Bauer v. Commissioner, Docket No. 3609-71.

• Decision Date: 17 May 1973
• Docket Number: Docket No. 3609-71.
• Citation: 32 TCM (CCH) 496,1973 TC Memo 111
• Parties: R.J. Bauer v. Commissioner.
• Court: U.S. Tax Court

32 TCM (CCH) 496

1973 TC Memo 111

T.C. Memo. 1973-111.

R.J. Bauer v. Commissioner.

Docket No. 3609-71.

United States Tax Court.

Filed May 17, 1973.

R.J. Bauer, pro se, 2525 E. Mulberry St., Fort Collins, Colorado. Clarence F. Frazier, Jr., for the respondent.

Memorandum Findings of Fact and Opinion

SIMPSON, Judge:

The respondent determined a deficiency of $2,140.42 in the petitioner's Federal income tax for 1966. The issues to be decided in this case are whether the petitioner, a worker on construction projects, was away from home for tax purposes, how much per diem he received during the year, and whether he is entitled to deduct any unreimbursed automobile expenses.

Findings of Fact

Some of the facts have been stipulated, and those facts are so found.

The petitioner, R.J. Bauer, was a resident of Fort Collins, Colorado, at the time his petition was filed in this case. He filed a joint Federal income tax return for the year 1966 with the director of international operations, Washington, D.C. On such return, the petitioner set forth as his address the address of his father which he used as his mailing address. Also, on such return, he signed the name "Sandra L. Bauer," intending it to be the signature of his purported second wife, and not that of his first wife, who filed an individual income tax return for the year 1966 solely in her own name.

The petitioner married Sandra L. Bauer in 1959, and one daughter, Tracey L. Bauer, was born from this marriage. From 1961 to 1963, the petitioner and his family resided in Canoga Park, California, where he worked as an x-ray technician-film processor. In 1963, the petitioner and his family moved to Daytona Beach, Florida, where he began working for the United States Testing Company at Cape Kennedy. In 1964, the petitioner and his family moved to Coral Gables, Florida, where he was engaged by Pittsburgh Testing as a non-destructive test supervisor in the construction of power plants being erected in Cocoa and Fort Lauderdale, Florida. A non-destructive tester tests castings and fittings through the use of radioactive isotopes and special film. As a result of such procedure, an object tested is not destroyed in the course of an examination.

In March 1965, the petitioner moved to the Baltimore, Maryland, area and began working for Ebasco Services, Incorporated (Ebasco), on a power plant project nearby. However, his family did not accompany him, as 2 weeks prior to such move, the petitioner and his wife, Sandra L. Bauer, separated by mutual consent. She and Tracey moved to Eugene, Oregon, where they continued to reside through 1966. The petitioner sent no money for the support of his wife and did not cohabit with her during their separation. On January 9, 1967, Sandra L. Bauer obtained a divorce from the petitioner.

The petitioner worked at the project as a nondestructive test supervisor until March 15, 1966. Upon completion of such project, he moved to Colorado City, Texas, to work as a nondestructive test supervisor at another power plant being constructed by Ebasco.

In Colorado City, the petitioner lived in a hotel which was located approximately 6 miles from the jobsite. At the jobsite, the petitioner's work trailer, in which the radioactive isotopes were stored, was approximately three-quarters of a mile from the most distant spot at which tests were conducted. It was the petitioner's practice to use his automobile to transport the radioactive isotope, which was inside a 75-pound lead container, and the film, which measured 17 feet in length, from his work trailer to the test site. He generally conducted 2 or 3 tests in an afternoon, and accordingly, made 2 or 3 trips from his trailer. On occasion, he was required to conduct additional tests during off hours, and so he made additional trips from the hotel to the jobsite. The petitioner's employer did not require use of an automobile for the onsite trips from the work trailer to the test site. However, when use of the petitioner's automobile was required for other tasks, the petitioner was reimbursed at the rate of 8 cents per mile. The petitioner also received an allowance of $10 per day in addition to his salary for 82 days while employed at the Colorado City project.

In late March 1966, the petitioner met Sandra L. Baker, with whom he began cohabiting mostly on weekends. She and her two sons by a previous marriage lived with her mother in Dallas, Texas. In 1966, the older son was approximately 4 years old, and the younger son was under 2 years old. Either the petitioner left Colorado City on Friday evenings to visit Sandra L. Baker in Dallas, or when he was required to work on Saturday, she visited him in Colorado City. On such weekends, he gave her money to reimburse her mother for rent and groceries and to help out with the children.

At the completion of the Colorado City project in June 1966, Ebasco transferred the petitioner to a project in Dallas. While in Dallas, he resided in the home of Sandra L. Baker's mother along with Sandra and her two sons. Within approximately 2 weeks of his arrival in Dallas, the petitioner left for a 2-week trip to New York City, at his employer's request, in connection with a reassignment to Japan. He drove to and from New York. Upon his return to Dallas, the petitioner hired and trained his replacement on the Dallas project for his employer. At the end of 2 weeks, he drove to Los Angeles, California, the point of embarkation for Japan, and while there, vacationed for 2 weeks with his father. From Los Angeles, the petitioner flew to Tokyo, Japan, and arrived on August 13, 1966.

The petitioner contracted to work in Japan for 3 years as a welding engineer at a jobsite in Tsuruga, Japan. Under such contract, he was to receive an annual salary of $10,000, a premium for overseas service, and certain other fringe benefits. Prior to his arrival in Tsuruga, the petitioner was assigned to a project in Tokyo, and during such assignment, which was intended to last 3 months, he was to receive an allowance of $25 per day, payable in yen, in addition to his salary. His assignment in Tokyo lasted longer than expected, and by January 1, 1967, he still had not arrived in Tsuruga.

Late in December 1966, Sandra L. Baker and her two sons flew to Japan at the expense of the petitioner's employer. Sandra L. Baker flew at full fare, the elder son flew at half fare, and the younger son flew at 10 percent of full fare. Upon her arrival, it was discovered that the petitioner's employer would not assume responsibility for Sandra L. Baker and her sons unless she and the petitioner were formally married. Accordingly, the petitioner and Sandra L. Baker went through a formal ceremony, even though both knew that Sandra L. Bauer had not, at that time, obtained a divorce. Such ceremony was registered with United States authorities. Sandra L. Baker and her two sons returned to the United States in the early part of January 1967, and she divorced the petitioner in March 1967. The petitioner returned to the United States in September 1967.

For his services in Japan, the petitioner's salary in 1966 amounted to $4,430.24. In addition, while in Japan, he received a living allowance in the amount of $3,500.00 in 1966.

In his notice of deficiency, the respondent determined that the petitioner received $4,430.24 in wages for services in Japan, $3,500.00 of income in the form of per diem allowances while in Japan, $2,120.00 of income in the form of per diem allowances while in the United States, and $720.00 of income representing the value of transportation furnished by the petitioner's employer for Sandra L. Baker and her 2 sons. In addition, the respondent denied deductions of $5,175.00 claimed as meals and lodging expense while in Japan and $1,098.00 claimed as automobile expense arising from the petitioner's moves to Colorado City from Baltimore, to Dallas from Colorado City, to and from New York City from Dallas, for transporting his test materials at the Colorado City jobsite, and for the additional trips to the jobsite. Finally, the respondent allowed a deduction of $71.55 representing a moving expense deduction for the move to Los Angeles, the point of embarkation to Japan, which was not claimed by the petitioner.

Opinion

In this case, we must decide several issues: whether the petitioner was away from home for tax purposes during 1966; how much he received as a per diem allowance while he was working in the United States and while he was working in Japan in 1966; how much he received as wages while he was working in Japan; whether he incurred any unreimbursed automobile expenses which he is entitled to deduct; and whether he is taxable on amounts which his employer paid as air fare for Sandra L. Baker and her 2 sons.

The petitioner contends that throughout 1966 he was away from home, and therefore, he is entitled to a deduction for the per diem allowances received in the United States and Japan and also for the cost of meals and lodging incurred in Tokyo, which was $5,175.00. In his petition, he asserted that while in the Baltimore area, his home was with Sandra L. Bauer on the West Coast; that while in Colorado City, it was with Sandra L. Baker in Dallas; and that while in Tokyo, it was in Tsuruga. He also claims that his 3-year assignment in Japan was for a temporary period. The respondent contends that the petitioner was never away from home and is, therefore, entitled to neither deduction. Accordingly, it is the respondent's position that the per diem allowances were merely additional compensation for personal expenses which are not deductible. See sec. 262, Internal Revenue Code of 1954;¹ Commissioner v. Flowers 46-1 USTC ¶ 9127, 326 U.S. 465 (1946); Darrell Spear Courtney Dec. 23,588, 32 T.C. 334 (1959). Similarly, he contends the cost of meals and lodging was personal in nature, and therefore, such expense was not deductible under section 262. In addition, the respondent contends...