T.C. Summary Opinion 2008-80
UNITED STATES TAX COURT
ROGER A. GREEN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 2253-07S. Filed July 10, 2008.
Roger A. Green, pro se.
Michael Sargent, for respondent.
GOLDBERG, Special Trial Judge: This case was heard pursuant
to the provisions of section 7463 of the Internal Revenue Code in
effect at the time the petition was filed. Pursuant to section
7463(b), the decision to be entered is not reviewable by any
other court, and this opinion shall not be treated as precedent
for any other case. Unless otherwise indicated, subsequent
section references are to the Internal Revenue Code in effect for
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the year in issue, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
Respondent determined a $2,950 deficiency in petitioner’s
Federal income tax for 2004. The issues for decision are: (1)
Whether petitioner is entitled to deduct unreimbursed employee
business expenses for use of his personal vehicle, and (2)
whether petitioner is entitled to deduct unreimbursed employee
business expenses for tools, boots, and clothes for the year in
issue.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. Petitioner resided in
West Virginia when the petition was filed.
Petitioner was employed by W. Harley Miller Contractors
(Harley Miller) of Martinsburg, West Virginia, as a general
construction worker during 2004. Petitioner began working for
Harley Miller in 2003 when he saw an advertisement for
construction workers posted on one of their trucks. Petitioner
applied for a job with the company and traveled to Martinsburg
for his interview. At that time he was unable to find a similar
construction job in Keyser, West Virginia.
Harley Miller assigned petitioner to work on several of its
many job sites within the vicinity of Martinsburg. During the
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year in issue petitioner worked at job sites in Martinsburg and
Spring Mills, and along Interstate Route 81. The Spring Mills
and Interstate Route 81 job sites were near Martinsburg. These
sites were 110 miles, 126 miles, and 136 miles, respectively,
away from petitioner’s home in West Virginia. These jobs
involved the construction and remodeling of middle and high
schools, refurbishment of a State police barracks, and the
construction of an Interstate rest stop area.
Petitioner drove back and forth between his residence and
the work site each day. Petitioner worked long days, often
leaving his home very early in the morning and returning home in
the evenings. He worked every day in 2004 except holidays and
weekends. Petitioner did not stay overnight near the work site
but instead returned to his home each evening to care for his
ailing mother with whom he resided. Petitioner decided not to
relocate his residence to Martinsburg because of his mother’s
declining health.
Harley Miller required petitioner to provide his own work
boots, gloves, bib overalls, and outdoor gear. Petitioner was
also required to bring his own tools to the job site. These
tools consisted of drill sets, hammers, saws, and trowels.
Harley Miller did not reimburse petitioner for any of the
aforementioned items.
Because he often left his home early in the morning,
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petitioner would usually stop for breakfast on his way to work.
Since most of the job sites were in remote areas, petitioner
would usually order out for lunch with the rest of the
construction crew. Harley Miller did not pay for or reimburse
the cost of lunch. Although petitioner kept receipts for his
meals for 2004, he subsequently lost all of these receipts when
he moved from his ex-girlfriend’s residence back to his parents’
home.
Petitioner maintained a mileage log using a pocket calendar
that he kept in his vehicle. At the end of each day, petitioner
would record the total miles that he drove that day. Petitioner
drove an average of 4,742 miles each month in 2004 to and from
his home to the job sites.
Petitioner was employed by Harley Miller until November of
2005 when he was no longer assigned to work on any of the
company’s construction jobs. Petitioner was unemployed at the
time of trial.
For 2004 petitioner deducted $18,756 in vehicle expenses
using the standard mileage rate of 37.5 cents per mile and $1,275
for meals, totaling $20,031.1 He also deducted $190 for boots
and clothes. Petitioner did not claim entitlement to any
1
The $1,275 for the meals expense was the amount after
reduction for the sec. 274(n) 50-percent limitation, and the
$20,031 is the total before the application of the 2-percent
floor provided by sec. 67(a). The $190 is also before the
application of the 2-percent floor.
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deduction for unreimbursed employee business expenses related to
tools on his 2004 return. In the notice of deficiency respondent
disallowed all of the aforementioned deductions.
Discussion
Taxpayers generally bear the burden of proving that the
Commissioner’s determinations are incorrect. Rule 142(a).
However, section 7491(a) may in specific circumstances place the
burden on the Commissioner with regard to any factual issue
relating to the taxpayer’s liability for tax if the taxpayer
produces credible evidence with respect to that issue and meets
the requirements found in section 7491(a)(2). The taxpayer bears
the burden of proving that he has met the requirements of section
7491(a)(2)(A) and (B) by substantiating items, maintaining
required records, and fully cooperating with the Secretary’s
reasonable requests. Miner v. Commissioner, T.C. Memo. 2003-39;
Nichols v. Commissioner, T.C. Memo. 2003-24, affd. 79 Fed. Appx.
282 (9th Cir. 2003).
Neither party raised section 7491 as an issue. Although we
find that petitioner did substantiate some of his claimed vehicle
expenses, he did not comply fully with respondent’s requests for
that documentation before trial. Since petitioner has not met
the requirements of section 7491(a)(2), we find that the burden
of proof remains with him.
The foremost issue--the determination of petitioner’s tax
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home--is a legal one, and our decision with respect to that issue
is unaffected by section 7491. See Estate of Bongard v.
Commissioner, 124 T.C. 95, 111 (2005).
Petitioner deducted the vehicle expenses at issue,
contending that they were ordinary and necessary business
expenses incurred when Harley Miller assigned him to work at one
of its job sites. Respondent contends that petitioner’s work
outside the area of his residence was a permanent situation and
that he made a personal (nonbusiness) choice to drive to and from
work rather than to move closer to his employer’s headquarters
and/or its job sites. In effect, respondent’s argument is that
petitioner’s tax home was where he normally worked and that his
trips constituted commuting.
In general, a taxpayer may deduct ordinary and necessary
expenses paid or incurred in connection with the operation of a
trade or business. Sec. 162(a); Boyd v. Commissioner, 122 T.C.
305, 313 (2004). A trade or business includes the trade or
business of being an employee. O’Malley v. Commissioner, 91 T.C.
352, 363-364 (1988). For such expenses to be deductible, the
taxpayer must not have the right to obtain reimbursement from his
employer. See Orvis v. Commissioner, 788 F.2d 1406, 1408 (9th
Cir. 1986), affg. T.C. Memo. 1984-533.
Vehicle Expenses
Section 262 disallows any deduction for personal, living, or
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family expenses. Transportation expenses ordinarily incurred
between one’s residence and one’s principal place of business (a
job site) are typically referred to as “commuting expenses” and
are nondeductible personal expenses under section 262. Fausner
v. Commissioner, 413 U.S. 838 (1973); Commissioner v. Flowers,
326 U.S. 465 (1946).
A taxpayer whose principal place of business is at a
distance from his residence cannot deduct the cost of the travel
to and from the business or the costs of meals and lodging at the
place of business. Such expenses are regarded as personal
commuting expenses and are not deductible under section 262.
Fausner v. Commissioner, supra; Commissioner v. Flowers, supra.
Under an exception to this rule, a taxpayer may deduct travel
expenses associated with employment that is temporary (as opposed
to indefinite) in duration when the taxpayer is away from home.
Sec. 162(a)(2); Peurifoy v. Commissioner, 358 U.S. 59 (1958).
Travel away from home generally requires that the taxpayer remain
away either overnight or for a period requiring sleep or rest.
United States v. Correll, 389 U.S. 299 (1967). Temporary
employment has been defined as that which is forseeably
terminable or lasting for a relatively short, fixed duration.
Boone v. United States, 482 F.2d 417, 419 (5th Cir. 1973).
Whether a taxpayer’s job is temporary or indefinite is determined
by the facts and circumstances of each case. Peurifoy v.
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Commissioner, supra at 61.
A judicially and administratively recognized exception to
the prohibition of deducting commuting expenses applies when the
taxpayer’s job is temporary as opposed to indefinite. See
McCallister v. Commissioner, 70 T.C. 505 (1978); Rev. Rul. 99-7,
1999-1 C.B. 361. As relevant here, because petitioner’s vehicle
expenses were for daily transportation, they are deductible if
his employment was temporary. Under this exception these
expenses must be substantiated under section 274(d)(4) rather
than section 274(d)(1).
We are convinced that petitioner accepted his position with
Harley Miller knowing that the company was headquartered in
Martinsburg (110 miles from Keyser) and that most, if not all, of
the possible job sites to which he could be assigned would be
near Martinsburg. Moreover, while we appreciate that all of the
jobs that petitioner worked on in 2004 were by themselves
temporary, we are convinced that petitioner’s employment with
Harley Miller was indefinite and that petitioner was aware that
Harley Miller would assign him to job sites predominantly in the
vicinity of Martinsburg and more than 100 miles from Keyser.
On the basis of the entire record, we agree with respondent
that petitioner made a personal decision to accept employment
with Harley Miller knowing that the location of the company and
its job sites were a considerable distance away from Keyser.
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While we are sympathetic as to the exact nature of petitioner’s
personal reason for commuting to and from the job site each day,
we cannot ignore that it was for this personal reason that
petitioner chose not to move his residence to be near the
principal place of his employment. Accordingly, petitioner is
not entitled to deduct the vehicle expenses at issue for 2004.
Unreimbursed Employee Business Expenses
As previously stated, a taxpayer generally cannot deduct
personal, living, or family expenses. Sec. 262(a). Costs of
articles of clothing, including boots, are deductible only if the
clothing is required in the taxpayer’s employment, is not
suitable for general or personal wear, and is not worn for
general or personal purposes. Yeomans v. Commissioner, 30 T.C.
757, 767-768 (1958); Nicely v. Commissioner, T.C. Memo. 2006-172.
Petitioner contends that he spent a total of $190 for
clothing and boots and $400 for tools in 2004. Petitioner’s
testimony as to the boots was vague, although he did provide the
Court with a photograph of the boots that he wore for 2004. He
did not establish whether or how the boots at issue were not
suitable for general or personal wear. Petitioner did not
provide photographs of the clothing that he was required to wear
at work, and he did not explain whether or how the clothing at
issue differed from clothing suitable for general or personal
wear. Therefore, we are not convinced that either the work boots
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or the clothing petitioner wore were unsuitable for general or
personal wear. Accordingly, petitioner is not entitled any
deduction for 2004 with respect to boots and clothing.
As previously stated, petitioner did not claim entitlement
to any deduction for unreimbursed employee business expenses
related to tools on his 2004 return. Petitioner raised these
expenses at trial, and respondent (who may have incorrectly
assumed such expenses had, in fact, been claimed on the return)
argued that petitioner was not entitled to any amount for tools
for lack of substantiation. Petitioner acknowledged that he had
no receipts for any of the tools purchased during 2004. Although
petitioner did provide photographs of his tools to the Court, he
acknowledged that the photographs were merely representative of
the tools that Harley Miller required him to purchase and not the
tools that he actually purchased in 2004. Petitioner testified
that he did purchase a drill set, hammers, trowels, and a Hilti
gun in 2004. As to the hammers purchased, he testified that they
were manufactured by Estwing and cost him $30 apiece. Although
petitioner did not testify as to exactly how many Estwing hammers
he purchased in 2004, we are satisfied that he purchased at least
two hammers during that year.
We are likewise satisfied that petitioner was required to
purchase other tools for his job and that he did purchase some of
these tools in 2004. We are not convinced, however, that
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petitioner incurred a $400 expense for such tools for 2004.
If a taxpayer establishes that he 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 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).
We are satisfied that petitioner incurred deductible
expenses during 2004 for the purchase of two Estwing hammers.
Although we are permitted to estimate the amount of tool expenses
under the Cohan rule, we lack any evidence of basis as to the
other tools purchased. Accordingly, we find that petitioner is
entitled to deduct $60 of expenses for tools. However, since the
standard deduction is greater than petitioner’s deductions
allowable on Schedule A, Itemized Deductions, respondent’s
determination that petitioner is entitled to the standard
deduction is sustained.
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To reflect the foregoing,
Decision will be entered
for respondent.