The pivotal criterion in the instant case is whether the living expenses deducted by the petitioner were incurred while away from home. A taxpayer's "home" for purposes of section 162(a)(2) has been consistently interpreted by this Court to mean the vicinity of his principal place of employment.
Although each case must be determined on its own unique facts, employment is generally considered to be temporary when it is expected to last only for a relatively brief period of time.
Where it appears probable that a taxpayer's employment outside the area of his regular abode will be for a "temporary" or "short" period of time, then his travel expenses are held to be deductible; conversely, if the prospects are that his work will continue for an "indefinite" or "intermediate" or "substantially long" period, then the deduction is disallowed. [
See also
The burden of proving that the employment was temporary rests on the taxpayer.
It is undisputed that petitioner was employed from September of 1975 to December of 1977 by ABI, a general contractor involved in a major construction project. During that time petitioner both operated and maintained various pieces of heavy equipment and this versatility was a factor in his continued employment. There was no indication in the record that petitioner expected the project to be discontinued or that he expected to be laid off within a short period of time after commencing employment. Rather, the evidence points to the conclusion that petitioner expected to be employed for the duration of the project.
In contrast, there is a dearth of evidence linking petitioner with his purported tax home. Petitioner rented living accommodations for the entire year near his place of employment and even attempted to purchase the trailer house in Parkville that he lived in during the latter part of 1976. According to the record, petitioner's sole connection with Mizpah was a mobile home that he owned there. However, there was no evidence that1981 Tax Ct. Memo LEXIS 445">*453 duplicate living expenses were incurred in maintaining two households. In addition, petitioner's filing status in 1976 was single and there was no testimony that family members remained in Mizpah.
Petitioner's principal support for his position was his unsupported testimony that his employment with ABI was not "permanent" because he could not ascertain how long the job would continue. Petitioner concludes that this lack of permanence prevented him from moving from Mizpah to a location nearer the job site at Parkville. 4 Lack of permanence, however, does not equate with temporariness. Rather, employment that lacks permanence is indefinite unless termination within a short period can be foreseen.
1981 Tax Ct. Memo LEXIS 445">*454 Although no single factor is determinative of the ultimate issue of whether employment is temporary,
1. All statutory references are to the Internal Revenue Code of 1954, as amended, and in effect during the year in issue.↩
2. Chisholm, Minnesota, is approximately 15 miles from Parkville.↩
3. SEC. 262. PERSONAL, LIVING, AND FAMILY EXPENSES.
Except as otherwise expressly provided in this chapter, no deduction shall be allowed for personal, living, or family expenses.↩
4. However, the lack of duplicate living expenses points to the conclusion that petitioner did not maintain a home in Mizpah during 1976. As noted by the Eighth Circuit, the term "home" --
is referable to the place where one has his principal place of duty, and where he has an abode while pursuing such duty; -- not where he merely claims his "residence" to be. [
5. Because of our resolution of this issue we do not reach the question of what amount of the claimed expenses have been properly substantiated.↩
Leo C. Cockrell, and Carol P. Cockrell v. Commissioner of ... , 321 F.2d 504 ( 1963 )
Louis R. And Yvonne M. Frederick v. United States , 603 F.2d 1292 ( 1979 )
Calvin E. Wright, District Director of Internal Revenue v. ... , 305 F.2d 221 ( 1962 )
Welch v. Helvering , 54 S. Ct. 8 ( 1933 )
Commissioner v. Flowers , 66 S. Ct. 250 ( 1946 )