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

Heading: Commuting Expenses.

Text: 25 Based on its finding that each of Ellwein's 1979 jobs was individually temporary, the district court allowed Ellwein's claimed deduction for his workday transportation costs between Pick City and his jobs under 26 U.S.C. Sec. 162(a). The Government contends that the court erred in not considering whether Ellwein's daily commute took him outside his regular area of abode. 26 Section 162(a) permits a deduction for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business. Commuting expenses are generally considered nondeductible personal expenses under section 262. Fausner v. Commissioner, 413 U.S. 838, 839, 93 S.Ct. 2820, 2821, 37 L.Ed.2d 996 (1973); Treas.Reg. Sec. 1.262-1(b)(5). Courts allow deductions for commuting expenses, however, when the expenses are incurred for business purposes under section 162(a). 27 Courts apply the temporary or indefinite test to determine whether the commuting expenses resulted from the exigencies of the taxpayer's business. 4 See, e.g., Dahood, 747 F.2d at 49; Kasun v. United States, 671 F.2d 1059, 1061 (7th Cir.1982); Frederick, 603 F.2d at 1295. The taxpayer's ability to choose where to reside largely depends on the taxpayer's expected term of employment. Frederick, 603 F.2d at 1295. When the taxpayer should expect employment continuing an indefinite or substantial period of time, the taxpayer can choose to live near the job or to live distant from the employment and incur travel expenses. If the taxpayer chooses the latter, the choice is a personal decision, not compelled by business necessity. Id. Conversely, employment expected to last only a short or temporary time may leave the taxpayer with little choice but to live far from work. In this circumstance, the taxpayer incurs the commuting expenses through business necessity, permitting deduction under section 162(a). Id. 5 28 This rationale holds true only when the taxpayer must commute to a worksite distant from his or her home. Without such a requirement, the absurd result would obtain of permitting a taxpayer, who commuted to a succession of temporary jobs, to deduct commuting expenses, no matter how close these jobs were to [the taxpayer's] residence. Dahood, 747 F.2d at 48. Therefore, commuting expenses are deductible only when it appears probable that a taxpayer's employment outside the area of [the taxpayer's] regular abode will be for a 'temporary' or 'short' period of time. See Cockrell, 321 F.2d at 507 (quoting Wright v. Hartsell, 305 F.2d 221, 224 (9th Cir.1962) (emphasis added) ). 29 The district court failed to specifically find that each of Ellwein's temporary jobs was so distant from his Pick City residence and tax home that his business deduction for commuting expenses was justified. Although the court's memorandum and order denying the Government's motion to amend the judgment does state that Ellwein's temporary jobsites were a considerable distance from Pick City, this conclusory statement fails to indicate whether the district court gave appropriate weight to the essential factor of distance, and whether the jobs near Beulah were within the work area of Pick City, that city being the taxpayer's tax home and abode, for tax purposes. We therefore remand for further consideration on this issue. 30 On remand, we direct the district court to enter judgment disallowing Ellwein's claimed deduction for his commuting expenses between Pick City and the Coal Creek plant. Ellwein obtained employment at Coal Creek in late 1978. Shortly after he began work there, Ellwein moved his trailer to Pick City, which was approximately twenty-five miles from the plant. We must therefore conclude that the taxpayer located his trailer at Pick City in order to conveniently commute to his job at Coal Creek and that the Coal Creek plant fell within the area of the taxpayer's tax abode at Pick City. 31 On the issue of whether Ellwein's employment at the Coyotte plant and the Antelope Valley plant, both near Beulah, North Dakota, fell inside or outside the work area of his tax abode at Pick City, the district court may make necessary findings from the record, or permit the parties to present further evidence on this issue. 32 We therefore affirm on Ellwein's appeal and reverse in part and remand in part the district court's decision permitting Ellwein to deduct his 1979 traveling expenses between Pick City and his jobsites.