2005 Tax Ct. Summary LEXIS 34">*34 PURSUANT TO INTERNAL REVENUE CODE SECTION 7463(b), THIS OPINION MAY NOT BE TREATED AS PRECEDENT FOR ANY OTHER CASE.
DEAN, Special Trial Judge: This case was heard pursuant to the provisions of
Respondent determined for 2002 a deficiency in petitioner's Federal income tax of $ 3,157.88. After a concession, 1 the issue for decision is whether petitioner's business transportation expenses should be included on Schedule A, Itemized Deductions, or on Schedule C, Profit or Loss from Business. At the time the petition in this case was filed, petitioner resided in Redford, Michigan.
2005 Tax Ct. Summary LEXIS 34">*35 This case was deemed to be submitted fully stipulated under Rule 122, and the facts stipulated are so found. 2
Background
During 2002, petitioner held two jobs, one as a commissioner for the County of Wayne (the county), and the other as a sales representative for West Publishing Corp. (West). During a workday, petitioner would drive to various locations, performing duties for both positions.
Petitioner timely filed with the Internal Revenue Service a Form 1040, U.S. Individual Income Tax Return, for 2002. Attached to the return were various forms including a Schedule A and two Forms 2106, Employee Business Expenses.
On the Form 2106 relating to petitioner's employment with West, petitioner reported the following expenses:
Expense | Amount |
Vehicle expenses | $ 7,323 |
Parking fees, tolls | |
& transportation, etc. | 199 |
Expenses away from home overnight | 1,766 |
Other business expenses | 2,048 |
Total | 11,336 |
2005 Tax Ct. Summary LEXIS 34">*36 On the Form 2106 relating to petitioner's employment with the county, petitioner reported the following expenses:
Expense | Amount |
Vehicle expenses | $ 1,830 |
Expenses away from home overnight | 442 |
Other business expenses | 552 |
Total | 2,824 |
These expenses, totaling $ 14,130, were deducted by petitioner as unreimbursed employee expenses on his Schedule A.
By letter, respondent notified petitioner of a proposed adjustment in petitioner's 2002 Federal income taxes resulting from the application of the alternative minimum tax. Respondent, however, indicated that petitioner had an overpayment of $ 1,197.12 resulting from the payment of excess Social Security taxes of $ 4,355.
Petitioner filed a Form 1040X, Amended U.S. Individual Income Tax Return, for 2002. Attached to the Form 1040X were various forms including two Schedules C and two Forms 2106.
Petitioner moved from Schedule A to Schedule C the following expenses relating to his employment with West:
Expense | Amount |
Vehicle expenses | $ 7,323 |
Parking fees, tolls | |
& transportation, etc. | 199 |
Total | 7,522 |
Petitioner did not move his earnings from his employment with West to the new Schedule C.
2005 Tax Ct. Summary LEXIS 34">*37 Petitioner also moved from Schedule A to the second Schedule C vehicle expenses of $ 1,830 relating to his employment with the county. Petitioner did not move his earnings from his employment with the county to the new Schedule C. Petitioner also reported an additional Schedule A deduction of $ 3,889 for additional State and local taxes and real estate taxes.
Subsequently, respondent sent petitioner a notice of deficiency for 2002 determining a deficiency of $ 3,157.88 resulting from the application of the alternative minimum tax. Respondent also determined that petitioner had an overall overpayment of $ 1,197.12 resulting from the payment of excess Social Security taxes of $ 4,355.
Additionally, respondent determined that petitioner's transportation expenses of $ 7,522 and $ 1,830 should be included on Schedule A, not Schedule C.
Discussion
The parties disagree as to whether petitioner's transportation expenses should be reported on Schedule A or Schedule C. Respondent contends that petitioner, as an employee, must claim the expenses at issue on his Schedule A as miscellaneous itemized deductions and that they are limited to the amount that exceeds the 2-percent floor imposed by
Further,
2005 Tax Ct. Summary LEXIS 34">*40 On the basis of the foregoing, the Court concludes that petitioner must report his transportation expenses as miscellaneous itemized deductions on Schedule A.
Reviewed and adopted as the report of the Small Tax Case Division.
Decision will be entered under Rule 155.
1. Respondent concedes that petitioner is entitled to a deduction of $ 3,889 for additional State and local income taxes and real estate taxes.↩
2. The facts are not in dispute, and the issue is primarily one of law. Sec. 7491, concerning burden of proof, has no bearing on this case.↩
3. Although revenue rulings are not binding on the courts, see e.g.,