T.C. Memo. 2008-131
UNITED STATES TAX COURT
AUSTIN D. YANKE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 22120-05. Filed May 15, 2008.
Austin D. Yanke, pro se.
John D. Davis, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
SWIFT, Judge: Respondent determined a $4,812 deficiency in
petitioner’s 2001 Federal income tax.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for 2001.
The issue for decision is the deductibility of $27,294 in
travel expenses (including meal and lodging expenses) petitioner
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incurred in California while training to qualify as a journeyman
electrical power lineman.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
At the time the petition was filed, petitioner resided in
Idaho, a resident of the same home in which petitioner was
raised. In 1997, petitioner graduated from high school.
In 1998, petitioner enrolled at the Northwest Lineman
College in Meridian, Idaho, in a 3-month course offering training
to become an electrical power lineman (lineman). Upon completion
of this course, petitioner joined the Boise local union of the
International Brotherhood of Electrical Workers (IBEW) as an
apprentice lineman.
In August 1999, to qualify as a journeyman lineman and also
to seek employment in California, which offered more employment
opportunities for union linemen than were available in Idaho (a
right-to-work State), petitioner enrolled in a California/Nevada-
based (Cal/Nev) journeyman lineman training program sponsored by
the National Electrical Contractors Association (NECA) and by
IBEW. A similar IBEW and NECA-sponsored program was available to
petitioner in Idaho, but petitioner chose to enroll in the
Cal/Nev program.
The Cal/Nev journeyman lineman training program, which
petitioner began in August 1999, lasted 3-1/2 years.
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Participants in the program were required to work for various
electrical power companies in California and/or Nevada during the
entire 3-1/2 years.
As part of the journeyman lineman training program in which
petitioner enrolled and on the basis of the employment needs of
NECA contractors located in California and Nevada, the linemen,
including petitioner, were assigned to work with contractors at
particular job sites. When a job was finished and the contractor
no longer needed the linemen, the linemen were reassigned to
another NECA contractor in California or Nevada. Petitioner was
assigned work only in California.
The schedule below indicates the dates of petitioner’s
employment during his journeyman lineman training, the contractor
for whom petitioner worked, if known, and the California cities
in which petitioner’s job sites were located:
Dates of Employment Contractor Location of Job Site
Jan.--Apr. 2000 --- San Diego
May--July 2000 --- Moorepark
Aug.--Oct. 2000 Hot Line Construction Valencia
Jan.--Apr. 2001 Hot Line Construction Valencia
June--July 2001 Hot Line Construction Valencia
Aug.--Nov. 2001 Par Electrical Pacifica
Jan. 2002 Par Electrical Pacifica, Bakersfield, &
Sacramento
Feb. 2002 --- Sacramento, Lakeport, &
Chico
Mar.--May 2002 --- Chico & Ukiah
June--July 2002 --- Ukiah & Grass Valley
Aug.--Oct. 2002 --- Grass Valley & Willits
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In 2001 and over the years, petitioner has maintained a room
in his parents’ home in Boise, in which petitioner has kept
clothes and furniture, and petitioner has parked on his parents’
property a motorcycle, a boat, and two snowmobiles.
During his journeyman lineman training in California and
through the end of 2002, petitioner lived in a fifth-wheel travel
trailer which he parked near each job site. When a job was
finished or when he was given time off, petitioner often would
return to his parents’ home in Boise until he was notified of his
next job site in California. In 2001, petitioner spent
approximately 45 days in Boise and the balance of his time in
California working at job sites.
The evidence is unclear as to whether petitioner paid rent
to his parents for use of the room he maintained in his parents’
home in 2001.
In the fall of 2002, upon qualifying as a journeyman
lineman, petitioner committed to maintaining his union membership
as a journeyman lineman for at least the following 4 years during
which petitioner committed to working only for union-approved
contractors wherever employed in the United States.
For the journeyman lineman training in California,
petitioner paid no tuition or other fees, and while being trained
in California as a journeyman lineman petitioner received wages
for his work with the NECA contractors. If, however, during the
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4-year period following qualification as a journeyman lineman,
petitioner worked for a nonunion contractor, petitioner would be
required to repay the cost of his journeyman lineman training
program.
In 2002, shortly after qualifying as a journeyman lineman,
petitioner added his name to a list of union journeyman linemen
available for work in the Boise area. Petitioner, however,
continued to work in California as a union journeyman lineman
until July 2004.
In August 2004, petitioner took a union job as a journeyman
lineman in Idaho, and during the remainder of 2004 and into
January 2005 petitioner worked in Idaho.
Petitioner paid Idaho State income taxes on the wages
petitioner earned in California in 2001. Petitioner maintained
an Idaho driver’s license and an Idaho fishing license, but
petitioner did not own any real property in Idaho.
On petitioner’s 2001 Federal income tax return, petitioner
deducted $27,294 as ordinary and necessary business expenses he
had incurred in 2001 for travel, meals, and lodging relating to
his training and his work in California. On audit, respondent
disallowed all $27,294 as personal, nonbusiness expenses.
On their joint Federal income tax return for 2001,
petitioner’s parents did not report any rental income from
petitioner. On their joint Federal income tax return for 2002,
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petitioner’s parents reported rental income from petitioner of
$2,400.
OPINION
Under section 162(a)(2), a taxpayer is allowed a deduction
for travel expenses, including meal and lodging expenses, if the
expenses are ordinary and necessary, incurred while away from
home, and incurred in the pursuit of a trade or business.
Commissioner v. Flowers, 326 U.S. 465, 470 (1946). Respondent
only challenges whether petitioner was “away from home” when he
incurred the expenses in dispute.
The primary reason for the allowance of a deduction for
travel expenses under section 162(a)(2) is to alleviate the
burden on a taxpayer whose business needs require him to maintain
two places of abode and to therefore incur duplicate living
expenses. Kroll v. Commissioner, 49 T.C. 557, 562 (1968).
For purposes of section 162(a)(2), generally a taxpayer’s
“home” (or tax home) means the vicinity of the taxpayer’s
principal place of business or employment. Mitchell v.
Commissioner, 74 T.C. 578, 581 (1980); see Coombs v.
Commissioner, 608 F.2d 1269, 1275 (9th Cir. 1979), affg. in part
and revg. in part 67 T.C. 426 (1976). When different from the
vicinity of his principal place of employment, a taxpayer’s
residence may be treated as his tax home if his principal place
of business is “temporary”, rather than “indefinite”. See
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Peurifoy v. Commissioner, 358 U.S. 59, 60 (1958); Kroll v.
Commissioner, supra at 562.
However, a taxpayer may be treated as an itinerant taxpayer,
as never “away from home”, and therefore as not entitled to
travel expense deductions under section 162(a)(2). See James v.
United States, 308 F.2d 204, 208 (9th Cir. 1962); Barone v.
Commissioner, 85 T.C. 462, 465 (1985), affd. without published
opinion 807 F.2d 177 (9th Cir. 1986).
In determining whether a taxpayer has a fixed tax home,
courts consider three factors set forth in Rev. Rul. 73-529,
1973-2 C.B. 37, 38, as follows: (1) Whether there existed a
business connection to the location of the alleged tax home, (2)
whether duplicate living expenses were incurred while traveling
and while maintaining the alleged tax home, and (3) whether
personal connections existed to the alleged tax home. See
Henderson v. Commissioner, 143 F.3d 497, 500 (9th Cir. 1998),
affg. T.C. Memo. 1995-559.
This Court, as well as the U.S. Court of Appeals for the
Ninth Circuit, requires that a taxpayer must have some business
justification beyond merely personal reasons for maintaining an
alleged tax home remote from a place of employment. See id.;
Tucker v. Commissioner, 55 T.C. 783, 787 (1971). Where a
taxpayer has no business connection to a remotely located alleged
tax home, claimed section 162(a)(2) travel expense deductions
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generally will be denied. See Henderson v. Commissioner, supra
at 500; Tucker v. Commissioner, supra at 787.
Mere “hopes” of some day returning to an alleged tax home
and finding employment, particularly where job opportunities are
“bleak”, is not sufficient to provide the necessary business
connection to an alleged tax home. Kaye v. Commissioner, T.C.
Memo. 1974-111; see Tucker v. Commissioner, supra at 786; Wright
v. Commissioner, T.C. Memo. 1991-280; Linn v. Commissioner, T.C.
Memo. 1984-324.
On the facts before us, we conclude that petitioner in 2001
did not have a reasonable business reason or justification for
maintaining a tax home in Boise and that his visits to Boise in
2001 for approximately 45 days were not motivated by business
reasons. In August 1999, petitioner enrolled in the journeyman
lineman training program knowing that for the next 3-1/2 years he
would be working with contractors only in California and/or
Nevada. Petitioner acknowledged at trial that his employment
prospects in Boise were not good in light of Idaho’s right to
work laws and petitioner’s commitment to work only for union
contractors for 4 years after the journeyman lineman training.
In 2001, petitioner’s business connections to Boise were
tenuous and preclude a finding that the room petitioner
maintained in his parents’ home was maintained for anything other
than personal reasons.
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In addition, the record does not establish that petitioner
had “substantial continuing living expenses” in Boise that
duplicated his travel expenses in California. See James v.
United States, supra at 207-208; see Rev. Rul. 73-529, supra. No
copies of checks, bank statements, or other documents were
presented at trial that would indicate that petitioner in 2001
incurred significant Boise housing expenses in addition to his
travel expenses in California, and petitioner’s parents did not
report any rental income on their 2001 return.
From 1999 to 2003, petitioner did not perform any work in
Idaho, and petitioner earned all of his income from work in
California. See Jeppsen v. Commissioner, T.C. Memo. 1978-343.
In Henderson v. Commissioner, supra, the U.S. Court of
Appeals for the Ninth Circuit affirmed a Memorandum Opinion of
this Court and found that a traveling stagehand spent personal
time between jobs at his parents’ home in Boise. Boise was not
treated as the taxpayer’s tax home because during the year in
issue he had no business or employment connection to Boise, and
he had no significant duplicate travel expenses. Despite ties to
Boise (e.g., Idaho driver’s license, payment of Idaho State
income tax, bank accounts in Idaho, Idaho voter registration, and
storage of belongings in his parents’ home in Boise), we and the
U.S. Court of Appeals for the Ninth Circuit denied the taxpayer’s
claimed business deductions for travel expenses. Id. at 498. In
our Memorandum Opinion in Henderson we stated:
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In sum, we conclude that petitioner cannot claim that
Boise, Idaho, was his home for the purposes of section
162(a)(2). While he did spend his idle time there, the
source of his employment had no connection with Boise.
Moreover, petitioner’s minimal financial contribution
to his parents’ home does not lead to the conclusion
that he incurred substantial, continuous, and
duplicative expenses. [Henderson v. Commissioner, T.C.
Memo. 1995-559; fn. ref. omitted.]
In light of petitioner’s lack of business reasons for
maintaining a tax home in Boise, petitioner’s failure to incur
substantial duplicate living expenses in Boise, and our decision
and the decision of the U.S. Court of Appeals for the Ninth
Circuit in Henderson, we conclude that in 2001 petitioner did not
have a tax home in Boise, Idaho, for purposes of section
162(a)(2). Petitioner’s claimed $27,294 in travel expense
deductions is denied.
This case is decided on the preponderance of the evidence,
and is unaffected by section 7491. See Estate of Bongard v.
Commissioner, 124 T.C. 95, 111 (2005).
To reflect the foregoing,
Decision will be entered
for respondent.