T.C. Memo. 1999-153

UNITED STATES TAX COURT

HANSEL HAMLIN JOHNSON, JR. AND JANICE H. JOHNSON, Petitioners v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 14003-97. Filed May 5, 1999.

Hansel Hamlin Johnson, Jr., pro se.

John W. Sheffield III, for respondent.

MEMORANDUM OPINION

GOLDBERG, Special Trial Judge: This case was heard pursuant

to the provisions of section 7443A(b)(3) and Rules 180, 181, and

182. Unless otherwise indicated, all section references are to

the Internal Revenue Code in effect for the years in issue, and

all Rule references are to the Tax Court Rules of Practice and

Procedure.
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1 Petitioners concede the following: (1) They are not

entitled to interest deductions in the amount of $2,867 and

$2,602 for the 1992 and 1993 tax years, respectively; (2) they

are not entitled to unreimbursed employee expense deductions in

the amount of $2,817 or entitled to miscellaneous deductions in

the amount of $154 for the 1992 tax year; and (3) they are liable

for accuracy-related penalties pursuant to sec. 6662(a) in the

amounts of $168 and $106 for the 1992 and 1993 tax years,

respectively. 

Respondent determined deficiencies in petitioners' Federal

income taxes and determined accuracy-related penalties under

section 6662(a) for the taxable years and in the amounts set

forth below:

 Penalty 

Year Deficiency Sec. 6662(a)

1992 $1,624 $168

1993 5,502 106

After concessions,1 the sole issue for decision is whether

petitioners are entitled to deduct unreimbursed employee expenses

incurred during the 1993 tax year in excess of those allowed by

respondent.

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. At the time the petition

was filed, petitioners resided in Lawrenceville, Georgia. 

References to petitioner are to Hansel Hamlin Johnson, Jr.

Petitioner is a software quality engineer with a bachelor’s

degree in industrial technology and electronics. 
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During the years in issue, petitioner worked as a contract

engineer through an agency named TAD Technical. As a contractual

engineer, petitioner does not have an opportunity to work as a

permanent employee and does not receive holiday, vacation, or

severance pay. The usual contract term is from 3 to 6 months. 

In 1992 and 1993, petitioner worked as a software quality

engineer for Texas Instruments in Lewisville, Texas. Petitioner

began work on March 11, 1992, and initially contracted to work

for Texas instruments for only 6 months; however, after the first

6-month period, his contract was later extended for an additional

6-month period. After the second 6-month period, the contract

was extended again until December 17, 1993. 

While working for Texas Instruments, petitioner rented a

small 1-bedroom apartment and incurred various associated

expenses during the 1992 and 1993 tax years. Petitioners'

children continued to live in Lawrenceville, Georgia, where the

children also attended school. Mrs. Johnson worked in the

Atlanta area. Petitioner usually drove home once a month to

visit his family.

On their Federal income tax return for the 1993 tax year,

petitioners claimed unreimbursed employee expense deductions in

the amount of $19,218, representing expenses incurred by

petitioner while working for Texas Instruments. In a notice of

deficiency dated May 1, 1997, respondent disallowed $17,727 of
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petitioners' claimed 1993 unreimbursed employee expense

deductions because petitioner was employed away from home for

more than 1 year.

Section 162 Travel Expense Deductions

Deductions are a matter of legislative grace. See New

Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). 

Taxpayers bear the burden of proving that they are entitled to

their claimed deductions. See Welch v. Helvering, 290 U.S. 111,

115 (1933).

Section 162(a)(2) allows a taxpayer to deduct traveling

expenses incurred while away from home. A taxpayer may deduct

traveling expenses under section 162(a)(2) if he satisfies the

following three conditions: (1) The expense must be reasonable

and necessary; (2) it must be incurred while away from home; and

(3) it must be incurred in the pursuit of a trade or business. 

See Commissioner v. Flowers, 326 U.S. 465, 470 (1946). 

Respondent does not dispute that petitioners' expenses satisfy

the first and third requirements. Respondent contends that

petitioner was not away from home while working in Texas.

For purposes of section 162(a)(2), generally a taxpayer's

home is the vicinity of his principal place of employment, not

where his personal residence is located. See Mitchell v.

Commissioner, 74 T.C. 578, 581 (1980). However, if a taxpayer's

principal place of employment is temporary rather than
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2 See Energy Policy Act of 1992 (EPA 1992), Pub. L. 102-

486, sec. 1938(a), 106 Stat. 2776, 3033.

3 EPA 1992, sec. 1938(b), 106 Stat. 3033.

indefinite, the taxpayer's residence may be considered the

taxpayer's home, and the taxpayer may deduct the expenses

associated with traveling to and living at a job site. See

Peurifoy v. Commissioner, 358 U.S. 59, 60 (1958). Employment is

temporary if it is foreseeable that the employment will be

terminated within a short period of time. See Mitchell v.

Commissioner, supra at 581. Whether a taxpayer's employment is

temporary or indefinite is a question of fact. See Peurifoy v.

Commissioner, supra at 61. 

In 1992, the flush language of section 162(a) was amended to

include the following: "For purposes of paragraph (2), the

taxpayer shall not be treated as being temporarily away from home

during any period of employment if such period exceeds 1 year."2

The amendment is effective for costs paid or incurred after

December 31, 1992.3

Petitioners contend that the language of the amendment is

unclear and that their understanding of the language is that the

1-year period referred to in the amendment began on December 31,

1992. Respondent, in his brief filed on August 3, 1998, concedes

that petitioners are entitled to claim unreimbursed 1993 employee

expenses in the amount of $3,485, leaving $14,242 of 1993
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unreimbursed employee expenses in dispute. Respondent calculated

the $3,485 amount by applying a ratio of the number of days

petitioner was under contract with Texas Instruments in 1993, up

to, and including, March 10, 1993, compared to the total number

of days petitioner was under contract at Texas Instruments in

1993 (69/351), multiplied by the parties’ stipulated 1993 jobrelated travel expenses of $17,727.

We find the statutory language of section 162(a) clear. 

When interpreting statutes, the function of courts is to construe

the language of the statute so as to give effect to the intent of

Congress. See U.S. Padding Corp. v. Commissioner, 88 T.C. 177,

184 (1987), affd. 865 F.2d 750 (6th Cir. 1989). Where possible,

statutes and revenue acts should be interpreted in their ordinary

everyday sense. See Crane v. Commissioner, 331 U.S. 1, 6 (1947). 

The amended language of section 162(a) clearly states that a

"taxpayer shall not be treated as being temporarily away from

home during any period of employment if such period exceeds 1

year." (Emphasis added.) Additionally, the amendment clearly

"[applies] to costs paid or incurred after December 31, 1992." 

EPA 1992, sec. 1938(b), 106 Stat. 3033 (emphasis added.) 

On March 10, 1993, petitioner had been employed by Texas

Instruments for 365 days. At that time, petitioner knew that his

contract with Texas Instruments would be extended for an

additional period of time and no longer had a realistic
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expectation that his employment with Texas Instruments would last

a year or less.

Petitioners have failed to establish that petitioner was

away from home on a temporary basis after March 10, 1993. 

Accordingly, we hold that petitioner is entitled to claim

unreimbursed employee expenses for 1993 only in the amount of

$3,485. 

To reflect the foregoing,

Decision will be entered

under Rule 155.