T.C. Memo. 2007-152
UNITED STATES TAX COURT
DAVID A. AND REBECCA ROSE WILBERT, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 21972-05. Filed June 14, 2007.
David A. and Rebecca Rose Wilbert, pro sese.
Lisa R. Woods, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
KROUPA, Judge: Respondent determined a $6,787 deficiency in
petitioners’ Federal income tax for 2003. After concessions,1 we
are asked to decide two issues. First, we are asked to decide
whether petitioner David A. Wilbert (Mr. Wilbert) was away from
1
See infra note 3 for the concessions of each party.
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home when he worked as an airline mechanic for Northwest Airlines
(NWA) in Chicago, Anchorage, and Flushing to determine whether
petitioners are entitled to deduct expenses for his vehicle,
lodging, travel, and meals while Mr. Wilbert was away from
Hudson, Wisconsin, in the Minneapolis area where he normally
lived. We conclude that he was not away from home. Second, we
are asked to decide whether petitioners are entitled to deduct
expenses for cleaning Mr. Wilbert’s uniforms. We conclude that
petitioners are entitled to deduct a portion of these expenses.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
Petitioners resided in Hudson, Wisconsin, at the time they filed
the petition.
Mr. Wilbert’s Employment With Northwest Airlines
Mr. Wilbert began working for NWA in 1996. He began as an
equipment service employee and, about 7 months later, started
working as a mechanic. Mr. Wilbert worked in Minneapolis for
most of his career with NWA.
NWA sent layoff notices to some of its employees when it
experienced financial difficulties. The employees receiving the
notices could either choose to accept the layoff or exercise
their seniority. Seniority depended on the length of time an
employee had worked for NWA, regardless of where the airline
facility was located. An employee with higher seniority could
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bump an employee with less seniority and take that employee’s
position. The employee with less seniority could then take the
layoff or find another employee with less seniority to bump.
This seniority bumping arrangement was in place across the
country, so that an NWA mechanic looking to keep his or her job
at NWA had to look at several different cities to find a less
senior employee to bump.
Mr. Wilbert first received a bump notice on April 6, 2003.
Mr. Wilbert chose to exercise his seniority and bump another
employee rather than accept the layoff. Mr. Wilbert was able to
bump to Chicago, Illinois. Mr. Wilbert began working in Chicago
in mid-April 2003, and he worked there for approximately a week
before being bumped again by a more senior employee.
Mr. Wilbert then bumped to take a position in Anchorage,
Alaska. He started working in Anchorage on April 19, 2003. Mr.
Wilbert worked approximately 3 weeks in Anchorage until he was
bumped again. Mr. Wilbert then bumped to the very last open
position in the NWA system, at LaGuardia Airport in Flushing, New
York. Mr. Wilbert started working at LaGuardia Airport on May
12, 2003, and was laid off on May 19, 2003. Mr. Wilbert had
fully exercised his seniority and there were no junior employees
left to bump.
Mr. Wilbert was unemployed for several weeks. He then
accepted a position as a mechanic for NWA in Anchorage, Alaska.
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He worked in Anchorage, Alaska, from June 12 through November 11,
2003 and again from December 25, 2003, for about 20 months, until
August 2005.2
No NWA position was available in Minneapolis for Mr. Wilbert
to return to once he was laid off from his position in
Minneapolis. He was forced to bump other employees and work in
different cities to stay with NWA. The timing of a return to
Minneapolis depended on NWA’s needs for mechanics in that city as
well as the choices of other mechanics also subject to the
seniority system.
Mr. Wilbert’s wife, petitioner Rebecca Rose Wilbert (Mrs.
Wilbert) stayed in Hudson, Wisconsin, at the family residence
while Mr. Wilbert worked in Chicago, Anchorage, and Flushing.
Mr. Wilbert returned to the family residence as much as possible
while he worked in the other locations, and his wife also went to
visit him occasionally. Mr. Wilbert paid for lodging while he
was working for NWA in Chicago, Anchorage, and Flushing in 2003.
Mr. Wilbert wore a uniform while he worked for NWA. He also
did some real estate work in 2003, but he did not report any
income from this activity in 2003.
2
There is no evidence in the record regarding Mr. Wilbert’s
activities between Nov. 12 and Dec. 24, 2003.
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Petitioners’ Return
Petitioners claimed certain expenses on Schedule A, Itemized
Deductions, on their joint return for 2003. Respondent examined
petitioners’ return for 2003 and issued petitioners a deficiency
notice in which he disallowed many of the expenses. Of the
expenses still in dispute,3 petitioners assert they are entitled
to deduct unreimbursed employee business expenses related to Mr.
Wilbert’s NWA mechanic job. The unreimbursed employee business
expenses petitioners claimed include expenses for Mr. Wilbert’s
vehicle, lodging and pass travel, and meals while he worked in
Chicago, Anchorage, and Flushing. Petitioners also claimed
expenses for cleaning Mr. Wilbert’s uniforms.
Petitioners timely filed a petition.
3
Respondent concedes that petitioners are entitled to deduct
amounts claimed for State and local income taxes, real estate
taxes, home mortgage interest, tax preparation fees, union dues,
equipment, and professional licenses. Respondent also concedes
that petitioners are entitled to deduct portions of the amounts
claimed for “education job,” education supplies, gloves, job-
related software, office supplies, phone, professional
associations, safety boots, and safety equipment, as well as an
ID badge expense petitioners did not originally claim on the
return. Petitioners concede they are not entitled to deduct
amounts they claimed for cash contributions, noncash
contributions, financial publications, flight equipment,
Internet, miscellaneous supplies, certain amounts for tools,
professional publications, safety glasses, and uniform
alterations. Petitioners also concede they are not entitled to
deduct portions of the amounts claimed for “education job,”
education supplies, gloves, job-related software, office
supplies, phone, professional associations, safety boots, and
safety equipment.
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OPINION
The parties resolved many of the disputed expense deductions
before trial. We are asked to determine whether petitioners are
entitled to deduct the remaining expenses. We begin by
considering whether Mr. Wilbert was away from home when he
incurred expenses for his vehicle, lodging, travel, and meals in
Chicago, Anchorage, and Flushing.
Travel Expenses While Away From Home
We begin by briefly outlining the rules for deducting travel
expenses. A taxpayer may deduct reasonable and necessary travel
expenses such as vehicle expenses, meals, and lodging incurred
while away from home in the pursuit of a trade or business.
Secs. 162(a)(2), 262(a).4 A taxpayer must show that he or she
was away from home when he or she incurred the expense, that the
expense is reasonable and necessary, and that the expense was
incurred in pursuit of a trade or business. Commissioner v.
Flowers, 326 U.S. 465, 470 (1946). The determination of whether
the taxpayer has satisfied these requirements is a question of
fact. Id.
The purpose of the deduction for expenses incurred away from
home is to alleviate the burden on the taxpayer whose business
needs require him or her to maintain two homes and therefore
4
All section references are to the Internal Revenue Code in
effect for 2003, and all Rule references are to the Tax Court
Rules of Practice and Procedure, unless otherwise indicated.
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incur duplicate living expenses. Kroll v. Commissioner, 49 T.C.
557, 562 (1968). The duplicate costs are not deductible where
the taxpayer maintains two homes for personal reasons. Sec. 262;
Commissioner v. Flowers, supra at 474.
A taxpayer may deduct the expenses he or she incurred while
away from home. Sec. 162(a)(2). The word “home” for purposes of
section 162(a)(2) has a special meaning. It generally refers to
the area of a taxpayer’s principal place of employment, not the
taxpayer’s personal residence. Daly v. Commissioner, 72 T.C.
190, 195 (1979), affd. 662 F.2d 253 (4th Cir. 1981); Kroll v.
Commissioner, supra at 561-562.
There is an exception to the general rule that a taxpayer’s
tax home is his or her principal place of employment. Peurifoy
v. Commissioner, 358 U.S. 59, 60 (1958). The taxpayer’s tax home
may be the taxpayer’s personal residence if the taxpayer’s
employment away from home is temporary. Id.; Mitchell v.
Commissioner, T.C. Memo. 1999-283. On the other hand, the
exception does not apply and the taxpayer’s tax home remains the
principal place of employment if the employment away from home is
indefinite. Kroll v. Commissioner, supra at 562.
It is presumed that a taxpayer will generally choose to live
near his or her place of employment. Frederick v. United States,
603 F.2d 1292, 1295 (8th Cir. 1979). A taxpayer must, however,
have a principal place of employment and accept temporary work in
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another location to be away from home. Kroll v. Commissioner,
supra. A person who has no principal place of business nor a
place he or she resides permanently is an itinerant and has no
tax home from which he or she can be away. Deamer v.
Commissioner, 752 F.2d 337, 339 (8th Cir. 1985), affg. T.C. Memo.
1984-63; Edwards v. Commissioner, T.C. Memo. 1987-396.
All the facts and circumstances are considered in
determining whether a taxpayer has a tax home. See Rev. Rul. 73-
529, 1973-2 C.B. 37 (describing objective factors the
Commissioner considers in determining whether a taxpayer has a
tax home). The taxpayer must generally have some business
justification to maintain the first residence, beyond purely
personal reasons, to be entitled to deduct expenses incurred
while temporarily away from that home. Hantzis v. Commissioner,
638 F.2d 248, 255 (1st Cir. 1981); Bochner v. Commissioner, 67
T.C. 824, 828 (1977); Tucker v. Commissioner, 55 T.C. 783, 787
(1971). Where a taxpayer has no business connections with the
primary residence, there is no compelling reason to maintain that
residence and incur substantial, continuous, and duplicative
expenses elsewhere. See Henderson v. Commissioner, 143 F.3d 497,
499 (9th Cir. 1998), affg. T.C. Memo. 1995-559; Deamer v.
Commissioner, supra; Hantzis v. Commissioner, supra. In that
situation, the expenses incurred while temporarily away from that
residence are not deductible. Hantzis v. Commissioner, supra;
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Bochner v. Commissioner, supra; Tucker v. Commissioner, supra;
see McNeill v. Commissioner, T.C. Memo. 2003-65; Aldea v.
Commissioner, T.C. Memo. 2000-136.
Once Mr. Wilbert was bumped from Minneapolis, he had no job
to return to there. His choices were to be laid off and have no
work, or to bump other employees and move to different cities to
continue working. NWA no longer required Mr. Wilbert to perform
any services whatsoever in the Minneapolis area once he was
bumped. Although Mrs. Wilbert remained in the family residence
with occasional visits from Mr. Wilbert while Mr. Wilbert worked
in Chicago, Anchorage, and Flushing, this fact alone does not
dictate that Mr. Wilbert’s tax home was in Hudson, Wisconsin,
where the family residence was located. Unlike traveling
salepersons who may be required to return to the home city
occasionally between business trips, Mr. Wilbert’s business ties
to Minneapolis ceased when he was bumped.5
5
Petitioners argue in their reply brief that Mr. Wilbert’s
real estate business in 2003 was operated from the Minneapolis
area and he therefore had a position to return to in the
Minneapolis area. Mr. Wilbert acknowledged at trial, however,
that he did not report any income from this activity in 2003. We
find that Mr. Wilbert’s principal employment in 2003 was with
NWA. We assume that, if it were feasible for Mr. Wilbert to
concentrate solely on real estate activities, he would have
accepted a layoff and returned to the Minneapolis area to pursue
the real estate activity full-time. Mr. Wilbert did not do this,
however. Instead, he continued to travel around the country to
keep his job with NWA. Mr. Wilbert’s real estate activities are
thus not a significant factor in our analysis of Mr. Wilbert’s
tax home.
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The Court understands that the NWA mechanics’ lives were
unsettled and disrupted. Mechanics did not know how long they
would have a job in one specific location. They only knew the
system was based on seniority. They could bump less senior
employees, and they could be bumped by more senior employees.
While we acknowledge that Mr. Wilbert would have liked to return
to the Minneapolis area to work for NWA, Mr. Wilbert did not know
when such a return would be possible due to the seniority system.
The likelihood of Mr. Wilbert’s return to a position in
Minneapolis depended on NWA’s needs for mechanics there as well
as the choices of more senior mechanics. Mr. Wilbert did not
know how long he would be in Chicago, Anchorage, Flushing, or
where he might go next. It was not foreseeable that he would be
able to return to Minneapolis at any time due to the seniority
system. Thus, we conclude there was no business reason for
petitioners to maintain a home in the Minneapolis area.
Petitioners kept the family residence in the Minneapolis area for
purely personal reasons. Petitioners have failed to prove that
Mr. Wilbert had a tax home in 2003. Accordingly, Mr. Wilbert was
not away from home in Chicago, Anchorage, and Flushing, and the
expenses he incurred while there are not deductible.6
6
Even if we had found that Mr. Wilbert’s tax home during
2003 was Hudson, Wisconsin, Mr. Wilbert may not be treated as
temporarily away from home while he worked in Anchorage because
the position lasted over a year. See sec. 162(a).
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Substantiation of Expenses
We next examine whether petitioners are entitled to deduct
expenses for cleaning Mr. Wilbert’s uniforms. We begin by noting
the fundamental principle that the Commissioner’s determinations
are generally presumed correct, and the taxpayer bears the burden
of proving that these determinations are erroneous.7 Rule
142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992);
Welch v. Helvering, 290 U.S. 111 (1933). Moreover, deductions
are a matter of legislative grace, and the taxpayer has the
burden to prove 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); Welch v.
Helvering, supra. This includes the burden of substantiation.
Hradesky v. Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam
540 F.2d 821 (5th Cir. 1976).
A taxpayer must substantiate amounts claimed as deductions
by maintaining the records necessary to establish he or she is
entitled to the deductions. Sec. 6001; Hradesky v. Commissioner,
supra. The taxpayer shall keep such permanent records or books
of account as are sufficient to establish the amounts of
deductions claimed on the return. Sec. 6001; sec. 1.6001-1(a),
7
Petitioners do not claim the burden of proof shifted to
respondent under sec. 7491(a). Petitioners also did not
establish that they satisfy the requirements of sec. 7491(a)(2).
We therefore find that the burden of proof remains with
petitioners.
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(e), Income Tax Regs. The Court need not accept a taxpayer’s
self-serving testimony when the taxpayer fails to present
corroborative evidence. Beam v. Commissioner, T.C. Memo. 1990-
304 (citing Tokarski v. Commissioner, 87 T.C. 74, 77 (1986)),
affd. without published opinion 956 F.2d 1166 (9th Cir. 1992).
In general, all ordinary and necessary expenses paid or
incurred in carrying on a trade or business during the taxable
year are deductible, but personal, living, or family expenses are
not deductible. Secs. 162(a), 262. Services performed by an
employee constitute a trade or business. O’Malley v.
Commissioner, 91 T.C. 352, 363-364 (1988); sec. 1.162-17(a),
Income Tax Regs.
If a taxpayer establishes that he or she paid or incurred a
deductible business expense but does not establish the amount of
the deduction, we may approximate the amount of the allowable
deduction, bearing heavily against the taxpayer whose
inexactitude is of his or her own making. Cohan v. Commissioner,
39 F.2d 540, 543-544 (2d Cir. 1930). For the Cohan rule to
apply, however, a basis must exist on which this Court can make
an approximation. Vanicek v. Commissioner, 85 T.C. 731, 742-743
(1985). Without such a basis, any allowance would amount to
unguided largesse. Williams v. United States, 245 F.2d 559, 560
(5th Cir. 1957).
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Cleaning Expenses for Uniforms
Petitioners claimed $1,022 for cleaning expenses for Mr.
Wilbert’s NWA uniforms. Expenses for uniforms are deductible if
the uniforms are of a type specifically required as a condition
of employment, the uniforms are not adaptable to general use as
ordinary clothing, and the uniforms are not worn as ordinary
clothing. Yeomans v. Commissioner, 30 T.C. 757, 767-769 (1958);
Beckey v. Commissioner, T.C. Memo. 1994-514.
We are satisfied that petitioners incurred deductible
expenses for uniform cleaning. Mr. Wilbert testified that he
needed to clean his uniforms separately from his other laundry,
often in coin-operated-laundry machines. He acknowledged that he
did not have receipts for dry cleaning nor any other
documentation indicating how he arrived at $1,022. Mr. Wilbert
testified that in previous years, it cost him approximately $10
per week to clean his uniforms. Mr. Wilbert also testified it
cost more to clean his uniforms in 2003 than it had previously.
We are permitted to estimate the amount of cleaning expenses for
uniforms under the Cohan rule. We find that $12 per week of
uniform cleaning costs for the approximate 43 weeks that Mr.
Wilbert worked for NWA in 2003 is reasonable. Accordingly, we
find that petitioners are entitled to deduct $516 of cleaning
expenses for uniforms.
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To reflect the foregoing and the concessions of the parties,
Decision will be entered
under Rule 155.