Durrance v. Comm'r , 2010 Tax Ct. Summary LEXIS 12 ( 2010 )

T.C. Summary Opinion 2010-12
UNITED STATES TAX COURT
JAY A. DURRANCE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 11304-09S. Filed February 3, 2010.
Jay A. Durrance, pro se.
Julia L. Wahl, for respondent.
ARMEN, Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code in
effect at the time that the petition was filed.1 Pursuant to
section 7463(b), the decision to be entered is not reviewable by
1
Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code in effect for the
year in issue, and all Rule references are to the Tax Court Rules
of Practice and Procedure.
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any other court, and this opinion shall not be treated as
precedent for any other case.
Respondent determined a deficiency of $2,550 in petitioner’s
Federal income tax for 2006.
After concessions by petitioner, the issue for decision is
whether petitioner is entitled to a deduction of $10,528 for
travel expenses under section 162(a)(2). The resolution of this
issue turns on whether petitioner’s position with Meisner
Electric, Inc., in Delray Beach, Florida, was temporary or
indefinite. We hold that petitioner’s position with Meisner
Electric, Inc., was indefinite and, therefore, that he is not
entitled to the deduction in issue.
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.
Petitioner resided in the State of Kansas when the petition
was filed.
On August 11, 2006, petitioner was offered a position with
Meisner Electric, Inc. (Meisner), in Delray Beach, Florida. The
offer of employment states the position title as project
coordinator and indicates an annual salary. The position as
project coordinator was a permanent position with an initial 6-
month probationary period and had a start date of August 21,
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2006. Although the position was permanent, petitioner intended
it to be an interim position while he pursued other employment
opportunities. When petitioner took the position with Meisner,
he owned and lived in a townhouse in Lake Mary, Florida (a suburb
of Orlando, Florida), approximately 200 miles from Delray Beach.
In 2006 petitioner belonged to the local electrical union in
Orlando, Florida. When petitioner accepted the position with
Meisner, he was unemployed and was on the union’s “out-of-work
book”. Although the position with Meisner was for work on
commercial properties, petitioner’s preference was to work on
industrial projects because the pay is better. The Orlando
market supplied mostly commercial projects as opposed to
industrial projects; and even though he accepted the position
with Meisner, when and if he found a position closer to Lake Mary
or employment on an industrial project, petitioner intended to
resign the position.
From August through December 2006 petitioner drove between
Lake Mary and Delray Beach. Petitioner drove to Delray Beach at
the beginning of the work week and stayed in a motel during the
week. Petitioner returned to Lake Mary on the weekends so as not
to incur additional motel costs for days he was not working. The
5 days a week petitioner was in Delray Beach he stayed at a
motel. In mid-December 2006 petitioner signed a 1-year lease for
an apartment in Delray Beach.
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In September 2007 petitioner left his position with Meisner
for a position with M.J. Electrical based out of Iron Mountain,
Michigan. Petitioner began his employment with M.J. Electrical
in Topeka, Kansas, but at the time of trial worked for that
company in Morgantown, West Virginia. M.J. Electrical pays for
petitioner’s living expenses while traveling and for trips to
Lake Mary.
On his 2006 Federal income tax return petitioner claimed an
employee business travel expense deduction of $16,321.2
Respondent disallowed the entire deduction. Petitioner conceded
that he overstated the deduction by $5,787; thus, $10,528 of the
deduction remains at issue. The latter amount consists of
vehicle expenses, lodging, and meals and incidentals incurred as
a result of petitioner’s position with Meisner in Delray Beach.
Discussion
Deductions are a matter of legislative grace, and the
taxpayer bears the burden of proving that he or she is entitled
to any deduction claimed. Rule 142(a); Deputy v. du Pont, 308
U.S. 488, 493 (1940); New Colonial Ice Co. v. Helvering, 292 U.S.
435, 440 (1934).3
2
However, because of a math error on the return the
deduction should have been $16,315.
3
We decide the disputed issue without regard to the burden
of proof.
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Generally, a taxpayer may not deduct personal, living, or
family expenses, such as the costs of transportation, meals, and
lodging while traveling away from home. Sec. 262; sec. 1.262-
1(b)(5), Income Tax Regs. However, travel expenses may be
deducted under section 162(a)(2) if they are: (1) Reasonable and
necessary; (2) incurred while the taxpayer was traveling “away
from home”; and (3) incurred in pursuit of a trade or business.
Commissioner v. Flowers, 326 U.S. 465, 470 (1946). The reference
to “home” in section 162(a)(2) means the taxpayer’s “tax home”.4
Mitchell v. Commissioner, 74 T.C. 578, 581 (1980); Foote v.
Commissioner, 67 T.C. 1, 4 (1976); Kroll v. Commissioner, 49 T.C.
557, 561-562 (1968).
As a general rule, a taxpayer’s tax home is determined by
the location of the taxpayer’s principal place of employment,
regardless of where the taxpayer’s personal residence is located.
Mitchell v. Commissioner, supra at 581; Kroll v. Commissioner,
supra at 561-562. Under an exception to the general rule, a
taxpayer’s personal residence may be his tax home where the
taxpayer is away from home on a temporary rather than indefinite
basis. Peurifoy v. Commissioner, 358 U.S. 59, 60 (1958). The
4
The vocational “tax home” concept was first construed by
this Court in Bixler v. Commissioner, 5 B.T.A. 1181, 1184 (1927),
and has been steadfastly upheld by this Court. See, e.g., Horton
v. Commissioner, 86 T.C. 589 (1986); Leamy v. Commissioner, 85
T.C. 798 (1985); Foote v. Commissioner, 67 T.C. 1 (1976); Kroll
v. Commissioner, 49 T.C. 557 (1968).
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flush language of section 162(a) provides that a “taxpayer shall
not be treated as being temporarily away from home during any
period of employment if such period exceeds 1 year.”
Employment is defined as “temporary” only if the taxpayer
can foresee its termination within a reasonably short period of
time or it is for a fixed duration. Boone v. United States, 482
F.2d 417, 419 (5th Cir. 1973). Indefinite employment is
employment where the prospect is that the work will continue for
an indefinite and substantially long period. Id. (citing
Cockrell v. Commissioner, 321 F.2d 504 (8th Cir. 1963), affg. 38
T.C. 470 (1962), and Wright v. Hartsell, 305 F.2d 221 (9th Cir.
1962)). Whether a taxpayer’s job is temporary or indefinite is
determined by the facts and circumstances. Peurifoy v.
Commissioner, supra at 61.
This Court has held that a taxpayer’s subjective intent as
to the length of time he may wish to remain in an indefinite
position is not controlling but the ultimate question is whether
the taxpayer’s decision not to move his residence while he works
somewhere else is attributable to personal choice rather than to
exigencies of his trade or business. Tucker v. Commissioner, 55
T.C. 783, 786 (1971); Hendry v. Commissioner, T.C. Memo. 1981-
740. This Court has further held that when a taxpayer’s
prospects for employment in his chosen profession are better away
from the area of his previously established residence than in it,
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then we may regard his decision to keep his residence there as
motivated by personal reasons unrelated to his trade or business.
Sanderson v. Commissioner, T.C. Memo. 1998-358 (citing Tucker v.
Commissioner, supra at 787).
Petitioner contends that his position with Meisner in Delray
Beach was temporary, as he intended to stay in that position only
until he found a job closer to Lake Mary or employment on an
industrial project. Respondent argues that petitioner’s position
with Meisner was in fact indefinite. We agree with respondent.
Given the circumstances surrounding his employment with
Meisner, we can understand why petitioner might consider his
position “temporary”, as that word is used in common parlance.
After all, at all relevant times it was his intention to resign
the position with Meisner as soon as possible for business as
well as personal reasons.
Nevertheless, the position with Meisner was a permanent
position with no foreseeable terminus. When petitioner accepted
the position with Meisner, he had a reasonable expectation that
the position would, and it in fact did, last more than 1 year.
Furthermore, petitioner’s job prospects in the Orlando area were
at best unpromising in light of his recent unemployment and the
scarcity of industrial projects. Indeed, the job for which
petitioner resigned his position with Meisner was in Kansas, with
a company located in Michigan. Petitioner kept his residence in
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Lake Mary for reasons of personal choice despite, rather than
because of, the exigencies of his trade or business.
Consequently, because petitioner’s position with Meisner in
Delray Beach was an indefinite position, Delray Beach was his tax
home for the relevant period. Because petitioner was not “away
from home” within the meaning of section 162(a)(2) while in
Delray Beach, he is not entitled to a deduction for vehicle
expenses, lodging, and meals and incidentals incurred as a result
of his position in Delray Beach. Instead, his costs were in the
nature of personal or living expenses. We thus sustain
respondent’s determination on this issue.
Conclusion
We have considered all of the other arguments made by
petitioner and, to the extent that we have not specifically
addressed them, we conclude that they do not support a holding
contrary to that reached herein.
To reflect our disposition of the disputed issue, as well as
petitioner’s concessions,
Decision will be entered
for respondent.