Marple v. Commissioner of Internal Revenue, No. 24329-04S (U.S.T.C. 5/21/2007)
| Decision Date | 21 May 2007 |
| Docket Number | No. 24329-04S.,24329-04S. |
| Parties | DANIEL P. AND GLENNA J. MARPLE, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent |
| Court | U.S. Tax Court |
This case was heard pursuant to the provisions of section 7463 of the Internal Revenue Code in effect when the petition was filed.1 Pursuant to section 7463(b), the decision to be entered is not reviewable by any other court, and this opinion shall not be treated as precedent for any other case.
Respondent determined a deficiency of $4,800 in petitioners' 2002 Federal income tax. After concessions,2 the issues are: (1) Whether petitioners are entitled to deduct medical and dental expenses in an amount greater than that allowed by respondent, and (2) whether petitioners are entitled to deduct employee business expenses in amounts greater than those allowed and conceded by respondent.
At all relevant times, including throughout 2002 and at the time they filed their petition, petitioners resided in Burlington, West Virginia (Burlington). As of the date of trial, petitioners had lived in Burlington for approximately 33 years, and their four children lived in the surrounding area.
Petitioner Daniel P. Marple is a sheet metal worker by trade and a member of the Sheet Metal Workers' International Association, Local Union No. 100 (Local 100). The jurisdiction of Local 100 includes Washington, D.C., the States of Maryland and Virginia, and seven counties in West Virginia (Berkeley, Grant, Hampshire, Hardy, Jefferson, Mineral, and Morgan).3 During the relevant period, Mr. Marple procured work through the Local 100 union hall in Cumberland, Maryland (Cumberland),4 which was located approximately 23 miles from petitioners' residence in Burlington.5 Mr. Marple was considered a sheet metal worker traveler by Local 100 and was referred by Local 100 to contractors for nonpermanent employment on jobs involving sheet metal work. After a job ended, Mr. Marple would report to the Local 100 union hall in Cumberland and sign the out-of-work list for referral to a contractor for employment on another job. Since 1998, Mr. Marple has worked for at least 18 different contractors on Local 100-referred jobs, primarily at locations in West Virginia and the adjacent State of Maryland. Some of these job locations were closer to petitioners' home area of Burlington or its environs, such as Romney, West Virginia, and Mineral County, West Virginia, and some were further, such as Frederick, Maryland, and Johnstown, Pennsylvania.
In June 2001, Mr. Marple was sent by Local 100 to work for API, Inc. (API) on a job at the Mount Storm Power Station in Mount Storm, West Virginia (Mount Storm job). The Mount Storm job involved installing scrubbers on two of the generating units at the Mount Storm Power Station, and API had contracted to perform the insulation and lagging work. At the time he took the job, Mr. Marple knew that the Mount Storm job was a big project that involved a lot of lagging work.
Petitioner was initially employed by API on the Mount Storm job from June 25, 2001, to October 10, 2001, at which time he was laid off because of a reduction in workforce mandated by API's project schedule. Almost 2 months later, Mr. Marple was referred back to API for the Mount Storm job, and he worked for API on the Mount Storm job from December 3, 2001, until August 22, 2002, at which time he was again laid off by API. Mr. Marple believed this layoff would be the end of his work on the Mount Storm job.
As a result of his layoff from the Mount Storm job, Mr. Marple went to the Local 100 hiring hall in Cumberland and signed the out-of-work list. He was sent by Local 100 to work a job for Eber HVAC, Inc. (Eber), in Johnstown, Pennsylvania (Johnstown). Mr. Marple worked for Eber after his layoff from API on August 22, 2002, until the job ended the week of September 16, 2002. The job at Eber was 118 miles from Mr. Marple's residence in Burlington. Each day that Mr. Marple reported for work at Eber, he drove his personal truck from his residence in Burlington to Eber's office in Johnstown and back to his residence in Burlington after work. Mr. Marple did not spend the night at or near Johnstown at any time during his job with Eber. Mr. Marple did not receive any reimbursement from Eber or Local 100 for his traveling or meal expenses incurred when working for Eber in Johnstown.
After the end of the Eber job, Local 100 referred Mr. Marple back to work for API on the Mount Storm job. Mr. Marple was rehired by API on September 16, 2002, and worked for API on the Mount Storm job until he was again laid off on February 13, 2003. Mr. Marple was not rehired by API for the Mount Storm job after his layoff on February 13, 2003. API's work on the Mount Storm job continued until January 2004.
The Mount Storm job site was located 2 miles west of Bismarck, West Virginia (Bismarck). Each day that Mr. Marple reported for work on the Mount Storm job, he drove his personal truck from his residence in Burlington to the Mount Storm job site and then back to his residence in Burlington after work. Mr. Marple did not spend the night away from his residence at or near the Mount Storm job site when working on the Mount Storm job. The distance from Mr. Marple's residence in Burlington to the Mount Storm job site, via the most direct driving route of Burlington to New Creek, West Virginia, to Bismarck, was 32 miles. Mr. Marple would go to the Mount Storm job site by first driving to Keyser, West Virginia (Keyser), where he would stop at a Sheetz station to buy gas for his truck and breakfast. The Sheetz in Keyser was not the only gas station available to Mr. Marple; however, he preferred this station to those closer to his home or on the more direct route to the Mount Storm job site because of, among other things, the price of the gas and the quality of the food. As a result of first driving to the Sheetz in Keyser and then to the Mount Storm job site, Mr. Marple drove 51 miles from his residence in Burlington to the Mount Storm job site on the mornings he reported to work during the year in issue. Mr. Marple did not receive any reimbursement from API or Local 100 for his travel or meal expenses incurred in working on the Mount Storm job.
For taxable year 2002, Mr. Marple recorded his daily business mileage on a calendar. On each working day, Mr. Marple wrote down on the calendar the number of miles he drove from his residence to a job site and then back. Mr. Marple considered himself "out of town", for the purpose of deducting business mileage, at a distance of 45 to 50 miles from his residence in Burlington.
For taxable year 2002, Mr. Marple received taxable wages of $44,606.03 from API. API paid Mr. Marple weekly and issued him an earnings statement for each weekly pay period. These earnings statements show that Mr. Marple received gross wages of $45,719.28 from API for 2002 and that he made pretax contributions totaling $1,113.25 for the year to a section 401(k) plan. The earnings statements also show a total of $5,714.54 listed under "Fringe Benefits" for "H&W" for 2002, which relates to premiums for health insurance. The $5,714.54 listed for health insurance was not included in the calculation of Mr. Marple's gross wages from API for taxable year 2002, nor did petitioners include this amount in income on their 2002 Form 1040, U.S. Individual Income Tax Return.
For taxable year 2002, Mr. Marple received taxable wages of $2,917.60 from Eber. Eber also paid Mr. Marple weekly and issued an earnings statement to Mr. Marple for each weekly pay period. Mr. Marple's earnings statements from Eber for taxable year 2002 do not indicate that any amount was allocated to health insurance, nor do the earnings statements indicate that any pretax contributions were made from Mr. Marple's wages. Mr. Marple's Eber earnings statements list an after-tax deduction each pay period for "Union/%% Deduct".
In taxable year 2002, Mr. Marple purchased work boots and clothes, including blue jeans, for wear in his job as a sheet metal worker. These items were normal clothes. Petitioners introduced copies of 12 receipts totaling $338.58 as substantiation for purchases of these items. The receipts indicate that the dollar amounts for all of the items purchased are generally small, ranging from a low of 50 cents to a high of $14.99. The receipts do not provide descriptions of the items purchased or identify the stores from which petitioners purchased the items.
On their 2002 Form 1040, petitioners claimed medical and dental expenses of $8,020 on Schedule A, Itemized Deductions, attached to their return, which resulted in a deduction of $4,963 after application of the limitation in section 213(a). Of the $8,020 in claimed medical and dental expenses, petitioners calculated $7,100 as paid for health insurance. Respondent disallowed the entire $8,020 of claimed expenses in the notice of deficiency on the grounds that petitioners had not substantiated payment of the expenses.6
Also on Schedule A, petitioners deducted $11,741 as Mr. Marple's unreimbursed job expenses, made up of the following: Vehicle expenses of $8,879 (24,325 business miles at the standard mileage rate of 36-1/2 cents per mile); business meals and entertainment expenses of $399 (after application of the 50-percent limitation of section 274(n)); union dues and assessments of $2,113; and work boots and clothing of $350. In the notice of deficiency, respondent allowed a deduction of $1,694 for the substantiated amount of Mr. Marple's union dues and disallowed all of the remaining deductions.7
Deductions are a matter of legislative grace, and a taxpayer must establish that he has satisfied the specific statutory requirements for any deduction claimed.8 Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); ...
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