Court Opinion

ID: 4481728
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:15:03.807217+00
Date Added: 2024-06-11T14:54:00.904754
License: Public Domain

Simpson, Judge: The respondent determined a deficiency of $364.45 in the income tax of the petitioners for 1967. The issue for decision is whether one of the petitioners was away from home for tax purposes during parts of the taxable year in issue. FINDINGS OF FACT Some of the facts have been stipulated, and those facts are so found. The petitioners, Truman C. Tucker and Birdie Jo Tucker, filed a joint Federal income tax return for 1967 with the district director of internal revenue, Nashville, Tenn. They maintained their residence in Knoxville, Tenn., when the petition was filed in this case. Mr. Tucker will be referred to as the petitioner. The petitioner and his family moved to a small farm in the vicinity of Knoxville, Tenn., in late 1965. He worked as an insurance salesman in the Knoxville area until March 1966. At that time, he enrolled as a student in Tennessee Wesleyan College in Athens, Tenn., where he had studied previously. The college was located about 65 miles from the farm, and while he was a student, he lived in a house that he owned near the college, although his wife and child remained at the farm near Knoxville. The petitioner graduated in the summer of 1966, with a major in business administration and a minor in education. He desired to be a teacher, and during the summer of 1966, he inquired in and around the Knoxville area as to the availability of teaching positions, but could find none. Through a notice at Tennessee Wesleyan College, he learned of an available teaching position in Trenton, Gra., with the school system of Dade County, beginning in August 1966. The position required 9 months and 2 weeks of teaching. Because the petitioner believed that he could not find work in the Knoxville area for that school year, he applied for and obtained the position. He went to Dade County with the intent to hold that position no longer than 1 school year. From August 19'66 until June 1967, the petitioner taught in the school system of Dade County, and lived in the area of Trenton. His wife and child remained during that entire time at their farm near Knoxville, Term. The child attended school in the Knoxville area, and Mrs. Tucker was employed at the University of Tennessee in Knoxville where she had worked continuously since 1965. 'In April 1967, the Dade County Board of Education voted to rehire the petitioner for the following school year, and arranged for a renewal of his Georgia temporary teaching certificates. However, the petitioner then informed the school personnel that he would not accept the position for another year because he wanted to return to the Knoxville area. The petitioner spent the summer of 1967 at his farm. He did not hold a job during that summer, 'but did some work around his farm, including digging a pond. He made substantial efforts to find a position as a teacher in Knoxville, in Knox County, and in surrounding cities and counties located in proximity to his farm; but those efforts were unsuccessful. In August 1967, when the petitioner traveled to North Carolina to pay taxes on another farm that he owned there, he learned that there was an available teaching position in Murphy, N.C. As it was getting late in the summer and he needed a position, and apparently he could not obtain one in the Knoxville vicinity, he accepted the position in Murphy. This position called for 9 months and 1 week of teaching. Again, the petitioner went to the area of his employment to live, while his wife and child remained on the Tennessee farm. His wife continued to work in Knoxville. Soon after the school year was under way, the petitioner realized that the arrangement whereby his family remained in Tennessee while he worked and lived in a distant city was unsatisfactory. The duplicate living expenses proved onerous. Therefore, he asked his employers at Murphy to release him from his contract and allow him to leave midway during the school year. He planned to leave at the Christmas vacation, but the superintendent persuaded him to stay until the school could find a replacement. A replacement was found in February 1968, and the petitioner returned to his farm near Knoxville. He has remained in the Knoxville area since then. He was unemployed except for some odd jobs from February 1968 until September 1969, when he found employment as a teacher in the Knoxville school system. The petitioner believed that his difficulty in finding a teaching position in the Knoxville vicinity was attributable to the fact that many graduates of the University of Tennessee in Knoxville decided to stay in that area to teach, resulting in a surplus of teachers. It is undisputed that the petitioner incurred total living expenses of $1,330 while in Georgia and North Carolina during 1967. The petitioner’s farm near Knoxville, Tenn., was not a moneymaking venture in 1966,1967, or 1968. No produce or cattle were sold from the farm in those years. The 1967 tax return reports that the sole income on that farm and two others owned by the petitioners was $1,219.'61 in agricultural program payments, and that the operations of those farms produced a loss of $260.41. The petitioners ceased residing on the farm in August 1968 when they moved to a house in Knoxville. OPINION We must decide whether the petitioner is entitled to deduct the living expenses which he incurred in 1967 in Dade County, Ga., and Murphy, N.C., while working as a schoolteacher in those areas. Personal living expenses are ordinarily nondeductible. Sec. 262, I.R.C. 1954.1 However, section 162(a) (2) allows a taxpayer to deduct certain living expenses paid or incurred while away from home in the pursuit of a trade or business. Since the amount of the living expenses incurred by the petitioner is not in dispute, the deductibility of such expenses depends upon whether he was “away from home in the pursuit of a trade or business” within the meaning of section 162(a) (2) while in Georgia and North Carolina. In Commissioner v. Flowers, 326 U.S. 465 (1946), rehearing denied 326 U.S. 812 (1946), the Supreme Court held that a taxpayer could not deduct the expenses of traveling to and living at his place of employment, except when the traveling was required by the exigencies of his employment, rather than by his “personal convenience and necessities.” In that case, the taxpayer’s principal place of employment was Mobile, Ala., but he continued to live in Jackson, Miss., and traveled to Mobile whenever his work required him to be there. The Court found that such travel was not required by the exigencies of his employment, but resulted from his personal choice to live in Jackson. Since his principal employment was in Mobile, he could reasonably have been expected to move there, and then such travel would have been unnecessary. Since the Flowers decision, we have had a multitude of cases in which it was necessary to decide whether a taxpayer was traveling because of the exigencies of Ms employment, or whether the travel resulted from his personal choice as to a place to live. It has been difficult to develop precise guidelines, and the questions of whether the employment was temporary or indefinite and where the taxpayer’s “home” was located for tax purposes have often been treated as factual ones. As a result of this case, we have reexamined the criteria for determining when a taxpayer should be treated as away from home and allowed to deduct his personal living expenses, and we have concluded that in this case, and in other similar cases, the taxpayer should not be treated as away from home for tax purposes. The purpose of allowing the deduction of living expenses while a taxpayer is “away from home” is “to mitigate the burden of the taxpayer who, because of the exigencies of his 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). In furtherance of this purpose, when a taxpayer with a principal place of employment goes elsewhere to take work which is merely temporary, he may deduct the living expenses incurred at the temporary post of duty, because it would not be reasonable to expect him to move Ms residence under such circumstances. Emil J. Michaels, 53 T.C. 269 (1969); Ronald D. Kroll, supra. For this purpose, temporary employment is the type which can be expected to last for only a short period of time. Beatrice H. Albert, 13 T.C. 129, 131 (1949). On the other hand, if a taxpayer chooses for personal reasons to maintain a family residence far from his principal place of employment, then his additional traveling and living expenses are incurred as a result of that personal choice, and are therefore not deductible. Commissioner v. Flowers, supra; Ronald D. Kroll, supra at 561-562; Floyd Garlock, 34 T.C. 611, 614 (1960); Mort L. Bixler, 5 B.T.A. 1181, 1184 (1927). Similarly, if a taxpayer accepts indefinite employment outside the vicinity in which he lives, but he does not change his family residence, the travel to his new place of employment and the additional living costs wMch he incurs there result, not from his employment, but from his decision not to move his residence. Rendell Owens, 50 T.C. 577 (1968); Maurice M. Wills, 48 T.C. 308 (1967), affd. 411 F. 2d 537 (C.A. 9, 1969). Thus, the deductibility of traveling expenses and duplicate living expenses depends upon the ultimate question of whether the taxpayer, under all the circumstances, could reasonably have been expected to move his residence to the vicinity of his employment. When the appropriate criteria are applied to the circumstances of this case, we find that the petitioner was not away from home in the pursuit of his trade or business within the meaning of section 162(a) (2) while in Georgia and Horth Carolina. During the entire time with which we are concerned, the petitioner had no business connection with the Knoxville area. Although he had worked there briefly as an insurance salesman, he gave up that occupation in early 1966 when he returned to college. Furthermore, at the time the petitioner sought the teaching jobs, he had no indication of when, if ever, he could obtain the type of position he wanted in the Knoxville area, in light of (1) the apparent plentiful supply of teachers there, and (2) the total lack of available teaching positions anywhere in the area as revealed by the petitioner’s diligent search. By any reasonable standard, the prospects of employment in that area must have seemed bleak, or at best, unpromising; yet, the petitioner chose to keep his family residence there for reasons of personal choice that were despite, rather than because of, the exigencies of his trade or business. The petitioner argues that he should receive the benefit of the exception carved out of the tax-home rule to accommodate taxpayers with temporary jobs. However, this exception was intended to operate when the taxpayer’s trade or business required him to travel, and when the duration of each job was such as to make it unreasonable to expect him to move his family. It seems manifestly clear, however, that the trade or business of being a schoolteacher, working for one school district and presumably in one school, is not the sort of occupation which requires the taxpayer to travel about or to maintain additional living quarters away from his established residence. Furthermore, while a job duration of 6 or 9 months might be short enough under some circumstances to merit a finding that it would be unreasonable to expect the taxpayer to move his family, we cannot reach such a conclusion here, when the taxpayer had no business ties to the area of his previously established residence, and when the prospects for employment in his chosen profession were better away from that area than in it. Indeed, when a new college graduate finds that the area where he lives offers no employment opportunities in his field, and the prospects for future employment there are poor, it seems more reasonable for him to move his family to a locale offering more opportunities, than to insist steadfastly on keeping his family in the same place while he himself goes elsewhere to work. When a taxpayer chooses the latter course, it is clearly motivated by personal reasons unrelated to his trade or business, and as such, his additional living expenses are nondeductible under section 262. This case is distinguishable from the situations in which a taxpayer’s trade or business requires him to take jobs of necessarily brief duration in disparate localities away from the area of his personal residence, and in which a taxpayer is sent temporarily to a distant locale at the request and direction of his employer, and in which a taxpayer retains business ties in the place from whence he has come. See Hollie T. Dean, 54 T.C. 663 (1970); Emil J. Michaels, supra; and Laurence P. Dowd, 37 T.C. 399 (1961). In the present case, the onerous burden of duplicate living expenses is attributable to the petitioner’s personal choice, which was in no way dictated by the demands of his business. See Commissioner v. Flowers, supra. We point out that the petitioner’s testimony made it amply clear that his farm was not a trade or business being conducted for profit, so that we are not faced with the situation of a taxpayer having two businesses simultaneously in different areas. Nor does the fact of the petitioner’s wife’s continued employment in Knoxville support the argument that Knoxville was the petitioner’s “home” for tax purposes. Ronald D. Kroll, supra at 565; Robert A. Coerver, 36 T.C. 252 (1961), affirmed per curiam 297 F. 2d 837 (C.A. 3, 1962); Arthur B. Hammond, 20 T.C. 285 (1953), affd. 213 F. 2d 43 (C.A. 5,1954). Because of the petitioner’s concessions on other isues, Decision wild be entered for the respondent. Reviewed by the Court.   All statutory references are to tlie Internal Revenue Code of 1954.