TAX COURT OPINION

Case: Bruce Clark & Jan Lynn Allen
Docket Number: 3779-07
Judge: Cohen
Opinion Type: memo
Filed: 05/18/2009
Pages: 22

T .C .! Memo . 2009-10 2 UNITED STATES TAX COUR T BRUCE CLARK ALLEN AND JAN LYNN ALLEN, Petitioners v . COMMISSIONE R OF INTERNAL REVENUE, Responden t Docket No . 3779-07 . Filed May 18, 2009 . Bruce Clark Allen and 'Jan Lynn Allen, pro sese . Aimee R . Lobo-Berg , for respondent . MEMORANDUM FINDINGS OF,FACT'AND OPINIO N COHEN, Judge : Respondent determined deficiencies of $3 .458 and $525 in petitioners' Federal income, taxes for 2003 and 2004 , respectively . After concessions, the issues for decision are : , (1) Whether petitioners are entitled to travel and transportatio n €~I expense deductions on the basis of the location of their taxi, home ; (2) whether petitioners are entitled to additiona l SEED MAY 18 2009 2 - deduct"ions for their rental property beyond what respondent has allowed ; (3) whether petitioner Bruce Clark Allen (Mr . Allen), as an Oregon, certified court interpreter, is a public official for tax purposes ; and (4) whether petitioners are entitled to deductions for expenses attributable to Mr . Allen's work as a court interpreter beyond what respondent has allowed . 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 . FINDINGS OF FAC T ome'of the facts have been stipulated, and the stipulated facts a re incorporated in our findings by this reference . .Petitioners resided in Oregon at the time they filed their .7 1 petn . .-Petitioners are married and in January 2003 owned a home i n ;The Dalles, Oregon, where they both lived . From January 1 through:approximately September 19, 2003, . petitioner Jan Lynn Allen (Mrs . Allen) was employed as a teacher by The Dalles Schoo l District . The Oregon Judicial Department (OJD), Office of the State Court !, Administrator, administers a program for the certificatio n of court interpreters . Or . Rev . Stat . sec . 45 .291 (2003) . Mr . . 't I - 3 Allen fulfilled the certification requirements and became a n Oregon Court Certified Interpreter in 2001 . In general , under Oregon law, when a court istrequired to appoint an interpreter for any person'in a proceeding before the court o r whenever a hearing officer is required to appoint an interprete r C in an adjudicatory proceeding, the court, hearing officer, oro designee of the hearing officer is to first call an interpreter , who has been certified under Oregon Revised Statutes sectio n 45 .291, when available, before calling a noncertified court . Or . Rev . Stat . sec .45 .288 (2003) . ' interpreter From January 1 through March!30, 2003,,Mr . .Allen workedeas a self-employed Spanish language interpreter for the Oregon Employment Department and the OJD liin The Dalles . Mr . Allen received a Form 1099-MISC „ Miscellaneous Income, reporting these earnings as nonemployee compensation, with neither Social Security taxes nor Federaliincome,taxes deducted . Mr . Allen also taught part time at Columbia Gorge Community College(cid:127)(CGCC) in The Dalles from January 6 through June 12 ,,'E . 2003 . Petitioners planned to move away from The Dalles after Mr s Allen finished the 2002-03 :school~ .year . : Petitioners hoped that both would secure employment in a single locale away from Th ~ Dalles . 1 - 4 - Ink step toward achieving petitioners' goal, Mr . Allen interviewed with the OJD .for a staff interpreter position and received an offer for a job in Pendleton, Oregon (approximately 1.25 mileqkeast of The Dalles) . Mr . Allen accepted and began working for the OJD on March 31, 2003 :(9 hours per day, 4 days per week,,,; with his schedule changing to 8 hours per day, 5 days per week after June 29, 2003) . Mr . Allen stayed in a motel whe n in Pendleton . After he started with the OJD in Pendleton, Mr . Allen's CGCC teaching position required that he drive to The Dalles to teach 2 hours on Tuesday and Thursday nights through June 12, 20,03 . Th e nights',Mr . Allen taught at CGCC, he stayed at petitioners' home in TheDalles . . After March-31, 2003, Mr . Allen also worked in The Dalles as a self-employed interpreter on 3 days (April 25, May 2, and June 13, 2003) . Mr . Allen received,a Form W-2, Wage and-Tax Statement, from the Oregon Judicial Department reporting his wages after h e became an"employee on March 31, 2003 . Mr . Allen received a ,Form W-2 for his CGCC earnings . Mrs .,Allen attempted to secure a job in Pendleton but wa s not .,successful . She,pursued teaching positions in other Oregon is cities~,and in August 2003 accepted a job in Oregon City, Oregon (approximately 215 miles east of Pendleton) . Mrs . Allen began teaching for the Oregon City School District on or about September 22, 2003, and continuedin,this position throughout . 2004 . Petitioners rented a home in Oregon . City that Mrs . Allen; moved into in September 2003 . Petitioners continued to rent thi s home throughout 2004 . After Mrs . Allen accepted the Oregon City position, Mr .',11 Allen pursued OJD opportunities in the Oregon City area so tha t he and his wife could live ;and work in the same locale . On o r about October 8, 2003, the'OJD transferred Mr . .Allen to Portland, Oregon '( approximately 17 miles northwest of Oregon City), an f Jhe lived in the Oregon City rental home with Mrs .~Allen . Mr . Allen continued to work for the OJD in Portland throughout . 2004 . After moving to Oregon City,ipetitioners rented their house in The Dalles from October ! 12, .2003, through June 12 ; 2.004 . They retained use of the basement so that they could-make improvements to the house . On Novemberill , 2004 ., petitioners sold their hous e in The Dalles. i.j On their 2003 joint Form 1040, U .S . Individual Income Tax O Return, petitioners attached a Schedule A,'Itemized Deducti ns, . and each claimed unreimbursed employee expenses including travel , meals, and entertainment expenses . Mr . Allen claime d transportation expenses . Petitioners also attached a Schedule,C v Profit or Loss From Business , cla'ming . expenses with respect ;t Mr . Allen's services as a .self-employed interpreter, which . . I i - 6 - .included travel, meals, and entertainment, car and truck expenses, utilities, and-expenses for business use of :a !Fhome . On'-their 2004, joint tax return petitioners reported $2,20 0 not-for-profit rental income and claimed a $2,200 deduction on Schedule A for repairs and not-for-profit .rental expenses . . Both petitioners also claimed unreimbursed employee expenses on their 2004"Sche'dule A . For Mr . Allen these"included vehicle expenses, transportation expenses, travel, meals, and entertainmen t expenses . Petitioners also attached a Schedule D, Capital Gains and Losses, on which they claimed an exclusion, under section . 121, of $30,317 of gain on the sale of their residence in The Dalles ~ In the notice of deficiency for 2003 and 2004 sent to petitioners, the Internal Revenue Service (IRS) disallowed a number.,of .,the(cid:127)claimed Schedule A and Schedule C deductions fo r both tax years . During negotiations with the IRS, petitioner s made ; .concessions for both'tax years . . ;Petitioners also : (1), Requested':additional deductions for increased itemized deductions for travel and transportation expenses for .their 2003 trips outside The Dalles to income-producing activities on the . premise that'their .only tax home in 2003 was The Dalles ; (2) claimed that Oregon' ; City was their only .tax home in 2004 and requested additional deductions ; (3) claimed deductions for expense s associated with Mr . Allen's work in 2004 as a court interpreter - 7- - on the premise that he is a public official ; and (4) requested additional Schedule C deductions attributable to Mr . Allen' s court interpreter work for meals and entertainment, and business utilities expenses . The IRS made concessions regarding portion s of these claimed deductions and disallowed the remainder . OPINION Claiming that the Dalles was ; their only tax home in 2003, petitioners argue that they are entitled to transportation . expense deductions for anyJtravel{outside .The Dalles to any income-producing activity and that they are both entitled to travel (lodging, meals, and incidentals) expense deductions for k days that they worked'in locations away from The Dalles . With respect to the dispute over the location of their taxj home, petitioners contend that Mr . Allen's employment in Pendleton was temporary, that married couples cannot have separate tax homes, and-that a taxpayer has only one tax home each year . Respondent argues that petitioners are not entitled to the claimed travel and transportation expenses beyond what has been allowed because neither petitioner was away from his or her tax home when the travel expenses were incurred . Respondent asserts that Mrs . Allen's tax home was The Dalles from January 1 through September 19, 2003, and Oregon City from September 19 through ~, December 31, 2003 . Respondent contends that from January 1, i i - 8-- through-March 30, 2003, Mr . Allen's tax home was The Dalles ; from March 31 through October 7, 2003, his tax home was Pendleton ; and fromOctober 8 through December 31, 2003, his tax home was Oregon City : Deciding whether transportation and travel expenses are deductible requires the determination of a taxpayer ' s tax home . See sec : 162(a) . The word "home" for-purposes of section 162(a)(2) generally refers to the area of a taxpayer's principal (if there is more than one regular) place of employment and not where his' .personal residence is located . Henderson v . Commissioner , 143 F .3d 497, 499 (9th Cir . 1998), affg . T .C . Memo . 1995-559 ; Mitchell v . Commissioner , 74 T .C . 578, 581 (1980) . When'ataxpayers have multiple jobs in different locations during the year, aremarried,~ and incur ..duplicate living expenses, identifying the location of the tax home requires review of multiple factors including : (1) Whether employment is permanent, temporary, or indefinite ; (2) whether there is a business justification for incurring duplicate,living expenses ; (3) whether the spouses have separate tax homes ; and (4) whether the taxpayersilactually have multiple tax homes during 1 year because their principal places of business have changed . ,In considering whether employment' is permanent, temporary , or indefinite, the general rule is that if the location of the taxpayer's regular place of business changes, so does the 9 taxpayer's tax home--from the . old location to the new location . ;, Kroll v . Commissioner ,-49 T .C . 557,, 562-'563 (19.68) There i exception to this rule if the employment is, or is reasonably ) expected to be, temporary .1 Peurifoy v . Commissioner , 358 U .S 1 59, 60-(1958) . However, this'exc6ption does not apply if the j employment = away from home is indefinite ._ 'Kroll v . Commissioner , . supra at 562 . Unless terminationlis foreseeable t 1 period of time, employment 11 that rarely l acks permanence is considered indefinite . See Neal v : Commissioner , 681 F .2d 1157 1159 (9th Cir . 1982) (following Kasun v . United States , 671 F 2 1059, 1061 (7th Cir . 1982)), affgl. per curiam T .C . Memo . 1981''! 407 . A'taxpayer will not be'treated as being temporarily awa y from home during any period of .employment exceeding 1 year . Sec . 162 .(a)'. Mr . Allen's OJD position) in : Pendleton was indefinite~+ an d not temporary because-nothing in the record indicates tha t termination was foreseeable withi i p a - short -period ,of time . Likewise, Mr . Allen's Oregon City OJD employment was no t temporary . The second factor fort identilfying the tax home is ' that ,the' ; taxpayers must have some busines s 4 justification beyond merel y personal reasons for maintaining an alleged tax home remote from ' a place of employment .- See Henderson ::v . Commissioner, supra 500 ; Tucker v . Commissioner , 55 T .C . 783, 787-788 :. .(1971) . Allen had business reasons 'to bein,multiple - 10 - position in Pendleton and teaching for CGCC and working as a self-employed interpreter in The Dalles . Although this weighs in petitioners' favor, all of the facts are reviewed to'identify the tax home . Third, when married couples maintain multiple places of abode,,ireview is required to-determine whether they have separate tax homes . Married couples that both work-and file a joint tax return, may have separate tax homes . See Hammond v . Commissioner , 20 T'C~.285, 287-288 (1953), affd ., .213 F .2d 43 (5th Cir .1,1954) ; Chwalow!"v . Commissioner , .T .C . Memo . 1971-185, affd . 470'F .2d 475 , 478 (3d''!Cir . 1972 ) Last, when taxpayers have employment or business in multiple locations during 1 year, the principal place of business is generally used to determine the tax home . See Stright v . Commissioner , T .C . Memo. 1993-576 . When a taxpayer accepts employment either permanently or for an indefinite time away from the place of his usual abode, the taxpayer's-tax home will shift to the location of the taxpayer's new principal place of business ., See Coombs v . Commissioner , 608 F .2d 1269, 1276 (9th Cir . 1979), affg . in part-and revg . impart on a different issue 67 TC . 426 (1976) . Determining the principal place of business includes review of the location where the taxpayer spends more of his time,,engages in greater business activity, and derives a greater!proportion of his income . Markey v . Commissioner , 490 - 11 '- F .2d 1249, 1255 (6th Cir . 1974), revg . T .C . Memo . 1972-154 . i. .The Court of Appeals for the Ninth circuit has applied the Markey l4' test to determine the tax home when a taxpayer both earns a d substantial income and stays overnight in each of two locations ! See Folkman v .'United States , 6151F .2d 493 (9th Cir . . 1980) , ! (applying the Markey test,!the court concluded that th e taxpayer's tax home was the-location where he spent more workin g time and derived most - of-his income ) ; see also . Stright v J Commissioner , supra . Mr . Allen's-principal place of business!" from March 31 through October 7, 2003, .was Pendleton because' he devoted more working time to his employment in Pendleton tha n to the jobs-in The Dalles, ;and he earned most of his income i n Pendleton . Because Mr . Allen's 'OJD employment in Pendleton was not4 :1 temporary and Pendleton was his principal place of employmentlor- business, Mr . Allen's tax home from March 31 through October 2003, was Pendleton . When Mr . Allen transferred with the_OJDit o Portland on approximately 6ctober'8, 2003, for a position that" continued throughout 2004,1his tax home became the Oregon City , 1 y rental home . For similar reasons, Oregon City became Mrs . Allen's tax ; . home on September 22, 2003', and remained her tax home throughou t 2004 . Her teaching employment was not temporary, .and her - 12 principal place of employment shifted to Oregon City when she began her position there . After starting their respective,employment in the Orego n f1 City area!, neither petitioner had a business reason to maintain a residence in The Dalles because neither had employment or business there . Having determined petitioners' tax homes, we can decide the deductibility of petitioners.' claimed travel and transportatio n expensesl~ Travel expenses may be deductible, including amounts expended for meals and lodging while away from home in th e pursuit,of a trade or business . Sec . 162(a)(2) . For an expense to be, deductible, a taxpayer must show that the expense wa s incurred away from home, that the expense is ordinary and necessary , and that the expense was incurred in pursuit of a trade , or business . Commissioner v . Flowers , 326 U .S . .465, 470 (1946 ) ; .Bochner v . ; Commissioner , 67 T .C . 824, 827 (1977) . Petitioners have not shown that the travel expenses claimed as deductions for 2003 were incurred while away from their respective tax homes in the pursuit of a trade or business . , Thus, no additional travel expenses are deductible beyond thos e respondent has allowed . Petitioners argue in the " alternative(cid:127)that if Mr . Allen's ta x home shifted to Pendleton when he started his employment there, petitioners are entitled to deductions for Mr . Allen's trips - 13 - between Pendleton-and The jalles, beyond what respondent ; allowed . Respondent argues that petitioners are not entitled to additional deductions for travel expenses that Mr . Allen incurred : in The . ; Dalles from March 31 through October .7, 2003, because he could-, have returned .to Pendleton (his tax home-during this .period) ! after teaching at CGCC . Respondent contends that most of thej time Mr . Allen spent during-tripsito The Dalles was primarily fo r personal purposes . If expenses for travel to and from adestination are' incurred for both business, and other purposes, such expenses are, I i deductible only if the travel is primarily related to the ; G taxpayer's trade or businei s . Sec . 1 .162-2(b)(1),, Income Tax ; Regs . If a-trip is primarily personal in nature, expenses are not deductible even if the ; taxpayer engaged in some business, , activities at the destination . Id . Whether travel is primar i ly related to the taxpayer's ttrade or business or is primarily . personal is a question of fact . -Sec . 1 .162-2(b)-(2), Income „Tax 1 .~ Regs . ; see also Holswade V,, . Commissioner , 82 T .C . 686, 698, 7011 (1984) . The amount of time spent : on personal, activity during th e trip, compared with the-amount of time spent on activitie s directly relating to the taxpayer's trade or-business, is ani important factor in determining whether the trip is primarily; personal . Sec . 1.162-2( b)(2), Income Tax .Regs . The taxpayer 14 - must,prove that the trip was primarily related to,the trade or business ., . Rule 142(a) . Petitioners have not established ;;; that Mr . Allen spent more time"teaching and/or on his self-employed interpreter activity than on'.I'.ipersonal endeavors during his days in The Dalles_ . Thus, petitioners are not entitled to additional travel expense deductions for Mr . Allen's trips to The Dalles from March 3 1 through October 7, 2003 . Petitioners argue that Mr . Allen,is entitled to transportation expense deductions for miles driven from thei r home in The Dalles to his Pendleton OJD employment . Sectio n 262(a)!provides that no deduction is allowed for personal , living.; or family expenses . In general , the cost of dail y commuting°to and from work is a nondeductible personal expense . See Commissioner v . Flowers , 326 U .S . 465, 473-474 (1946) ; sec . 1 .162-2(e), Income Tax Regs . Except as allowed by respondent, petitioners' claimed transportation expenses for Mr . Allen's trips from the residence in The Dalles to his Pendleton employment are not deductible under section 162(a), nor are his- transportation expenses incurred while . commuting'between the Oregon ;~:City home and his Portland OJD employment . For the same reason""!Mrs . Allen's claimed transportation expense deductions for miles1lidriven between her Oregon City employment and th e I Oregon City rental home in 2003 are not allowed . The parties agree that in 2004 . Oregon City was petitioners tax home . However , petitioners claim that they are entitled' . ;t6 Schedule A'travel, transportation , and meals and entertainmen t expense deductions for any time that they spent outside of : Oregon City preparing their forme residence in The Dalles for-sale, .- Petitioners contend that preparing The .Dalles property for sale provided a business reason for them - to travel to The Dalles . ' l From January 2004 through June 12 2004 , petitioners rented out a portion of their property in The Dalles . . On their .2004 tax . ;?A-i return petitioners claimed not-for-profit rental expenses equa l to rent moneys received . Section 183(a) disallows any ; deduction attributable to ' ., activities not engaged in for profit except as provided under,,.-, section 183 ( b) . Section 183(b )( 1) permits deductions which ar e otherwise allowable regardless . of~profit objective . Deduction s that would be allowable if the activity were engaged,in for profit are permitted, but only to , the extent that gross income; attributable to the activity exceeds the deductions permittedby section 183 ( b)(1) . Sec . 183 ( b)(2) . Because petitioners have ; already claimed expenses equal-to,the not-for-profit renta l income, the - claimed travel'and transportation expenses . are not deductible . In 2004 petitioners claimed an exclusion of capital gains under section 121 for the sale of their home in .The Dalle ls . Thus, even if the claimed expenses were taken into account in 16 - computing ; the gain on the sale, the result would be no additional capital gains ,Petitioners' next .argument is that Mr . Allen, as an Oregon certified!court interpreter, is a . public official and unde r section 1402(c) is exempt from self-employment tax for his 2003 independent contractor earnings . Petitioners also claim that Mr . Allen is entitled to section 162 deductions in 2004 for business utility expenses and meals and-entertainment expenses whe n employed by the OJD because he is a public official . 'Petitioners conten'd!ithat'Oregon Revised Statutes sections 45 .272-45 .'.27 9 (2003) create the office of court interpreter and that there is a delegation of a portion of the sovereign powers of government accordingLto the policy statement underlying Oregon Revised Statutes section 45 .273 . Petitioners also assert that as an Oregon!! certified court interpreter, .Mr, . Allen had to ..take an official oath . Section 1401 imposes taxes on self-employment income, defined generally as the "net earnings from self-employment derived by an individual" . Sec . 1402(b) . Net earnings from self-employment are "the gross income derived by an individual from any trade or business carried-on-by-such individual, less the deductions allowed by this subtitle which are attributable to suchtrade or business" . Sec . 1402(a) . For purposes of self-employment income or net earnings from 17 - self-employment, the term 'trade'or business" has="the same meaning-as when used in section .162,(relating to trade or business expenses)", with certain exceptions . Sec . 1402(c) .4 :. Section 7701(a)(26) provides that, for purposes of the Interna l Revenue Code, ."the term 'trade or business' includes th e .performance of the functions of a, public office . However, one of the specific exceptions under section 1402(c) to the mean i ng "trade or business" fort self-employment tax purposes is th e F performance of the functions of a :public office (with a further qualification not here pertinent),. Sec . 1402(c)(1) . Section ' .1402(c)(1) thus negates, for self-employment tax purposes, the inclusion under section 77 011(a)(26) of the performance of publi c office functions within the meaning of "trade or business" , provided the exceptions are not met . Accordingly, income derive d by an individual from the performance of the functions of a public office is generally; not subject to self-employment tax,. See Porter v . Commissioner, 88 T .C . 548, 561 (1987), . revd .. other grounds 856 F .2d 1205 (8th air . 1988), affd . sub nom . "Ada I I ms v . Commissioner , 841 F .2d ,62 (3d C i-r . 1988) ; see also Ekren v" . Commissioner , T . .C . Memo . 1986-509 . The term "public official" is not defined in the Internal Revenue Code, but section 1 .1402(,c)-2 .(b), Income Tax Regs . , provides the following examples :, The President, the Vic e President , a governor , a.mayor, the Secretary of State, a member - 1 8 of Congress, a State representative, a county commissioner , judge, , a Justice ofF the peace, - a county or city attorney, . marshal, a sheriff, a constable , a registrar of deeds, or a notary[public . Caselaw demonstrates elements that courts use to define "public official" . See Porter v . Commissioner , supra at 555-558 . Ij general, An office is a public station conferred by the appointment of government . The term embraces the idea of^ .,tenure, duration, emolument and duties fixed by law .- Where an office is created, the law usually fixes its incidents, including its terms, its duties, and its compensation . * * * [ Metcalf & Eddy v . Mitchell , 269 U .S .,~514, 520 (1926) ; citations . omitted .]. 'In .,: Pope v . Commissioner , 138 F .2d'1006, 1009 (6th Cir ., 1943), the Court of-Appeals analyzed five elements to define public,~,o.ffice : (1) It must be created by the Constitution . or the Legislature, or by a municipality or other body with authority conferred by the Legislature . (2) There must be ahdelegation of a portion of the sovereign powers of government to be exercised for the benefit of the public . (3) The powers conferred and the duties to be discharged must be defined either directly or indirectly by the Legislature or through legislative ;authority . (4) The duties must be performed . independently and without control of a superior power other than the law . (5) The office must have some permanency and continuity and the officer must take an official oath . 9 The Oregon Revised Statutes provide a procedure for the qualifications and use of court interpreters but do not create an officlel6of~court interpreter as petitioners contend . SeeuOr . Rev . - 19, - Stat . secs . 45 .272-45 .279 (2003) .' Although an Oregon cour t interpreter provides a service that benefits the public and the position is subject to-Oregon laws governing hiring and compensation, . a person holding that position is not delegatedj a r I portion of the sovereign powers, of government to be exercise,d .lfo r the benefit of the public . ! When an Oregon court nterpreter becomes certified, he . or , she is afforded the opportunity to be listed on the Office of- State Court Administrator's roster of certified court interpreters as available to undertake work . This listing, a ; however, does not convey permanency and continuity . See Or .1;Rev . I f Stat . secs . 45 .272-45 .279 .' Further, Mr . Allen did not take,ah "oath of office". as petitioners contend .but rather an oath to!' ;,I, abide by the Code of Professional Responsibility for Interpreter s in the Oregon Courts, to maintain, high standards, to remain i J i neutral, and to interpret material .thoroughly_and precisely .,! Mr . Allen's work as aSpanish language interpreter for .the OJD_and Oregon , Employment Department no more entails "the performance of the functions of a public office" than the work : of a court reporter (recording and transcribing depositions), a s found in Ekren v . Commissioner , supra . The record shows Mr . Allen's' llen's self-employment as a court> :~°, interpreter to be as an independent contractor and not an office r or employee of a State or'political subdivision . Therefore,'Mr . li - 20 - Allen is subject to self-employment tax for his independen t contractor earnings . Generally, for an activity to be considered a trade o r business under section 162 it must be'engaged in for profit . . This principle is modified by section 7701( a)(26), which provides : " The term 'trade or business' includes the performance of the { functions of -a public office ." Therefore , i f a taxpaye r performs the functions of a public office, he is entitled t deduct, his expenses under section 162 . See Frank v . United . States , 577 F .2d 93, 95 (9th Cir . 1978) . Because Mr . Allen is not a public officer as a court interpreter employed by the OJD, the business utility expenses and meals and entertainmen t expenses that petitioners claim for 2004 under section 162 are not allowed . Petitioners argue that they are entitled to claimed 2003 Scheduler deductions for Mr . Allen's court interpreter profession for expenses that he incurred for a cellular phone, home Internet service, and a subscription to satellite television Spanish . language channels . Respondent .contends that petitioners are not entitled to deductions beyond what has been allowed for cellular phone expenses and are not entitled to any deductions claimed for the Internet . service and satellite television Spanis h channeliexpenses . - 21' i Petitioners claimed the full amount of Mr . Allen's cellular phone expenses incurred in'2003, and respondent allowed a portiln of the expenses as a deduction . Cellular phones, as "listed~' property", must meet strict substantiation requirements for thie'Tt .related expenses to be deductible : See secs . 274(d) ; 280F(d) (4) (A) (v) . Petitio I (cid:127)they are entitled to cellular phone ; expense deductions claime d for 2003 . or 2004 beyond what respondent has allowed . See sec . 1 .274-5T(c)(2)(C), Temporary Income Tax Regs ., 50 Fed . Reg . 460,1 7 (Nov . 6,1985) . Respondent allowed a home office'deduction for Mr . Allen's ' business use of the home in The Dalles under section 280A(c)'(1 ) for 7 months in 2003, and utility expenses have been include'dEas a part of this deduction . Costs of utilities provided to a taxpayer's home ar e disallowed as personal, living, or family expenses under sectio n 262(a) unless the taxpayer uses a : part of his home for his business . Sec . 1 .262-1(b) ;(3), Income Tax Regs . Interne t expenses have been characterized as utility expenses . See Verma v . Commissioner , T .C . Memo . 2001- 1 32 . Because petitioners have not established that the claime d utility expenses have not been included in the home offic e utility expense deduction allowed ; they are not entitled to - 22 - . 1 additional claimed Internet and satellite television deductions for 2003 . In~?,,reaching our decision , we have considered all arguments made, and, to the extent not mentioned , we conclude that they are irrelevant , moot, or without merit ., . l .To reflect the foregoing and concessions of the parties , Decision will be entere d under Rule 155 . 1