Opinion ID: 461409
Heading Depth: 2
Heading Rank: 1

Heading: Expenses Incurred Away From Home.

Text: 15 In most cases, a taxpayer's costs of meals, lodging, and traveling are considered personal expenses, and therefore non-deductible under 26 U.S.C. Sec. 262. See also Treas.Reg. Sec. 1.262-1(b)(5). Section 162(a)(2), however, permits deduction of such expenses if they were incurred away from home in the pursuit of business. By allowing taxpayers to deduct living expenses while away from home, section 162(a)(2) mitigate[s] the burden of the taxpayer[s] who, because of the exigencies of [their] trade or business, must maintain two places of abode and thereby incur additional and duplicate living expenses. Ronald D. Kroll, 49 T.C. 557, 562 (1968). 16 This court defines home within section 162(a)(2)'s away from home requirement as the taxpayer's principal place of business. Weiberg v. Commissioner, 639 F.2d 434, 437 (8th Cir.1981). Therefore, [w]hen a taxpayer who maintains a residence in the vicinity of [the taxpayer's] principal place of employment is required to travel to a different location for temporary work, [the taxpayer] is considered to be 'away from home.'  Deamer v. Commissioner, 752 F.2d 337, 339 (8th Cir.1985) (quoting Michel v. Commissioner, 629 F.2d 1071, 1073 (5th Cir.1980) ). The taxpayer's employment in the new location is temporary if its termination could be reasonably foreseen within a short time. 17 If, on the other hand, the taxpayer's job prospects in the area are likely to result in employment lasting a subtantial or an indefinite period of time, the taxpayer's home within section 162(a)(2) shifts to the new location. See Curtis v. Commissioner, 449 F.2d 225, 227-28 (5th Cir.1971); Jenkins v. Commissioner, 418 F.2d 1292, 1293-94 (8th Cir.1969). The tax home moves regardless of whether the taxpayer maintains a personal or family residence near the former tax home.  'The job, not the taxpayer's pattern of living,' is the crucial matter. Cockrell v. Commissioner, 321 F.2d 504, 507 (8th Cir.1963) (quoting Carragan v. Commissioner, 197 F.2d 246, 249 (2d Cir.1952) ). Therefore, expenses incurred by the taxpayer at the new employment location are not deductible under section 162(a)(2), because the expenses did not arise when the taxpayer was away from home. 3 18 In this case, the district court concluded that Ellwein's prospects for each job, considered separately, were for temporary employment. On further analysis, the court found, however, that Ellwein's prospects in the area surrounding Pick City were, as a whole, for employment lasting an indefinite or substantial period of time. The court therefore concluded that Ellwein's tax home was in Pick City, and disallowed Ellwein's claimed section 162(a)(2) deductions. 19 Ellwein argues that the court erred, as a matter of law, in considering his cumulative job prospects in the Pick City area. We disagree. Determination of a taxpayer's principal place of business requires consideration of all the taxpayer's job prospects within the employment area. That Ellwein was employed at a variety of jobsites within the Pick City area does not change the indefinite or temporary nature of his employment prospects. See Curtis, 449 F.2d at 227-28 (5th Cir.1971). Although disputed, the facts as found by the district court indicated that Ellwein should have expected to remain employed in the area for an indefinite or substantial length of time. Thus the legal conclusion followed that Ellwein's home within section 162(a)(2) shifted to Pick City. As we observed about the temporary or indefinite test in Frederick v. United States, 603 F.2d 1292, 1295 (8th Cir.1979), [t]he relevant fact is the taxpayer's prospects for continued employment. 20 Ellwein also contends that the court erred in finding that his employment prospects in the Pick City area were indefinite, rather than temporary. The issue of whether the taxpayer's prospects for continued employment are temporary or indefinite is a question of fact. Peurifoy v. Commissioner, 358 U.S. 59, 60-61, 79 S.Ct. 104, 105-06, 3 L.Ed.2d 30 (1958). The fact finder must objectively determine the length of employment the taxpayer should have foreseen in the new location. See Dahood v. United States, 747 F.2d 46, 49 (1st Cir.1984). The taxpayer's home under section 162(a)(2) shifts to the new employment location at that point in time when the facts indicate that the taxpayer should have anticipated indefinite or substantially lengthy employment in the area. See Ham v. United States, 408 F.2d 671, 672 (6th Cir.1969). 21 We cannot say that the district court's finding that Ellwein had indefinite job prospects in the Pick City area was clearly erroneous. Testimony at trial indicated that the construction of several power plants within the vicinity of Pick City meant prospects for indefinite or substantially lengthy employment for boilermakers in 1979. Moreover, substantial evidence supported the trial court's finding that Ellwein personally expected to be employed near Pick City for a substantially lengthy period of time. Ellwein moved his trailer to Pick City when he obtained a job twenty-five miles away at the Coal Creek plant. Two of his children lived there with him for varying lengths of time. Ellwein also had other family connections in the Pick City vicinity. Further, Ellwein had no business connections in the area of Lakota, his former tax home, and did not attempt to establish such connections by seeking employment in that area. Finally, Ellwein was in fact employed in the Pick City area from 1978 to 1983, a substantially long period of time. [T]he duration of a taxpayer's actual employment can have considerable probative value in [the fact finder's] difficult assessment [of the taxpayer's employment prospects], which must often entail speculation about conditions in a past tax year. Dahood, 747 F.2d at 50. 22 The district court was confronted with a close question of fact, with evidence pointing in both directions. The burden was on Ellwein to prove by a preponderance of the evidence that his employment prospects in the Pick City area were temporary. Deamer, 752 F.2d at 339. Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous. Anderson v. City of Bessemer City, --- U.S. ----, 105 S.Ct. 1504, 1512, 84 L.Ed.2d 518 (1985); Perfetti v. Commissioner, 762 F.2d 638, 640 (8th Cir.1985). Consequently, we hold that the district court's conclusion that Ellwein failed to carry his burden of proof was not clearly erroneous. 23 We therefore affirm the district court's finding that Ellwein's tax home was in Pick City, North Dakota, and its disallowance of Ellwein's claimed section 162(a)(2) deductions. 24