Carlson v. Wright, 2151.

• Decision Date: 02 October 1959
• Docket Number: No. 2151.,2151.
• Citation: 181 F. Supp. 568
• Parties: Roy V. CARLSON and Dorothy Carlson, husband and wife, Plaintiffs, v. Calvin E. WRIGHT, District Director, Internal Revenue Service, United States Treasury Department, Defendant.
• Court: U.S. District Court — District of Idaho

181 F. Supp. 568

Roy V. CARLSON and Dorothy Carlson, husband and wife, Plaintiffs, v. Calvin E. WRIGHT, District Director, Internal Revenue Service, United States Treasury Department, Defendant.

No. 2151.

United States District Court D. Idaho, E. D.

October 2, 1959.

COPYRIGHT MATERIAL OMITTED

Callis A. Caldwell, Pocatello, Idaho, for plaintiffs.

Ben Peterson, U. S. Dist. Atty., by J. J. Kilgariff, Department of Justice, Washington, D. C., for defendant.

FRED M. TAYLOR, District Judge.

The plaintiffs, Roy V. Carlson and Dorothy Carlson, husband and wife, seek a refund of $288.99, with statutory interest thereon, alleged to have been erroneously and illegally collected by the defendant as income tax for the year 1954. The plaintiff Dorothy Carlson is joined as a plaintiff solely by reason of her filing a joint income tax return with her husband for the year in question and all reference to "taxpayer" herein is intended to relate only to the plaintiff Roy V. Carlson.

The case was tried to the Court on May 20, 1959, and at the conclusion thereof taken under advisement. Briefs have been submitted by the respective parties and considered by the Court.

The question presented for decision is whether vehicle operating expenses incurred by Roy V. Carlson in traveling between his residence and certain jobs on which he was employed in the year 1954 are deductible as trade or business expenses under § 162(a) (2) of the Internal Revenue Code of 1954, 26 U.S.C.A. § 162(a) (2), or are personal expenses and not deductible under § 262 of the Internal Revenue Code of 1954, 26 U.S. C.A. § 262.

Roy V. Carlson is a nonitinerant electrician and a member of Local Union 449, International Brotherhood of Electrical Workers. He began his apprenticeship as an electrician in 1942, and has since that time, with the exception of three years while in the Army, pursued his trade in the area under the jurisdiction of the said Local. Since 1941 he has maintained and resided with his family at a home on Route 1, North Pocatello, Idaho. The area under the jurisdiction of Local Union 449 covers the whole of Southeastern Idaho, and said Local maintains a permanent business office in Pocatello, Idaho.

The travel expenses which the taxpayer claims to be deductible are those incurred in travel between his home and jobs on which he was employed in the year 1954 as follows: first, a job with the Cache Valley Electric Company at the AEC site beginning February 8, 1954, and terminating April 9, 1954; second, a job with H. T. Electric Company at the Monsanto Plant near Soda Springs, Idaho, lasting from April 12 through April 15, 1954; third, a job with the Reynolds Electric and Engineering Company at the AEC site, commencing May 15, 1954, and continuing into February of 1955, at which time the taxpayer, fearing the termination of this job, quit to take another job at the AEC site with the Foothill Electric Company.

The Atomic Energy Commission (AEC) site is Government property maintained exclusively for atomic energy purposes. It is located in the desert area near Arco, in Southeastern Idaho, and is approximately 30 miles in width and 45 to 50 miles in length. The area surrounding the site is also desert and at the times relevant here, there was no available places for habitation on or within 20 to 25 miles of the entrance to the site. The jobs upon which plaintiff worked at the AEC site in 1954 were located about 35 miles from such entrance.

In his 1954 income tax return, the taxpayer claimed a deduction of $1,389.30 as automobile expenses at the rate of six cents per mile for 23,155 miles traveled in going to and from his home and all of said above mentioned job sites. Said deduction was denied by the District Director of Internal Revenue and on demand the plaintiff taxpayer paid an additional tax of $288.99 which he now seeks to have refunded with interest.

The defendant does not question the total miles traveled or the reasonableness of the six cents per mile as the expense in operating an automobile.

The record fails to disclose how many trips were made and the number of miles traveled by taxpayer in his automobile on each of said jobs. Such information cannot be computed from the evidence except as to the H. T. Electric Company job at the Monsanto plant near Soda Springs, Idaho.

The relevant provisions of the statute governing the claimed deductions are set out at 26 U.S.C.A. § 162 as follows:

"§ 162(a) In general.—There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including * * *

"(2) traveling expenses (including the entire amount expended for meals and lodging) while away from home in the pursuit of a trade or business; * * *."

Treasury Regulations on Itemized Deductions for Individuals and Corporations (1954 Code) provide:

"Section 1.162-2 Traveling Expenses.— * * * (e) Commuters' fares are not considered as business expenses and are not deductible."

It appears that the traveling expenses involved here should not be considered commuting expenses. Crowther v. Commissioner of Internal Revenue, 9 Cir., 1959, 269 F.2d 292. Cf. Chandler v. Commissioner of Internal Revenue, 1 Cir., 226 F.2d 467; Emmert v. United States, D.C., 146 F.Supp. 322.

The problem of the deductibility of traveling expenses of nonitinerant construction workers has proved, in general, to be a difficult one. The courts seem to have decided each case on the facts and circumstances existing therein.

It is stated in Commissioner of Internal Revenue v. Peurifoy, 4 Cir., 254 F.2d 483, at page 486:

"When a taxpayer accepts employment at a place removed from the residence he maintains for his family his travel and maintenance expense is not usually deductible under § 23(a) (1) (A). Commissioner of Internal Revenue v. Flowers, 326 U.S. 465, 66 S.Ct. 250, 90 L.Ed. 203. Indeed under the rule of Commissioner of Internal Revenue v. Flowers the expense, in order to be deductible, must be `required by the exigencies' of the employer's business, not those of the calling of the employee. `The job, not the taxpayer's pattern of living, must require the travel.' Carragan v. Commissioner, 2 Cir., 197 F.2d 246, 249. That an employee for reasons personal to himself and his family maintains a home at a distance from his business does not serve the business of the employer and ordinarily his travel expense and the expense of his maintenance at either place is not deductible. Commissioner of Internal Revenue v. Flowers, supra, Barnhill v. Commissioner, 4 Cir., 148 F.2d 913, 159 A.L.R. 1210."

The above cited case was affirmed in a per curiam opinion, Peurifoy v. Commissioner of Internal Revenue, 358 U.S. 59, 79 S.Ct. 104, 3 L.Ed.2d 30. See also Commissioner of Internal Revenue v. Janss, 8 Cir., 260 F.2d 99; Claunch v. Commissioner of Internal Revenue, 5 Cir., 264 F.2d 309. To the rule announced in the Flowers case stated above, the United States Supreme Court, in its Peurifoy opinion, noted an exception, stating 358 U.S. 59, 79 S.Ct. 105:

"To this rule, however, the Tax Court has engrafted an exception which allows a deduction for expenditures of the type made in this case when the taxpayer's employment is `temporary' as contrasted with `indefinite' or `indeterminate'. Compare Schurer v. Commissioner, 3 T.C. 544; Leach v. Commissioner, 12 T.C. 20; Albert v. Commissioner, 13 T.C. 129, with Warren v. Commissioner, 13 T.C. 205; Whitaker v. Commissioner, 24 T.C. 750. The respondent does not in the present case challenge the validity of this exception to the general rule.

"Resolution of this case is presented to us turns, therefore, upon a narrow question of fact—Was the petitioners' employment `temporary' or `indefinite'?"

A literal application of a requirement that travel expenses, to be deductible, must be required by the exigencies of the business of the taxpayer's employer, and not those of the calling of the employee, would necessitate a holding for the defendant in this case.

However, several decisions appear to view the Flowers decision is limited to its factual situation and as only standing for the proposition that travel expenses caused by the taxpayer in keeping his home at a distance from his business or employment for his own purposes are not ordinary and necessary travel expenses required in the pursuit of a trade or business within section 162, and hence not deductible. Cf. Sherman v. Commissioner, 16 T.C. 332 (acquiesced); Chandler v. Commissioner of Internal Revenue, 1 Cir., 226 F.2d 467; Crowther v. Commissioner of Internal Revenue, supra. To be deductible such expenses must be due to the exigencies of the taxpayer's trade or business or those...