T.C. Summary Opinion 2009-65



                     UNITED STATES TAX COURT



          LAURA L. AND SCOTT M. BURLEY, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 20783-07S.             Filed May 7, 2009.



     Laura L. and Scott M. Burley, pro sese.

     Frederic J. Fernandez and Mark J. Miller, for respondent.



     CARLUZZO, Special Trial Judge:    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



     1
      Unless otherwise indicated, section references are to the
Internal Revenue Code of 1986, as amended, in effect for the
relevant periods. Rule references are to the Tax Court Rules of
Practice and Procedure.
                                - 2 -

other court, and this opinion shall not be treated as precedent

for any other case.

     In a notice of deficiency dated July 18, 2007, respondent

determined a $4,454 deficiency in petitioners’ 2003 Federal

income tax and a $2,771 deficiency in petitioners’ 2004 Federal

income tax.   For both years, the deficiencies stemmed from the

disallowance of--or adjustments made to--petitioners’ claimed

unreimbursed employee business expenses and other itemized

deductions.   For the reasons discussed below, and with a few

exceptions, we find that petitioners are not entitled to

deductions in excess of those respondent already permitted for

either 2003 or 2004.

                             Background

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

the time the petition was filed, petitioners resided in Apple

Valley, Minnesota.

     During the years at issue petitioners were both employed as

airline mechanics for Northwest Airlines, Inc. (Northwest), and

both belonged to the mechanics union.

     When Northwest made workforce reductions in 2003, Mr. Burley

was “bumped” from his job in Minneapolis by a mechanic with more

seniority.    He was forced to take an “off station” position with

Northwest in order to keep his job and his seniority.   The only
                              - 3 -

position Mr. Burley was able to find with Northwest was in

Milwaukee, Wisconsin.

     Mrs. Burley remained in Minnesota (and in her job with

Northwest as a mechanic in Minnesota) while Mr. Burley commuted

between his job in Wisconsin and petitioners’ residence in

Minnesota.

     When Mr. Burley accepted the Milwaukee position, he was

under the impression that it would not last longer than a year.

Further, because his union had filed a grievance against the

airline regarding the layoffs, Mr. Burley anticipated his forced

reassignment would not last more than a few months.    In September

2004 Mr. Burley was able to return to his position in

Minneapolis.

     Petitioners deducted various items on their 2003 and 2004

Federal income tax returns, including charitable contributions

and unreimbursed employee business expenses.    Most of the

unreimbursed employee business expenses were attributable to the

costs Mr. Burley incurred while living in Milwaukee and traveling

between that city and Minneapolis.

     The issues for decision are:    (1) Whether petitioners are

entitled to unreimbursed business travel expense deductions for

2003 and 2004 for the expenses Mr. Burley incurred while working

in Milwaukee; (2) whether petitioners are entitled to other

unreimbursed employee business expense deductions for 2003 and
                               - 4 -

2004 beyond those respondent already permitted; and (3) whether

petitioners are entitled to deduct charitable contributions made

in 2003 and 2004 beyond those respondent already permitted.

                            Discussion

1.   Unreimbursed Business Travel Expenses:    “Away From Home”

      Ordinarily, a taxpayer may not deduct personal expenses,

such as the costs of meals and lodging.     Sec. 262.    However, if

properly substantiated, traveling expenses, including meals and

lodging, incurred by a taxpayer during the taxable year while

traveling away from home in the pursuit of a trade or business

are deductible.   Secs. 162(a)(2), 274(d).    To qualify for

deduction under section 162(a)(2), the traveling expense must be:

(1) Reasonable and necessary; (2) incurred while the taxpayer was

traveling “away from home”; and (3) directly related to the

conduct of the taxpayer’s trade or business.     Commissioner v.

Flowers, 

, 470 (1946).     The reference to “home” in

section 162(a)(2) means the taxpayer’s tax home.        Mitchell v.

Commissioner, 

, 581 (1980); Foote v. Commissioner, 

, 4 (1976); Kroll v. Commissioner, 

, 561-562

(1968).

      For each year in issue a portion of petitioners’ claimed

deductions includes amounts spent for meals, lodging, travel, and

Internet access while Mr. Burley was working in Milwaukee.

According to petitioners, Mr. Burley incurred the expenses while
                               - 5 -

he was away from home for business purposes.    According to

respondent, Mr. Burley was not “away from home” while working in

Milwaukee.

     Generally, a taxpayer’s tax home is determined by the

location of the taxpayer’s regular or principal place of

business, regardless of where the taxpayer’s residence is

located.   Mitchell v. Commissioner, supra at 581; Kroll v.

Commissioner, supra at 561-562; sec. 1.911-2(b), Income Tax Regs.

Usually, if the location of the taxpayer’s regular place of

business changes, so does the taxpayer’s tax home--from the old

location to the new location--unless the period of employment at

the new location is, or is reasonably expected to be, temporary.

Kroll v. Commissioner, supra at 562-563; Mitchell v.

Commissioner, T.C. Memo. 1999-283.     By law, a “taxpayer shall not

be treated as being temporarily away from home during any period

of employment if such period exceeds 1 year.”    Sec. 162(a).

     Petitioners argue that Milwaukee, Wisconsin, should not be

treated as Mr. Burley’s tax home for the years in issue because

his assignment there was temporary.    See Peurifoy v.

Commissioner, 

, 60 (1958); Horton v. Commissioner, 

, 593-595 (1986).   Unfortunately, the fact that it turned

out to be temporary is not as critical to the analysis as is the

assignment’s actual duration–-14 months.    See sec. 162(a).
                               - 6 -

     Further, this Court has previously dealt with the question

of whether bumped Northwest mechanics are entitled to deduct

expenses incurred while working away from their primary

residences.   See, e.g., Alami El Moujahid v. Commissioner, T.C.

Memo. 2009-42; Riley v. Commissioner, T.C. Memo. 2007-153;

Wilbert v. Commissioner, T.C. Memo. 2007-152, affd. 

(7th Cir. 2009); Farran v. Commissioner, T.C. Memo. 2007-151;

Bogue v. Commissioner, T.C. Memo. 2007-150; Stockwell v.

Commissioner, T.C. Memo. 2007-149.     In each case, we disallowed

the deductions upon the ground that the expenses to which the

deductions relate were not incurred away from the taxpayer’s

home.   This case is no different.

     Given the circumstances surrounding his employment during

2003 and 2004, we can understand why petitioners might consider

Mr. Burley’s “off station” assignment to be “temporary”, as that

word is commonly used and understood.    After all, at all times

relevant it was his intention to return to Minneapolis as soon as

possible for business as well as personal reasons.    Nevertheless,

because the assignment lasted for more than 1 year, it cannot be

treated as a temporary assignment for Federal income tax

purposes.   See Wilbert v. Commissioner, 553 F.3d at 550; Alami El

Moujahid v. Commissioner, supra.
                                 - 7 -

      Consequently, because Mr. Burley’s position with Northwest’s

Milwaukee site lasted for more than 1 year, that location is

considered his tax home for the period he worked there.

      Because he was not “away from home” for business reasons,

the expenses Mr. Burley incurred while living in Milwaukee--and

while traveling back and forth between the Minneapolis metro area

and Milwaukee--were incurred for personal purposes, and

petitioners are not entitled to a deduction for those expenses.

See sec. 262(a); Commissioner v. Flowers, supra; Wilbert v.

Commissioner, 553 F.3d at 550.

2.   Other Unreimbursed Employee Business Expenses

      As has often been stated, deductions are a matter of

legislative grace, and the taxpayer bears the burden of proof to

establish entitlement to any claimed deduction.2     Rule 142(a);

INDOPCO, Inc. v. Commissioner, 

, 84 (1992); New

Colonial Ice Co. v. Helvering, 

, 440 (1934).     This

burden requires the taxpayer to substantiate deductions claimed

by keeping and producing adequate records that enable the

Commissioner to determine the taxpayer’s correct tax liability.

Sec. 6001; Hradesky v. Commissioner, 

, 90 (1975), affd.

per curiam 

 (5th Cir. 1976); Meneguzzo v.

Commissioner, 

, 831-832 (1965).


      2
      Petitioners do not claim that the provisions of sec.
7491(a) are applicable, and we proceed as though they are not.
                               - 8 -

     Petitioners claimed deductions for various unreimbursed

employee business expenses for each of the years in issue,

including uniform maintenance, tool expenses, professional

publications, computer equipment, and office supplies.

Petitioners also claimed deductions for the depreciation related

to a computer.

     As noted earlier, taxpayers are permitted deductions for

ordinary and necessary expenses paid or incurred in carrying on a

trade or business during the year; personal, living, or family

expenses are not deductible.   Secs. 162(a), 262.

     If a taxpayer establishes that he or she paid or incurred a

deductible expense but does not establish the amount of the

expense, we may approximate the amount of the allowable

deduction, bearing heavily against the taxpayer whose

inexactitude is of his or her own making.      Cohan v. Commissioner,

, 543-544 (2d Cir. 1930).     However, for the Cohan rule

to apply, there must be sufficient evidence in the record to

provide a basis for the estimate.      Vanicek v. Commissioner, 

, 743 (1985).   Certain expenses may not be estimated

because of the strict substantiation requirements of section

274(d).   See sec. 280F(d)(4)(A); Sanford v. Commissioner, 

, 827 (1968), affd. per curiam 

 (2d Cir. 1969).
                                - 9 -

     Although both parties have made concessions regarding some

of the expense deductions, a few remain in dispute, and we

address those below.3

     a.    Computer Equipment

     A computer is “listed property” and subject to the strict

substantiation requirements of section 274(d).    Sec.

280F(d)(4)(A)(iv).    Petitioners claimed to have used the computer

to check on Mr. Burley’s job status and visit the union Web site;

he used the scanner to assist with his informal teaching of other

mechanics.    However, petitioners did not introduce evidence to

suggest that either of them was required by Northwest to have a

computer, nor did they explain how much of the computer’s overall

use was for business (as distinct from personal) purposes.

Petitioners’ purchase of computer equipment and/or upgrades to

that equipment was not shown to be an ordinary and necessary

business expense.    See Riley v. Commissioner, T.C. Memo. 2007-

153; Wasik v. Commissioner, T.C. Memo. 2007-148.    Accordingly,

any depreciation related to the computer and peripherals would

also not be considered an ordinary and necessary business

expense.    We sustain respondent’s determination on this issue.




     3
      To the extent not specifically mentioned herein, we hold
that petitioners are not entitled to deductions beyond those
respondent already permitted.
                               - 10 -

     b.   Office Supplies

     The strict substantiation requirements of section 274(d) do

not apply to these types of expenses, and the Cohan rule may

apply; however, petitioners must still provide minimum

substantiation of such expenses because petitioners bear the

burden of proof.   See sec. 6001; Rule 142(a).

     Although they may have used binders and other office

supplies in their work, petitioners have not sufficiently

demonstrated that the purchase of these items was necessary for

their employment with Northwest.   We sustain respondent’s

determination on this issue.

     c.   Safety Shoes and Uniform Maintenance

     Like office supplies, items such as safety shoes are not

subject to the strict substantiation requirements of section

274(d).   Because steel-toed safety shoes are both ordinary and

necessary for petitioners’ employment as mechanics, and because

we are sufficiently satisfied that petitioners met their burden

of proof on this issue, petitioners are entitled to deduct the

claimed $385 safety shoe expense for 2004.

     As for the cost of caring for and cleaning petitioners’

uniforms, we remain unconvinced that the amounts already

permitted by respondent are unreasonable or that petitioners are

entitled to further deductions for that expense.
                                - 11 -

     d.   Tools and Books

      Like uniforms, tools and books are not subject to the

heightened substantiation requirements of section 274(d) and may

be estimated under Cohan.

      Petitioners claimed a deduction for tools expenses on their

2003 return.   Petitioners testified that aviation mechanics are

sometimes required to bring their own tools, or that their job is

more easily performed with better tools than those Northwest

provided.   Respondent has already allowed a portion of that

expense, but, given the entire record, we are satisfied that

petitioners are entitled to the claimed $1,984 for tools and

books expenses for that year.

      Similarly, we are satisfied that Mrs. Burley’s 2004 purchase

of a Handbook for Aviation Maintenance Technicians was both an

ordinary and necessary business expense, and petitioners are

entitled to a deduction for its cost.

3.   Charitable Contribution Deductions

      Petitioners claimed a noncash charitable contribution

deduction of $2,355 on their 2003 Federal income tax return for

the donation of their Chevy Blazer.      At trial petitioners

explained that the amount should have been $2,375.      Petitioners

also claimed a $3,847 deduction for cash contributions.

      Petitioners claimed a $5,669 charitable contribution

deduction on their 2004 return, comprising of both cash and

noncash donations.
                              - 12 -

     In general, a taxpayer is allowed to deduct any donations,

contributions, or gifts made to a qualifying organization.    See

sec. 170(a), (c).   Nothing in the record suggests that the donees

to which petitioners made donations were not qualifying

organizations.

     Petitioners regularly made cash donations to their church,

and respondent has already permitted petitioners a deduction for

some of those donations.   Respondent has also already permitted

some of the other charitable deductions petitioners claimed.

     We appreciate petitioners’ charitable spirit, both to their

church and other organizations, but a deduction for a charitable

contribution, whether made in cash or otherwise, must be

substantiated by at least one of the following:   (1) A canceled

check; (2) a receipt from the donee charitable organization

showing the name of the donee, the date of the contribution, and

the amount of the contribution; or (3) in the absence of a

canceled check or receipt from the donee charitable organization,

other reliable written records showing the name of the donee, the

date of the contribution, and the amount of the contribution.

Sec. 170(f)(8); sec. 1.170A-13(a)(1), (b)(1), (3), Income Tax

Regs.   The reliability of the records is determined on the basis

of all of the relevant facts and circumstances.   See sec.

1.170A-13(a)(2), Income Tax Regs.
                              - 13 -

      Petitioners provided a “contemporaneous calendar” to support

many of their claimed deductions, including their cash charitable

contributions, for each of the years in issue.   However, some of

the other expense notations made on the calendar did not actually

belong to either petitioner (such as a mileage notation and

attempted deduction for a friend’s use of petitioners’ truck) and

that calls into question the reliability of the calendar in

satisfaction of the charitable donation substantiation

requirements.

      Further, petitioners provided no documentation whatsoever to

support their claimed deduction for the donation of their Chevy

Blazer in 2003.   Although it does happen that taxpayers lose

their receipts, in this case, without even a letter from the

donee organization describing the donation, we are unable to

permit petitioners a deduction for it.

      In sum, we do not find petitioners’ records sufficiently

persuasive or otherwise to satisfy the provisions of the

regulation cited above.   Petitioners are not entitled to a

charitable contribution deduction for either year in excess of

the amounts already conceded by respondent.

4.   Conclusion

      After taking into account the concessions made by the

parties, as well as the various issues decided today, there may

be further mechanical adjustments to be made to petitioners’ 2003
                              - 14 -

and 2004 returns.   See, e.g., sec. 67(a) (providing a 2-percent

floor on miscellaneous itemized deductions).

     Therefore, to reflect our disposition of the disputed

issues,


                                         Decision will be entered

                                    under Rule 155.