Comm'r of Internal Revenue

Tax Court of the United States.Sep 15, 1969
52 T.C. 964 (U.S.T.C. 1969)

Docket Nos. 668-68 669-68 690-68— 692-68 797-68.



George Bouchard, for the petitioners. Donald P. Chehock, for the respondent.

George Bouchard, for the petitioners. Donald P. Chehock, for the respondent.

Petitioners are civilian employees at Vandenberg Air Force Base. Since they are not permitted to live on the base, they reside in surrounding communities. Petitioners seek to deduct their automobile expenses incurred in traveling the distance between the base and the habitable community nearest to the base. Held, such expenses are commuting expenses and are not deductible under sec. 162, I.R.C. 1954.

FAY, Judge:

Respondent determined deficiencies in petitioners' Federal income taxes for the calendar year 1965 in the following amounts:

+-------------------------------------------------------------+ ¦Docket No. ¦Petitioners ¦Deficiency ¦ +------------+-----------------------------------+------------¦ ¦668-68 ¦Raymond A. and Vadna M. Sanders ¦$119 ¦ +------------+-----------------------------------+------------¦ ¦669-68 ¦Raymond Degn ¦263 ¦ +------------+-----------------------------------+------------¦ ¦690-68 ¦Kevin O. and Geraldine M. Blackwell¦159 ¦ +------------+-----------------------------------+------------¦ ¦691-68 ¦Paul J. and Virginia Lowrey ¦126 ¦ +------------+-----------------------------------+------------¦ ¦692-68 ¦Charles G. Jr., and Mary A. Boyd ¦290 ¦ +------------+-----------------------------------+------------¦ ¦797-68 ¦Frank J. and Dorothy A. Barry ¦108 ¦ +-------------------------------------------------------------+

The only issue for decision is whether amounts expended by petitioners in traveling to and from their employment at Vandenberg Air Force Base and claimed as deductions on their 1965 Federal income tax returns are deductible business expenses under section 162 or nondeductible commuting expenses under section 262.

All statutory references herein are to the Internal Revenue Code of 1954, unless otherwise indicated.


Some of the facts have been stipulated and are so found. The stipulations of facts, together with the exhibits attached thereto, are incorporated herein by this reference.

Raymond A. Sanders (Sanders) and Vadna M. Sanders are husband and wife. Frank J. Barry (Barry) and Dorothy A. Barry are husband and wife. All four of these petitioners resided in Lompoc, Calif., at the time their petitions in this case were filed. Each couple filed a joint Federal income tax return for 1965 with the district director of internal revenue, Los Angeles, Calif.

Raymond Degn (Degn) is a single person and resided in San Diego, Calif., at the time his petition was filed in this case. He filed his Federal income tax return for 1965 with the district director of internal revenue, Los Angeles, Calif.

Kevin O. Blackwell (Blackwell) and Geraldine M. Blackwell are husband and wife. They were residents of San Luis Obispo, Calif., at the time their petition in this case was filed. They filed a joint Federal income tax return for 1965 with the district director of internal revenue, Los Angeles, Calif.

Paul J. Lowrey (Lowrey) and Virginia Lowrey are husband and wife. At the time their petition in this case was filed they resided in Santa Maria, Calif. They filed a joint Federal income tax return for 1965 with the district director of internal revenue, Los Angeles, Calif.

Charles G. Boyd, Jr. (Boyd) and Mary A. Boyd are husband and wife. They were residents of Orcutt, Calif., at the time they filed their petition in this case. They filed their joint Federal income tax return for 1965 with the district director of internal revenue, Los Angeles, Calif.

The above-named women are petitioners solely because they filed joint Federal income tax returns with their husbands for 1965. Thus, when reference is made to taxpayers as petitioners, the reference is solely to the husbands.

Petitioners were permanently employed at Vandenberg Air Force Base (Vandenberg) as engineers, technicians, and civilian employees of various contractor companies having worksites at the base.

Petitioners lived at Lompoc, Santa Maria, and other towns near Vandenberg. Only military personnel are permitted to live on the base. In fact, there is not sufficient housing on the base for all military personnel and some live off the base. The combined Vandenberg Air Force Base-Santa Maria-Lompoc geographical area constitutes an industrial-residential metropolitan area, or its equivalent.

The outline of the base ir irregular and uneven, but on a straight line, is 24 miles in length running north and south, and is approximately 10 1/2 miles wide running east and west at its widest point, coming to a point at the northwesterly end. The northern tip of the base is about 3 1/2 miles south of a straight line west of Santa Maria, and the southern tip of the base is about 4 miles south of a straight line west of Lompoc. Lompoc is 24 miles from Santa Maria. The main gate to the base is approximately 9 miles to downtown Lompoc and 20 miles to Santa Maria.

In April 1965 there were approximately 17,000 military and other personnel working on the base. Of this 17,000, nearly 12,000, or more than two-thirds of the force, lived off base in the local area. This 12,000 (or thereabouts) living off the base was made up, in approximate numbers, of military, 4,222; civil service, 1,755; and contractors' employees, 5,930. These figures include those military families living in government-leased housing in Lompoc and vicinity. In April 1965, of the work force living off the base (military, civil service, and contractors' employees) approximately 52.5 percent lived in the vicinity of Lompoc, 38.5 percent in the vicinity of Santa Maria, and the remaining 9 percent were scattered as far south as Santa Barbara, and as far north as San Luis Obispo.

While there is some company transportation on the base from one worksite to another, there is neither public nor company transportation between the homes of the employees and the worksites.

Most civilian company employees employed at Vandenberg work in the general area of the ‘main base’ near the main gate. The main gate entrance to Vandenberg is located approximately 2 1/2 miles inside the eastern border of the base. The ‘main base,‘ also known as the cantonment area or administration area, starts about 1 mile west of the main gate and extends about 3 miles in a southwesterly direction.

The closest communities to the worksites at the main base are Vandenberg Village, Mission Hills, and Lompoc. These communities are, respectively, 6, 9, and 10 miles from the worksites.

A substantial number of the civilian employees at Vandenberg work in the area known as South Vandenberg. The city of Lompoc is the closest habitable community to the worksites at South Vandenberg. The petitioners herein, other than Blackwell, are employed at South Vandenberg. The farthermost worksite of civilian contractor employees on South Vandenberg is 20 miles from Lompoc.

The driving distance and time between each petitioner's actual residence and particular worksite, and the driving distance and time should he have elected to live in the closest town, are as follows:

+---------------------------------------------------------------------+ ¦ ¦Residence to worksite¦Closest town to worksite¦ +----------------------+---------------------+------------------------¦ ¦Petitioner ¦ ¦ ¦ +----------------------+---------------------+------------------------¦ ¦ ¦Miles ¦Minutes ¦Miles ¦Minutes ¦ +----------------------+----------+----------+---------+--------------¦ ¦ ¦ ¦ ¦ ¦ ¦ +----------------------+----------+----------+---------+--------------¦ ¦Sanders (from April 1)¦17.1 ¦25 ¦11.9 ¦20 ¦ +----------------------+----------+----------+---------+--------------¦ ¦Degn ¦17.5 ¦22.5 (av.)¦13.4 ¦19 ¦ +----------------------+----------+----------+---------+--------------¦ ¦Blackwell ¦57.5 (av.)¦75 ¦6 ¦10 ¦ +----------------------+----------+----------+---------+--------------¦ ¦Lowrey ¦26 ¦40 ¦13.4 ¦19 ¦ +----------------------+----------+----------+---------+--------------¦ ¦Boyd ¦27 ¦45 ¦13.4 ¦19 ¦ +----------------------+----------+----------+---------+--------------¦ ¦Barry ¦11 ¦20 ¦7 ¦11 ¦ +----------------------+----------+----------+---------+--------------¦ ¦Average ¦26 ¦38 ¦10.85 ¦16.33 ¦ +----------------------+----------+----------+---------+--------------¦ ¦ ¦ ¦ ¦ ¦ ¦ +---------------------------------------------------------------------+

The average actual commuting distance and time of the six petitioners from residence to worksite of 26 miles and 38 minutes are about the same (for any of the 6,000 permanent civilian contractor employees) as (1) the commuting distance and time computed from the most remote worksite on the base to the city of Lompoc of 23 miles and 35 minutes, (2) the commuting distance and time from the city of Santa Maria to the worksites in the industrial part of the main base of about 22 miles and 35 minutes, and (3) the commuting distance and time from Orcutt to the worksites on South Vandenberg of about 26 miles and 40 minutes. The average of 26 miles and 38 minutes is substantially greater than the commuting time and distance from Vandenberg Village or the city of Lompoc to the main base or from Lompoc to worksites on South Vandenberg, but less than the commuting time and distance from the city of Santa Maria to worksites on South Vandenberg or the commuting time and distance from the coastal towns to most, if not all, worksites on either North or South Vandenberg.

No allowance by the companies is made to the civilian company employees for the expense of going between their respective residences and their particular worksites on the base, including the distance traveled on the base. The petitioner-employees use their own automobiles. Their pay starts when they reach their worksites.

Throughout this country, especially in the large urban and industrial centers, many workers have in common the problem of a forced separation of their residence and worksite.

On their Federal income tax returns for the calendar years 1965 petitioners deducted their automobile expenses for travel each workday between their worksites and the city of Lompoc, which they considered the nearest habitable community to such worksites. Respondent disallowed these deductions on the grounds that the expenses were personal and were not incurred in carrying on any trade or business.


Petitioners are all civilian employees who traveled each workday to and from their worksites at Vandenberg Air Force Base. Since only military personnel could live on the base, petitioners had to live in surrounding communities. Moreover, they had to travel between their homes and worksites by automobile because public transportation was not available. The distance traveled each way by the petitioners ranged between 11 and 57 miles, with the average distance being 26 miles. Their travel time each way varied between 20 and 75 minutes, with their average time being 38 minutes. Petitioners deducted on their Federal income tax returns only that portion of their automobile expenses attributable to the distance between their worksites and the community closest to such worksites.

The cases under consideration are not cases involving a taxpayer with a temporary job; or a taxpayer with a permanent job and a temporary assignment; or a taxpayer working in two widely separated localities; or a public official who is required to maintain his residence in his home district but performs his official duties elsewhere. The cases do not involve on-the-job transportation of an employee, or the travel of an outside salesman. Rather, the instant cases all involve employees such as engineers and technicians with permanent places of employment who commute regularly between residence and work and present the question of whether petitioners' automobile expenses incurred in traveling to and from their worksites are deductible under section 162.

SEC. 162. TRADE OR BUSINESS EXPENSES.(a) IN GENERAL.— 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 * * * while away from home in the pursuit of a trade or business; * * *

The petitioners' main contention is directed to the language of section 162(a) (2). They contend that under such provision their expenses incurred in traveling to and from their worksites each workday were clearly ‘traveling expenses * * * while away from home in the pursuit of a trade or business.’ Petitioners' argument cannot succeed in view of the holding in United States v. Correll, 389 U.S. 299 (1967). The Supreme Court upheld the Commissioner's administrative rule that a taxpayer was not ‘away from home’ under section 162(a)(2) unless his trip required sleep or rest. We conclude here as we did in Joseph J. Bunevith, 52 T.C. 837 (1969), that section 162(a)(2) ‘is of no help to petitioner.’

The petitioners' alternative position is that the disputed expenses were generally ordinary and necessary business expenses deductible under section 162(a). Respondent simply contends that these expenses are nondeductible ‘commuting’ expenses disallowed under section 262. See sec. 1.262-1(b) (5), Income Tax Regs.

SEC. 262. PERSONAL, LIVING, AND FAMILY EXPENSES.Except as otherwise expressly provided in this chapter, no deduction shall be allowed for personal, living, or family expenses.

In Smith v. Warren, 388 F.2d 671 (C.A. 9, 1968), the Ninth Circuit considered a case which is not materially distinguishable from the case at bar. The taxpayer in that case piloted ships in the Puget Sound area. The ports included Seattle as well as others located from 100 miles north to 60 miles south of that city. The taxpayer used his personal automobile in traveling between his residence and the waterfronts of these ports to undertake pilot assignments and to return to his home from such assignments. The Ninth Circuit stated in a per curiam decision:

We think the trial court could properly conclude, on this record, that appellant's principal place of business was in Seattle, rather than in his home, and that the costs of his transportation between those two points were therefore non-deductible commuting expenses. We agree with the district court that this case cannot be distinguished from Steinhort v. Commissioner of Internal Revenue, 335 F.2d 496 (5th Cir. 1964). See also Heuer v. Commissioner of Internal Revenue, 283 F.2d 865 (5th Cir. 1960), affirming per curiam 32 T.C. 947 (1959).

In Steinhort v. Commissioner, 335 F.2d 496 (C.A. 5, 1964), affirming and remanding on other grounds a Memorandum Opinion of this Court, the Fifth Circuit reaffirmed in principle its earlier approval of the Tax Court's approach in William L. Heuer, Jr., 32 T.C. 947 (1959), affirmed per curiam 283 F.2d 865 (C.A. 5, 1960). In Heuer we considered it to be irrelevant whether there was available public transportation or living accommodations at or near the place of business. Consequently, in the case at bar we are not swayed by the fact that petitioners and their families could not live on the base.

Likewise, the fact that public transportation was unavailable to and from the base is not controlling. Whether the Vandenberg or city employee has the option of public transportation as a means of getting to work, or, on the other hand, can get to work only by use of his own automobile, is no ground for saying the one with the option gets no deduction while the other who must use his car does get the deduction. Whether the means of transportation to work is public or private, it is commuting in either situation. Commuting is commuting, whether it is in the city or country.

In the recent case of United States v. Tauferner, 407 F.2d 243 (C.A. 10, 1969), it was held that the principles of Steinhort, supra, involving commuting expenses of ship pilots, were equally applicable to disallow the deduction of commuting expenses representing unavoidable transportation between the taxpayer's residence and his permanent jobsite 27 miles away in a remote desert area. Concluding that there was no difference between the taxpayer in Tauferner and some other taxpayer who was forced to live away from his worksite due to its location in a completely industrialized area, the Tenth Circuit stated:

The nature of the work engaged in, the distance traveled, the mode of transportation, the degree of ‘necessity’ appear to be unsatisfactory guides with any degree of consistency and certainty. The basic and unmodified fact of whether the taxpayer is going to the place where he begins work or is returning from the place where he ceases work should be determinative. Such travels are expenses within section 262 as ‘personal, living or family expenses' whether in an urban, suburban, or rural setting.

Petitioners further attempt to justify these deductions on the grounds that they have not claimed expenses relating to the full distance traveled each way but rather have limited their deductions only to the distance between the base and its nearest habitable community. Petitioners' argument may be appealing from an equitable and logical standpoint but it cannot prevail when considered in the light of the statutes, regulations, and caselaw. There is no convincing way to distinguish the expenses here from those of suburban commuters. Petitioners' hardships are no different than those confronting the many taxpayers who cannot find suitable housing close to their urban place of employment and must daily commute to work. We see no reason why petitioners in the case at bar should receive more favored tax treatment than their urban counterparts who also cannot live near their worksites. In United States v. Correll, supra at 303, the Supreme Court expressed similar views:

By so interpreting the statutory phrase, the Commissioner has achieved not only ease and certainty of application but also substantial fairness, for the sleep or rest rule places all one-day travelers on a similar tax footing, rather than discriminating against intracity travelers and commuters, who of course cannot deduct the cost of the meals they eat on the road. See Commissioner v. Flowers, 326 U.S. 465.

The foregoing statement of the Supreme Court adds to what the Fifth Circuit had earlier said in Steinhort, supra at 503:

Deeply ingrained in the whole tax structure— memorialize now by literally hundreds of tax rulings, Tax and other Court decisions * * * — is the basic proposition that the cost of going to and from home and an established place of business is a nondeductible personal expenditure.

At times the pursuit of this approach brings about illogical and near absurd conceptual situations. But its predominant and redeeming grace is a sort of rough equality among all the millions of taxpaying, income-earning Americans who go— not as in scriptural days down to the sea in ships— but who go to and from their homes and their place of work. A lesser virtue is administrative uniformity.

The holding of the Ninth Circuit in Smith v. Warren, supra, together with the comments of the Tenth Circuit in United States v. Tauferner, supra, adequately disposes of petitioners' reliance on Mathews v. Commissioner, 310 F.2d 98 (C.A. 9, 1962); Wright v. Hartsell, 305 F.2d 221 (C.A. 9, 1962); and Crowther v. Commissioner, 269 F.2d 292 (C.A. 9, 1959), all of which were decided before the Supreme Court decision in United States v. Correll, supra.

Decisions will be entered under Rule 50 in docket Nos. 690-68 and 692-68. Decisions will be entered for the respondent in all other dockets.