T.C. Summary Opinion 2006-36
UNITED STATES TAX COURT
WILLIAM D. AND BETTY J. BOYD, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13780-02S. Filed March 2, 2006.
William D. and Betty J. Boyd, pro se.
Thomas C. Pliske, for respondent.
COUVILLION, Special Trial Judge: This case was heard
pursuant to section 7463 in effect when the petition was filed.1
The decision to be entered is not reviewable by any other court,
and this opinion should not be cited as authority.
1
Unless otherwise indicated, subsequent section references
are to the Internal Revenue Code in effect for the year at issue.
All Rule references are to the Tax Court Rules of Practice and
Procedure.
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Respondent determined a deficiency of $3,418 in petitioners’
Federal income tax for 1999.
The sole issue for decision is whether petitioners had a
“home to be away from” within the meaning of section 162(a)(2)
during 1999 entitling them to a deduction for employee business
expenses.
Prior to trial, petitioners failed to execute an agreed
stipulation of facts pursuant to Rule 91(a), whereupon respondent
filed a motion to show cause why proposed facts in evidence
should not be accepted as established. The response filed by
petitioners was not responsive to the Court’s order. The Court,
accordingly, issued an order making the rule absolute declaring
the facts proposed by respondent established for purposes of this
case. At the time petitioners filed their petition, they listed
an address at Nederland, Texas.
William D. Boyd (petitioner) is a licensed Pentecostal
evangelist. He does not have a church or a fixed base of
operation for the conduct of his ministry. He and his spouse
(Mrs. Boyd) travel throughout the United States in a recreational
vehicle and conduct religious services at churches for either a
few days or a few weeks. Mrs. Boyd assists petitioner as a
singer at each of their appearances.
Petitioners call Prentice, Mississippi, their home.
Petitioners, however, do not own or rent any dwelling in
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Mississippi or in any other State, except two burial plots in
Mississippi. Petitioners have a daughter who lives in
Mississippi, and all mail to petitioners is sent to the daughter.
Whatever mail she receives, she mails it to petitioners wherever
they happen to be. Most of the mail is from churches throughout
the United States inviting petitioners to appear at their
churches. Petitioners occasionally visit Mississippi, and they
always stay as guests at the local church. The local pastor is
also a contact person for persons interested in contacting
petitioners. During the year at issue, petitioners visited
Prentice, Mississippi, three times.
Petitioners, therefore, had no home in Mississippi that they
maintained and, accordingly, incurred no expenses in maintaining
a home. Petitioners, however, contend that Mississippi is their
home, and all their friends and relatives consider petitioners’
home as Mississippi.
Petitioners filed a joint Federal income tax return for
1999. They thereafter filed at least two amended returns. On
each return, petitioners included a Schedule C, Profit or Loss
From Business, on which they reported the income and expenses of
their ministerial activity. On each of these returns, the
expenses exceeded the reported gross income. For the year at
issue, on the return that the Court believes represented the last
of the amended returns, petitioners reported Schedule C gross
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receipts of $45,153, expenses of $61,219, and a net loss of
$16,066.2 In the notice of deficiency, respondent disallowed the
entire loss.
For purposes of this case, respondent does not challenge the
accuracy of the claimed expenses or the amount of income
reported. Respondent’s sole basis for disallowing the claimed
expenses is that, as a matter of law, petitioners are not
entitled to deductions for such expenses. Petitioners contend
that the expenses were incurred in connection with their trade or
business, and, therefore, such expenses are deductible.
Petitioners also contend that, while their return was under
audit, they received a refund of $1.30, and, because of that
refund, petitioners believed that their claimed expenses had been
allowed.
The issuance of a refund does not preclude Commissioner from
issuing a notice of deficiency. Gordon v. United States, 757
F.2d 1157, 1160 (11th Cir. 1985); Beer v. Commissioner, 733 F.2d
435, 437 (6th Cir. 1984), affg. T.C. Memo. 1982-735; Warner v.
Commissioner 526 F.2d 1, 2 (9th Cir. 1975), affg. T.C. Memo.
1974-243. The taxpayers in Gordon v. United States, supra, and
2
The Schedule C expenses consisted of:
Meals & entertainment (net) $12,775
Utilities 744
Other expenses, identified only as dues of $250
and per diem of $47,450 47,700
The per diem was not described by petitioners at trial.
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in Warner v. Commissioner, supra, made the same argument as
petitioners; i.e., that respondent should not be able to make
refunds and then demand repayment. To this the Courts of Appeals
replied: “Alas, the Commissioner, confronted by millions of
returns and an economy which repeatedly must be nourished by
quick refunds, must first pay and then look. This necessity
cannot serve as the basis of an ‘estoppel’.” Gordon v. United
States, supra at 1160 (quoting Warner v. Commissioner, 526 F.2d
at 2).
With respect to the principal issue, whether petitioners are
entitled to a deduction for trade or business expenses, section
162(a)(2) allows deductions for traveling expenses, including
amounts expended for meals and lodging, if the expenses are (1)
ordinary and necessary, (2) incurred while “away from home”, and
(3) incurred in pursuit of a trade or business. Bochner v.
Commissioner, 67 T.C. 824, 827 (1977). Respondent does not argue
that petitioners have failed to satisfy the first and third
tests. Respondent contends that petitioners were not “away from
home” when they incurred the expenses.
As a general rule, a taxpayer’s principal place of
employment is his “tax home”. Kroll v. Commissioner, 49 T.C.
557, 561-562 (1968). An employee without a principal place of
business may treat a permanent place of residence at which he
incurs substantial continuing living expenses as his tax home.
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Weidekamp v. Commissioner, 29 T.C. 16, 21 (1957). Where the
taxpayer has neither a principal place of business nor a
permanent residence, he has no tax home from which he can be
away. His home is wherever he happens to be. Brandl v.
Commissioner, 513 F.2d 697, 699 (6th Cir. 1975), affg. T.C. Memo.
1974-160; Rosenspan v. United States, 438 F.2d 905, 912 (2d Cir.
1971); James v. United States, 308 F.2d 204 (9th Cir. 1962).
While the subjective intent of the taxpayer is to be
considered in determining whether he has a tax home, for purposes
of section 162(a)(2), this Court and others consistently have
focused more on objective financial criteria. The section is
intended to mitigate the burden of a taxpayer who, because of the
travel requirements of his trade or business, must maintain two
places of abode and, therefore, incur additional living expenses.
Brandl v. Commissioner, supra; Kroll v. Commissioner, supra.
Section 162(a)(2) provides relief to a taxpayer who incurs
“substantial continuing expenses” of a home which are duplicated
by business travel away from home on a temporary basis by
allowing a deduction for the expenses of such travel. A taxpayer
has a “home” for this purpose only when it appears he has
incurred substantial continued living expenses at the permanent
place of residence. James v. United States, supra at 207-208.
Whether petitioners had a tax home is a factual question and
is easily resolved in this case by the fact that petitioners made
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only three visits to Mississippi during the year in question,
and, on each visit, they stayed at the local church rectory and,
perhaps, with their daughter. While the length of those visits
was not established, the record indicates that the visits were
not for prolonged periods. Most significantly, however,
petitioners bore no expenses in maintaining a home there in
addition to their recreational vehicle. Thus, petitioners could
not be “away from home” within the intent and meaning of section
162(a)(2) because they had no “home” to be away from. Barone v.
Commissioner, 85 T.C. 462, 465 (1985), affd. without published
opinion 807 F.2d 177 (9th Cir. 1986); Wirth v. Commissioner, 61
T.C. 855, 859 (1974). Where the taxpayer does not have a
permanent residence, he has no tax home from which he can be
away. The home is wherever the taxpayer happens to be. Brandl
v. Commissioner, supra. Since that is the factual situation
petitioners were in, it follows that they are not entitled to the
expenses claimed as deductions on their 1999 Federal income tax
return. Respondent, therefore, is sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.