Opinion
Docket No. 2666-68.
1970-03-30
HOLLIE T. DEAN AND EUNICE J. DEAN, PETITIONERS v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT
Hollie T. Dean, pro se. Arnold E. Kaufman, for the respondent.
Hollie T. Dean, pro se. Arnold E. Kaufman, for the respondent.
Taxpayer was a construction worker who maintained a home in Williamsport, Md. During the taxable year petitioner had temporary employment with three different employers doing construction work at Chalk Point, Md., Front Royal, Va., and Landover, Md. These jobs were obtained by petitioner through a labor union which had its office in Washington, D.C. In his income tax return for the taxable year petitioner deducted ‘away from home living expense for temporary assignment’ in connection with each of the three temporary jobs. In his return he stated that his ‘tax home’ was the union headquarters in Washington. Respondent disallowed the deduction claimed in connection with the Landover employment since it was in the vicinity of Washington. At the trial petitioner disavowed the statement in the return that his ‘tax home’ was Washington. Held, petitioner's ‘tax income’ was not in Washington and respondent erred in disallowing the claimed deduction.
Respondent determined a deficiency in petitioner's Federal income tax for the year 1965 in the amount of $194.06. The issue presented for decision is whether certain transportation, meals, and lodging expenditures incurred by petitioner Hollie T. Dean are deductible as business expenses incurred ‘while away from home’ within the meaning of section 162(a)(2), I.R.C. 1954.
Hereafter all section references are to the Internal Revenue Code of 1954, unless otherwise indicated.
FINDINGS OF FACT
Some of the facts are stipulated. The stipulation and the attached exhibits are incorporated herein by this reference.
Petitioners Hollie T. Dean and Eunice J. Dean are husband and wife with their established place of residence at all times relevant herein being Williamsport, Md. Hollie T. Dean will be sometimes hereinafter referred to as petitioner. Petitioner and his wife filed their joint income tax return for the calendar year 1965 with the district director of internal revenue, Baltimore, Md.
Petitioner is a millwright welder and mechanic principally employed on construction projects for temporary or indefinite periods of time. From 1953 through 1958 most of petitioner's employment was within an area close to his residence. From 1959 until the time of trial of this case petitioner has been a member of local No. 1831, Carpenters and Joiners of America, a union which also included millwrights in its membership and which had its office in Washington, D.C. During 1959 petitioner obtained most of his employment contracts with construction firms as a result of referrals by local No. 1831 in Washington, D.C. During 1960 through 1962 petitioner obtained most of his employment contracts by his personal efforts elsewhere. During 1963 through 1965 petitioner obtained all of his employment contracts (except three) through local No. 1831 in Washington, D.C., including all three jobs upon which he was employed in 1965. Petitioner's residence in Williamsport, Md., is about 80 miles northwest of downtown Washington, D.C.
An agreement between the Construction Contractors Council and the Carpenter's District Council both of Washington, D.C., which was in effect from April 30, 1963, to May 1, 1966, and which applied by its terms to millwright members of local No. 1831 provided inter alia
that the employers (represented by the Construction Contractors Council) should employ, ‘as far as possible,‘ qualified workmen without discriminating against members of the United Brotherhood of Carpenters and Joiners of America and that ‘when requested, the Union agrees to supply the employers with qualified carpenters and apprentices to the extent of its ability.’
Among the alia were provisions relative to hours and conditions of work.
Another provision of the contract stated that the millwrights in local No. 1831 were to be paid the following amounts as travel allowance:
Sec. 8. Travel allowance shall be paid at the following rate:
A. From 10 to 20 miles beyond the District of Columbia Line, $1.20 per day.
B. From 20 to 30 miles beyond the District of Columbia Line, $2.40 per day.
C. From 30 or more miles beyond the District of Columbia Line, $3.00 per day.
The contract also provided that the ‘territorial lines' covered in the agreement were as follows:
Washington, D.C., Cities of Alexandria and Falls Church, Virginia, Counties in Virginia: Arlington, Frederick, Clarke, Loudoun, Shenandoah, Warren, Fauquier, Page, Rappahannock, Prince William, Fairfax, Culpeper, Stafford, Orange, Spotsylvania, King George, Caroline and Westmoreland. Beginning at Colonial Beach in Westmoreland County, straight line through Westmoreland, King George and Caroline Counties to town of Bowling Green. Then on a straight line from Bowling Green to Southern tip of Spotsylvania County. All Northern part of Westmoreland, King George and Caroline Counties from points mentioned. From intersection of Madison and Culpeper Counties and all other Counties listed above.
City of Annapolis, Maryland, and that part of Anne Arundel County, Maryland, Election District three (3), South of a straight line as near as possible, from a point at Rock Creek to Pasadena to Benfield, all of Election Districts in Maryland, two (2), one (1), seven (7), eight (8). Beginning at Priest's Bridge in Election District two (2) on Patuxent River— all territory on side of Patuxent River towards District of Columbia and follow Patuxent River to Laurel, Maryland. All of Prince Georges, Montgomery, Calvert, Charles and St. Mary's Counties in Maryland.
Petitioner's records showed the dates and locations of his employment during the years 1953 through 1965 to be as follows:
+-------------------------------------------------------------------------+ ¦ ¦ ¦ ¦Total¦ +----+------------------+-------------------------------------------+-----¦ ¦Year¦Date of employment¦Location ¦days ¦ +----+------------------+-------------------------------------------+-----¦ ¦1952¦Oct. 14-Dec. 31 ¦Martinsburg, W. Va ¦78 ¦ +----+------------------+-------------------------------------------+-----¦ ¦1953¦Jan. 1-Dec. 31 ¦Martinsburg, W. Va ¦365 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Jan. 1-July 25 ¦Martinsburg, W. Va ¦206 ¦ +----+------------------+-------------------------------------------+-----¦ ¦1954¦(Aug. 18-Aug. 20 ¦Verona, Va ¦3 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Sept. 24-Dec. 10 ¦Portsmouth, Va ¦77 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Jan. 30-May 29 ¦Hopewell, Va ¦119 ¦ +----+------------------+-------------------------------------------+-----¦ ¦1955¦(July 31-Dec. 31 ¦Martinsburg, W. Va ¦153 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Jan. 1-Jan. 10 ¦Martinsburg, W. Va ¦9 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Feb. 28-Mar. 27 ¦Sparrows Point, Md ¦27 ¦ +----+------------------+-------------------------------------------+-----¦ ¦1956¦(May 22-Oct. 2 ¦Cumberland, Md ¦133 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Oct. 10-Dec. 5 ¦Front Royal, Va ¦56 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Dec. 18-Dec. 31 ¦Williamsport, Md ¦13 ¦ +----+------------------+-------------------------------------------+-----¦ ¦1957¦Jan. 1-Dec. 31 ¦Williamsport, Md ¦365 ¦ +----+------------------+-------------------------------------------+-----¦ ¦1958¦Jan. 1-Nov. 25 ¦Williamsport, Md ¦329 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Jan. 12-Feb. 18 ¦Washington, D.C. ¦37 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Mar. 9-May 6 ¦Dickerson, Md ¦58 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(May 16-June 20 ¦Washington, D.C. ¦34 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(July 8-July 22 ¦Washington, D.C. ¦14 ¦ +----+------------------+-------------------------------------------+-----¦ ¦1959¦(Aug. 5-Aug. 31 ¦Wilmington, Del ¦26 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Sept. 8-Sept. 29 ¦Alexandria, Va ¦21 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Oct. 19-Oct. 24 ¦Carderock, Md ¦5 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Dec. 1-Dec. 13 ¦Winchester, Baileys C.R., and Silver Spring¦13 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Dec. 6-Dec. 31 ¦Luke, Md ¦25 ¦ +----+------------------+-------------------------------------------+-----¦ ¦1960¦Jan. 1-Dec. 31 ¦Luke, Md ¦365 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Jan. 1-May 7 ¦Luke, Md ¦127 ¦ +----+------------------+-------------------------------------------+-----¦ ¦1961¦(May 31-Dec. 31 ¦Hagerstown, Md ¦215 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Jan. 1-May 25 ¦Hagerstown, Md ¦145 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(June 28-July 13 ¦Sparrows Point, Md ¦15 ¦ +----+------------------+-------------------------------------------+-----¦ ¦1962¦(July 16-Sept. 20 ¦Hagerstown, Md ¦33 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(July 16-Oct. 9 ¦Hagerstown, Md ¦56 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Dec. 4-Dec. 18 ¦Alexandria, Va ¦14 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Jan. 19-Jan. 23 ¦Hagerstown, Md ¦4 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Jan. 31-May 23 ¦Chalk Point, Md ¦112 ¦ +----+------------------+-------------------------------------------+-----¦ ¦1963¦(June 12-June 19 ¦Hagerstown, Md ¦7 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(June 20-Dec. 31 ¦Chalk Point, Md ¦194 ¦ +----+------------------+-------------------------------------------+-----¦ ¦1964¦Jan. 1-Dec. 31 ¦Chalk Point, Md ¦365 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(Jan. 1-Feb. 26 ¦Chalk Point, Md ¦57 ¦ +----+------------------+-------------------------------------------+-----¦ ¦1965¦(Mar. 8-May 6 ¦Front Royal, Va ¦59 ¦ +----+------------------+-------------------------------------------+-----¦ ¦ ¦(June 7-Dec. 2 ¦Landover, Md ¦178 ¦ +-------------------------------------------------------------------------+
Petitioner's employer during the period of January 1 to February 26, 1965, was the Bechtel Corp. which was engaged in the construction of a power station at Chalk Point, Md., approximately 40 miles south of Washington. During the period March 8 to May 6, 1965, his employer was the Rust Engineering Co. and his place of employment was at Front Royal, Va., approximately 75 miles from Washington. During the period June 7 to December 2, 1965, petitioner's employer was the Spivey Co. which was doing some construction work at Landover, Md., and also at Silver Spring, Md., and at 17th and I Streets NE., Washington, D.C. Petitioner worked only a few days at these two latter places; the rest of this time of employment by the Spivey Co. he worked at Landover, which was approximately 6 miles from the District of Columbia. Williamsport, Md., where petitioner resides, is located approximately 5 miles south of Hagerstown. Front Royal is approximately 54 miles from Williamsport and Chalk Point is approximately 120 miles from Williamsport.
It is conceded that petitioner's employment at Chalk Point, at Front Royal, and at Landover during 1965 was temporary.
In petitioner's income tax return for 1965 he deducted as ‘employee business expenses' the sum of $1,884.54. This represents a total sum made up of $1,189.15 on account of ‘away from home living expense for temporary assignment’ in connection with his employment at Landover, $356.84 on account of ‘away from home living expense for temporary assignment’ in connection with his employment at Chalk Point, and $349.55 on account of ‘away from home living expense for temporary assignment’ in connection with his employment at Front Royal. In three statements attached to the return he stated that he was ‘a member of Local 1831, C & J of A., Washington, D.C.‘ and that his ‘tax home is the District of Columbia 10th & K St . Headquarters.’
While petitioner was employed by the Spivey Co. at Landover, Md., he spent the total sum of $1,183.15 for meals, lodging, and travel. During that time petitioner rented lodging facilities in a roominghouse near Rhode Island and South Dakota Avenues in the District of Columbia. Petitioner obatined his meals at restaurants near the roominghouse. The jobsite where petitioner worked in Landover, Md., was less than 6 miles from the District of Columbia Line. Petitioner received no travel allowance pursuant to the union contract while employed by the Spivey Co.
In his statutory notice of deficiency, respondent disallowed the deduction to the extent of $1,183.15, the amount attributed to petitioner's employment with the Spivey Co.
OPINION
KERN, Judge:
Section 162(a) provides in part that ‘There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including— * * * (2) traveling expenses (including amounts expended for meals and lodging * * * ) while away from home in pursuit of a trade or business.’
If it had not been for petitioner's statements attached to his income tax return for the taxable year in which he reiterated the assertion that his ‘tax income’ was located at the headquarters of his union in Washington, D.C., rather than at his place of residence at Williamsport, Md., we doubt that this case would ever have arisen. Since he did make these assertions and since it was apparent that the expenses incident to the Landover employment were incurred in the vicinity of his claimed ‘tax home’ in Washington the respondent disallowed the deduction of such expenses.
At the trial of this case the petitioner disavowed the assertions that his ‘tax home’ was in Washington and the fact stipulated and established by the record herein persuade us that petitioner's legal conclusions with regard to his ‘tax home’ asseverated in the statements above referred to were erroneous.
Petitioner had three places of employment during the taxable year. All of them were away from his home which was in Williamsport, Md.
However, respondent concedes that his employment at all three places was temporary.
The parties are in agreement that petitioner maintained a home at all times at Williamsport, where his family lived throughout the taxable year and where petitioner lived on weekends and during that part of the year when he was not employed at Front Royal, Chalk Point, or Landover. Accordingly we do not have the problem involved in those cases where the taxpayers had no permanent home. See Irving R. Sapson, 49 T.C. 636, and cases cited.
In Ronald D. Kroll, 49 T.C. 557, 564-565, we stated the rule to be ‘that when a taxpayer maintains a residence away from the vicinity of his nontemporary principal place of business, that residence is not his home within the meaning of section 162.’ The corollary of this is that where a taxpayer does not have a nontemporary principal place of business away from the vicinity of his residence, then his place of residence remains his home for tax purposes.
Respondent's learned counsel, although obviously surprised at the trial herein by petitioner's change of position from an insistence that his ‘tax home’ was the union headquarters in Washington to a contention that his one and only home for all purposes was Williamsport, continued his defense of the deficiency determined herein by advancing the argument that the union headquarters in Washington constituted petitioner's ‘principal place of business, employment, or post or station at which he was employed.'
Only if we should agree with this argument of respondent and should conclude that petitioner's ‘tax home’ was Washington, D.C., would it be possible to decide in favor of respondent on the record before us. We are unable to agree with respondent's argument on this point or to reach the conclusion that Washington was petitioner's ‘tax home.’
A quotation from Floyd Garlock, 34 T.C. 611, 614.
It appears that officers of petitioner's union functioning at the union headquarters in Washington were helpful and even instrumental in obtaining employment for petitioner during the taxable year. However petitioner worked and created income by his various employments not in Washington but in Chalk Point, Front Royal, and Landover.
It was in those places rather than Washington that petitioner had a place of business, a place of employment, or a ‘post or station at which he was employed.’ Since these were temporary places of business and employment, petitioner's residence did not cease to be ‘his home within the meaning of section 162.’ Therefore Washington was not his ‘tax home’ and his expenses incident to the Landover employment were not incurred in the vicinity of his ‘tax home.’
As part of the Landover job petitioner worked a few days in Washington. In our opinion this circumstance may be dismissed as de minimis.
Decision will be entered for the petitioner.