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Parties Involved:
Commissioner of Internal Revenue
Appellee
Harry W. Patrick
Appellant
Renee L. Patrick
Appellant

Document Text:

PUBLISH 

UNITED STATES COURT -OF. ,APP:El\iLS 

FOR THE TENTH CIRCWIT 

JON R. and CAROL J. POLLEI, and ) 

HARRY w. and RENEE L. PATRICK, ) 

) 

Petitioners-Appellants, ) 

FILED 

United States Court of Appeals 

Tenth Circuit 

.JlJN 131989 

ROBERT L. HOOCKER 

Clerk 

) 

V • ) 

Nos. '87-115:9 

87-1160 

J 

COMMISSIONER OF INTERNAL REVENUE, j 

) 

Respondent-Appellee. ) 

Appeal from the United States Tax Court 

(T.C. Nos. 28737-84 and 28738-84) 

Steven D. Woodland, of Van Cott, Bagley, Cornwall, & McCarthy, Salt 

Lake City, Utah, for Petitioners-Appellants. 

Ann Belanger Durney, Tax Division, Department of Justice, 

Washington, D.C. (Roger M. Olsen, Assistant Attorney General, 

Michael L. Paup and B. Paul Klein with her on the brief), for 

Respondent-Appellee. 

Before HOLLOWAY, SEYMOUR, and BALDOCK, Circuit Judges. 

SEYMOUR, Circuit Judge. 

Appellate Case: 87-1160 Document: 01019784813 Date Filed: 06/13/1989 Page: 1 
Petitioners John R. Pollei and Harry w. Patrick1 appeal from 

the United States Tax Court's decision upholding deficiencies 

assessed against their federal income tax returns for 1981. At 

issue is whether petitioners may deduct as "ordinary and necessary" business expenses under section 162(a) of the Internal 

Revenue Code, 26 u.s.c. § 162(a) (1982), maintenance and operating 

costs arising from their use of personally-owned, unmarked police 

cars to travel between their residences and police headquarters 

when they are required to be on duty from the time they leave 

their homes. We disagree with the tax court's conclusion that 

such travel constitutes nondeductible personal "commuting", and we 

therefore reverse. 

I. 

Only petitioners presented evidence in this case, and the 

facts are basically undisputed. In 1981, petitioners Pollei and 

Patrick were employed as captains by the Salt Lake City Police 

Department ("SLCPD''). Prior to September 29, 1980, the SLCPD 

supplied petitioners and other police officers with city-owned, 

unmarked vehicles for their full-time use. On that date, in 

compliance with the Salt Lake City mayor's directive to cut costs, 

the SLCPD Chief of Police ordered "command-level" officers to 

1 Carol J. Pollei and Renee L. Patrick are parties to this 

action solely because they filed joint federal income tax returns 

with their husbands in 1981. 

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Appellate Case: 87-1160 Document: 01019784813 Date Filed: 06/13/1989 Page: 2 
provide their own transportation during their "tour of duty''. 

Petitioners, two of nine captains on the force, fell into that 

category. Each command-level officer was given a monthly $250 car 

allowance. By that same order, petitioners' tours of duty were 

extended to begin and end when the officers left for work or 

arrived home in their cars, rather than when they actually arrived 

at or left from police headquarters. SLCPD provided and installed 

necessary equipment in each officer's privately-owned vehicle to 

enable its use as an unmarked police car. Officers were required 

to notify the police dispatcher before leaving, and on arriving. 

home, and were "on call" during their travel time to and from 

headquarters. While en route to headquarters or their homes, 

petitioners were expected to monitor the radio channels to be 

aware of the ongoing police activities, observe their subordinate 

officers in the field, patrol the streets, and respond to 

dispatcher calls for assistance. Petitioners were also required 

to call in any time they used the unmarked cars, whether they were 

on or off duty at the time. 

On their 1981 federal income tax returns, petitioners claimed 

business expense deductions in connection with the use of their 

unmarked cars. Respondent Internal Revenue Service disallowed 

that portion of the deduction relating to petitioners' daily 

operation of their vehicles between their homes and headquarters, 

and assessed deficiencies against their 1981 returns. Petitioners 

sought the tax court's redetermination of those deficiencies. The 

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Appellate Case: 87-1160 Document: 01019784813 Date Filed: 06/13/1989 Page: 3 
tax court concluded that petitioners were not engaged in business 

activities during the time spent traveling between their homes and 

headquarters, but instead were merely commuting to work, and that 

the related expenses therefore were nondeductible. See Pollei v. 

Commissioner, 87 T.C. 869, 872-73 (1986). Petitioners timely 

appealed that decision to this court. 

II. 

Our first concern is the appropriate standard of review. 

The IRS argues that whether petitioners were commuting is an issue 

of fact, subject to the clearly erroneous standard of review. 

Petitioners contend that they are challenging the tax court's 

legal conclusions, compelling de novo review. 

Under section 7482(a) of the Internal Revenue Code, 26 

u.s.C.A. § 7482(a) (1976) (current version at 26 u.s.c.A. § 

7482(a) (West Supp. 1989)), this Court must review tax court 

decisions "in the same manner and to the same extent as decisions 

of the district courts in civil actions tried without a jury." We 

have held that the application of section 162(a) to basically 

undisputed facts is an ultimate question not subject to the 

clearly erroneous rule. Colorado Springs Nat'l Bank v. United 

States, 505 F.2d 1185, 1189 (10th Cir. 1974). That is so because 

it is a mixed question of law and fact in which "the facts are 

admitted or established and the law is undisputed; the sole issue 

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Appellate Case: 87-1160 Document: 01019784813 Date Filed: 06/13/1989 Page: 4 
( is whether the law applied to the facts satisfies the statutory 

standard." Supre v. Ricketts, 792 F.2d 958, 961 (10th Cir. 1986) 

(citing Pullman-Standard v. Swint, 456 U.S. 273, 289 n.19 (1982)). 

As we noted in Supre, "[w]here the mixed question involves 

primarily a factual inquiry, the clearly erroneous standard is 

appropriate. If, however, the mixed question primarily involves 

the consideration of legal principles, then a de novo review by 

the appellate court is appropriate." 792 F.2d at 961. Here, 

petitioners primarily object to conclusions drawn by the tax court 

in arriving at its determination that petitioners' expenses in 

issue were not deductible. We are equally as able as the tax 

court to draw conclusions from the undisputed facts presented. 

See Colorado Springs Nat'l Bank, 505 F.2d at 1189. Thus, we 

review de novo the tax court's application of the law to the facts 

before us. To the extent we review pure fact findings made by the 

Tax Court, of course, we apply the clearly erroneous test. Fed. 

R. Civ. P. 52(a). 

III. 

Section 162(a) of the Internal Revenue Code provides a tax 

deduction for all "ordinary and necessary" business expenses. 

Section 262 of the Code disallows the deduction of "personal, 

living, or family expenses." 26 U.S.C. § 262 (1982) (current 

version at 26 U.S.C.A. § 262 (West Supp. 1989)). Petitioners 

concede that ordinary commuting expenses constitute nondeductible 

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Appellate Case: 87-1160 Document: 01019784813 Date Filed: 06/13/1989 Page: 5 
personal expenditures. See Commissioner v. Flowers, 326 U.S. 465 

(1946). Petitioners argue, however, that they are not commuting 

between their homes and headquarters because they are on duty, 

performing services for the police department on behalf of the 

public. We agree with petitioners that the tax court erred in 

determining that their travel to and from headquarters was not a 

deductible business expense under section 162(a). 

After the September 29, 1980 order, the SLCPD considered 

petitioners to be on duty while traveling to and from headquarters. They were required to check in and out with the 

dispatcher upon leaving and arriving home. They could not use 

ordinary vehicles to provide their own transportation during their 

tours of duty. They were expected to drive to work in vehicles 

specially equipped with a siren, emergency lights, and a police 

radio to enable them to monitor the six-channel police radio, as 

well as supervise subordinates' responses to dispatcher calls, and 

respond to emergency and other assistance situations. Officers 

were disciplined for a failure to comply with these requirements. 

Testimony from the SLCPD Chief of Police indicated that by 

requiring petitioners' tours of duty to include their travel time 

to and from headquarters, the city benefitted from an increase in 

the amount of police supervision and patrol services, as well as 

from quicker response times for emergency and police reinforcement 

situations. These benefits were gained without any cost to the 

city for the increase in petitioners' service. 

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Appellate Case: 87-1160 Document: 01019784813 Date Filed: 06/13/1989 Page: 6 
Notwithstanding this undisputed evidence, the tax court 

concluded that "petitioners were not engaged in their jobs 

(business activity) during the time they traveled to and from 

headquarters." Rec., vol. I, doc 16, at 6. We disagree with this 

conclusion. Petitioners and their two witnesses emphasized in 

their testimony the supervisory and inspectional function 

performed by SLCPD commanders in their travels to and from 

headquarters. Chief of Police E.L. Willoughby testified that each 

of the petitioners had "a basic responsibility of inspectional 

services'' which had "nothing to do with sitting behind a desk, and 

signing reports, and counting numbers, and manipulating manpower," 

but which required petitioners and other command-level officers to 

go out into the field. Rec., vol. II, at 23. 2 Petitioner Patrick 

testified that he performed supervisory, inspectional functions in 

driving to and from headquarters, as he could then monitor his 

subordinate officers' communications with the dispatcher. 

Petitioners' expert witness emphasized that a significant aspect 

of an officer's travel to and from headquarters: 

"[i]s the inspectional function that they will provide 

when they're going and coming to work. They will then 

intentionally look for traffic hazards. They will be 

listening to the radio about traffic flow issues. They 

2 Chief Willoughby also noted that each of the petitioners "is 

responsible, the minute that he gets in service, that anything 

that comes within view, or that he hears over the police radio, 

draws that to his attention, that if it's within a short distance 

from him, or her, then the captains are to respond to that and 

monitor that as an inspectional function, to see that it's 

properly being carried out." Rec., vol. II, at 27. 

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Appellate Case: 87-1160 Document: 01019784813 Date Filed: 06/13/1989 Page: 7 
will be listening for floods. They will be listening to 

law enforcement officers in need of help, or other 

departments in the need of help. It puts them in tune 

with what's going on in the department ... at any given 

time." 

( 

Id. at 83. 

The tax court concluded that petitioners' responsibilities 

were no greater when in transit to and from headquarters than when 

petitioners used their unmarked vehicles for personal errands. 

This is a fact finding that we hold clearly erroneous because it 

is not supported by the record. Like all police officers, 

petitioners were required to check in with the dispatcher when 

using their cars for personal reasons in their off-duty hours, and 

were thus considered available to respond to calls for assistance. 

However, the tax court's conclusion fails to acknowledge 

petitioners' supervisory roles and the SLCPD's reliance on their 

daily drive to and from headquarters. By requiring petitioners' 

tour of duty to begin with their departure from and end upon their 

arrival at home, the SLCPD was provided with a regular addition to 

the number of commanders supervising police activities. Petitioners' occasional or happenstance use of their unmarked cars on 

personal business while off-duty could not provide the SLCPD with 

a similar expectation of a regular increment in its supervisory 

staff. The regularity of petitioners' daily travels to headquarters was noted by their expert witness, who testified that 

commanders, such as petitioners, ~ould be more inclined to take 

care of a routine matter observed while traveling to and from 

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headquarters than they would while on personal errands while 

off-duty. 3 The record demonstrates that petitioners' daily travel 

time to and from headquarters was spent in the performance of 

job-related activities directly pertaining to their regular duties 

as SLCPD police captains. 

The IRS argues that allowing petitioners to claim these 

expenses will result in a deluge of claims for similar exceptions 

from taxpayers who may routinely or even occasionally perform 

work-related tasks_during their commute to work. It fears, for 

example, that an employee using a portable dictaphone or a car 

telephone while driving to work could claim deductions for 

commuting expenses under section 162(a). We view the facts and 

circumstances in this case as sufficiently unique to preclude that 

fear from becoming reality. 

We think it unlikely that most employees could justifiably 

claim their performance of work-related tasks during their commute 

to their jobs as a condition of their employment. Rather, it is 

more likely that most employees perform these tasks voluntarily, 

perhaps for their convenience or to enhance their work record, 

Petitioners' performance of supervisory and patrol responsibilities as they drove to headquarters was mandated by the SLCPD 

3 The example given by this witness to illustrate a routine 

matter for which a commander would take the time on his daily 

trips to headquarters was that of stopping to correct a 

subordinate's improper wearing of his police uniform. 

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( order of September 29, 1980, and petitioners were subject to 

discipline if they did not carry out those responsibilities. 

Petitioners had no other option but to drive their unmarked cars 

between their homes and headquarters. Use of public transportation was not a viable alternative for petitioners, who testified 

that they could not thereby monitor the police radio and respond 

to emergencies or dispatcher calls while traveling to and from 

headquarters. Petitioners' situation thus can be distinguished 

from cases in which a commuter's choice of residence location or 

personal convenience were cited as reasons for the disallowance of 

commuting expenses. See,~, McCabe v. Commissioner, 688 F.2d 

102, 107 (2d Cir.) (police officer not entitled to deduct commuting expenses when use of personal auto dictated by choice of 

residence location rather than need to carry service revolver), 

cert. denied, 459 U.S. 906 (1982); Fausner v. Commissioner, 413 

U.S. 838 (1973)· (need to carry incidentals of work while commuting 

doesn't transform commute costs from personal into business 

expenses). 

When conditions of employment restrict an employee's 

discretion in typically personal choices such as meals eaten 

during working hours or mode of commuting to work, "that which may 

be a personal expense under some circumstances can when circumstances prescribed by company regulations, directives and 

conditions, lose its character as a personal expense and take on 

the color of a business expense." Sibla v. Commissioner, 611 F.2d 

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Appellate Case: 87-1160 Document: 01019784813 Date Filed: 06/13/1989 Page: 10 
( 1260, 1262 (9th Cir. 1980). Meal expenses, like commuting 

expenses, are usually deemed to be personal in nature and not 

deductible under section 262. See Treas. Reg. § l.262-l(b)(5) (as 

amended in 1972). In Sibla, expenses incurred by two firefighters' in the form of mandatory contributions to a station meal 

fund were held to qualify as ''ordinary and necessary" expenses 

under section 162(a). 611 F.2d at 1262. The firefighters could 

not bring their own meals or eat outside the station in lieu of 

contributing to the meal fund. Id. at 1261. The firefighters 

occasionally missed the meals prepared at the fire station, while 

away on fire department business, but received no reimbursement 

for the missed meals. Id. 

More recently, the Eighth Circuit bas held meal expenses 

incurred by Minnesota state highway troopers to be deductible 

business expenses under section 162(a), rather than nondeductible 

personal expenses. Christey v. United States, 841 F.2d 809, 813 

(8th Cir. 1988), cert. denied, 109 S. Ct. 1131 (1989). The 

troopers there incurred meal expenses while on duty and in 

compliance with the state highway patrol's regulations regarding 

on-duty meals. Id. at 810. Stressing that the troopers should be 

visible and available to the public while taking on-duty meals, 

the patrol regulated the scheduling and length of the meal break, 

as well as the restaurants at which meal breaks could be taken. 

Id. The troopers were prohibited from bringing meals from home or 

eating in their patrol cars. Id. During on-duty meal breaks, 

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troopers were subject to interruptions, both from the patrol 

dispatcher and from inquiries by the general public regarding 

weather, road conditions, traffic laws and related subjects. 

Because of such interruptions, troopers frequently could not 

finish meals for which they had paid. Id. 

Other factors limiting the potential number of successful 

claims under our holding today are the public service and safety 

aspects of petitioners' employment, factors reflected in the 

SLCPD's orders directing petitioners mode of daily travel to and 

from headquarters. Petitioners' responsibilities to the public 

are similar to those of the firefighters in Sibla and the highway 

patrol troopers in Christey. In Sibla, the court referred to the 

tax court'!=! recognition of the "unusual nature" of the fire.-

fighters' employment in permitting the deduction of meal Bxpenses. 

611 F.2d at 1262. In Christey, the court noted that the purpose 

of the restrictions placed on the troopers' on-duty meals was to 

promote public safety and obedience to the law by making the 

troopers visible and available to the public during on-duty meal 

breaks. 841 F.2d at 810. Most employees cannot legitimately 

claim a similar public service or safety component to their jobs, 

and so will be unable to justify the deduction of commuting 

expenses in reliance on our decision here. 

The SLCPD's September 1980 order created restrictive 

conditions of employment similar to those found in Sibla and 

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Christey. Like the firefighters who were required to contribute 

to the station meal fund in Sibla, petitioners here had no choice 

in providing their transportation to and from headquarters othet 

than with a personally-owned, police-equipped car. Like the 

troopers' meal breaks in Christey, petitioners' travel time to and 

from headquarters, ordinarily a matter of personal choice, was 

governed by their employers' policy which.caused them to be "on 

duty" during those times. Following the rationale expressed in 

the Christey and Sibla decisions, we conclude that the employment 

conditions imposed upon petitioners caused them to incur expenses 

in maintaining and operating their personally-owned vehicles while 

traveling to and from $LCPD headquarters and that such expenses 

should be deductible under section 162(a). 

The decision of the tax court is reversed and judgment will 

be entered for petitioners. 

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