Commuting Expenses From Home To Job Site Not Deductible, Argues IRS.

DAVID W. BURLESON AND PATRICIA S. BURLESON,

====== SUMMARY ======

The main issue is whether a logger is entitled to deduct costs incurred in driving from his residence to his first work site, and from his last work site back home in the evening. David Burleson's work as a logger required that he drive to a series of cutting sites in the course of a day, but did not involve overnight traveling. The IRS argues that those costs are nondeductible personal expenses under section 262.

The Service analogizes Burleson's daily work area to a city slightly smaller than Washington, D.C., arguing that he is not traveling on business, but simply commuting. The IRS also likens his job to that of a construction worker, who works at a variety of sites but is not considered to be a temporary employee. The IRS argues that unless Burleson's home qualifies as a principal place of business under section 280A(c)(1)(A), his transportation to and from the first and last site each day is nondeductible commuting.

Further, the Service asserts that Walker v. Commissioner, T.C. Memo. 1993-311 (subsequently withdrawn and replaced by 101 T.C. No. 36 (Dec. 13, 1993)), was wrongly decided and should not apply to this case. (Walker held that a logger's commuting costs from home and back again were deductible transportation expenses.) The IRS argues that the court wrongly determined that section 280A did not apply. "The opinion concluded that Walker's work shop was his principal place of business on grounds that work done [there] was essential to the cutting business and that the cutter spent more time at the work shop than any other cutting site."

The IRS stresses that section 280A controls deductibility for both Walker and Burleson, citing Hamacher v. Commissioner, 94 T.C. 348 (1990), where the court found transportation expenses incurred traveling to and from a home office to be nondeductible. The IRS points out that the Walker opinion did not apply Soliman v. Commissioner, 113 S. Ct. 701 (1993), which held that while an anesthesiologist performed essential services at home, including billing and telephone calls, his "important income producing work" occurred in hospitals. The Service urges the court to apply Soliman, but not Walker, which remains appealable.

The IRS further contends that the professional fees paid to Burleson's tax preparer are nondeductible, because "only expenses incurred in preparing that portion of the taxpayer's income tax return that relates to the taxpayer's business as a sole proprietor may be claimed as a Schedule C expense." The Service adds that the professional fees would be reportable on Schedule A, but that they fall below the 2-percent floor of section 67(a).

====== FULL TEXT ======

BRIEF FOR RESPONDENT

DAVID L. JORDAN

OF COUNSEL

ROGER A. RHODES

CONTENTS

PRELIMINARY STATEMENT

I. WHETHER PETITIONERS ARE ENTITLED TO DEDUCT THE COSTS INCURRED

1. THE APPLICATION OF I.R.C. SECTION 162(a)(2) BY ANALOGY

2. THE FOREST IS AKIN TO A METROPOLITAN AREA FOR COMMUTING

3. PETITIONERS' PERMANENT CUTTING WORK IN THE FOREST UNDER

4. THE DEDUCTIBILITY OF EXPENSES WHICH EXCEED COMMUTING

5. HOW I.R.C. SECTION 280A APPLIES AND BARS THE DEDUCTION

6. THE DEDUCTIBILITY OF DRIVING BETWEEN CUTTING SITES AND

7. WHY THE OPINION OF WALKER V. COMMISSIONER, T.C. MEMO

II. WHETHER PETITIONERS ARE ENTITLED TO DEDUCT SCHEDULE C

III. WHETHER PETITIONERS ARE LIABLE FOR INCREASED SELF-

IV. WHETHER PETITIONERS CHILD AND DEPENDENT CARE CREDIT SHOULD

CONCLUSION

CITATIONS

CASES

Albert v. Commissioner, 13 T.C. 129 (1949)

Andrews v. Commissioner, 931 F.2d 132 (1st Cir. 1991)

Anson v. Commissioner, 328 F.2d 703 (10th Cir. 1964)

Balis v. Commissioner, T.C. Memo. 1992-34

Barnes v. Commissioner, T.C. Memo. 1986-585

Bixby v. Commissioner, 58 T.C. 757 (1972), acq., 1975-1 C.B. 1,

Bodzin v. Commissioner, 60 T.C. 820 (1973), rev'd, 509 F.2d 679

Christey v. United States, 841 F.2d 809 (8th Cir. 1988), cert

Conti v. Commissioner, T.C. Memo. 1992-616

Continental Ill. Corp. v. Commissioner, T.C. Memo. 1989-636

Coombs v. Commissioner, 608 F.2d 1269 (9th Cir. 1979)

Correll, United States v., 389 U.S. 299, 88 S. Ct. 445 (1967)

Coutsoubelis v. Commissioner, T.C. Memo. 1993-457

Crist v. Commissioner, T.C. Memo. 1974-67

Crowther v. Commissioner, 269 F.2d 292 (9th Cir. 1959), acq.

Curphey v. Commissioner, 73 T.C. 766 (1980)

Dahood v. United States, 747 F.2d 46 (1st Cir. 1984)

Dudley v. Commissioner, T.C. Memo. 1987-607, aff'd without

Ellwein v. U.S., 778 F.2d 506 (8th Cir. 1985)

Fausner v. Commissioner, 413 U.S. 838, reh'g denied, 414 U.S.

Feistman v. Commissioner, 63 T.C. 129 (1974), dismissed on other

Feldman v. Commissioner, 791 F.2d 781 (9th Cir. 1986)

Flowers, Commissioner v., 326 U.S. 465, 66 S. Ct. 250, reh'g

Fryer v. Commissioner, T.C. Memo. 1974-77

Gordon v. Commissioner, T.C. Memo. 1990-182

Green v. Commissioner, 59 T.C. 456 (1972)

Hamacher v. Commissioner, 94 T.C. 348 (1990)

Hamblen v. Commissioner, 78 T.C. 53 (1982)

Hamdi v. Commissioner, T.C. Memo. 1993-38

Heuer v. Commissioner, 32 T.C. 947 (1959), aff'd 283 F.2d 865

Hixson v. Commissioner, T.C. Memo. 1979-296

Mathews v. Commissioner, 36 T.C. 483 (1961)

Mathews v. Commissioner, 310 F.2d 98 (9th Cir. 1962)

Mazzotta v. Commissioner, 57 T.C. 427 (1971), aff'd, 465 F.2d

McCabe v. Commissioner, 688 F.2d 102 (2d Cir.), cert. denied,

Neff v. Commissioner, T.C. Memo. 1974-297

New Colonial Ice Co. v. Helvering, 292 U.S. 435, 54 S. Ct. 788

O'Connor v. Commissioner, T.C. Memo. 1986-444

Pemberton v. Commissioner, T.C. Memo 1970-194

Pollei v. Commissioner, 877 F.2d 838 (10th Cir 1989)

Sanders v. Commissioner, 439 F.2d 296 (9th Cir.), cert, denied,

Scott v. Commissioner, 84 T.C. 683 (1985), acq. 1987-2 C.B. 1

Sibla v. Commissioner, 611 F.2d 1260 (9th Cir. 1980)

Soliman. Commissioner v., ___ U.S. ___, 113 S. Ct. 701 (1993)

Stanclift v. Commissioner, T.C. Memo. 1978-406

Steinhort v. Commissioner, 335 F.2d 496 (5th Cir. 1964)

Stricker v. Commissioner, 54 T.C. 355 (1970), aff'd, 438 F.2d

Tauferner, United States v., 407 F.2d 243 (10th Cir.), cert.

Tietjen v. Commissioner, T.C. Memo 1970-65

Tirheimer v. Commissioner, T.C. Memo. 1992-137

Ventling v. Berg1and, 479 F. Supp. 174 (D. S.D 1979)

Walker v. Commissioner, T.C. Memo. 1993-311

Wedemeyer v. Commissioner, T.C. Memo. 1990-324

Weiberg v. Commissioner, 639 F.2d 434 (8th Cir 1981)

Weiss v. Commissioner, T.C. Memo. 1990-492

Welch v. Helvering, 290 U.S. 111 (1933)

Wisconsin Psychiatric Services Ltd. v. Commissioner, 76 T.C. 839

Yeates v. Commissioner, 873 F.2d 1159 (8th Cir. 1989)

INTERNAL REVENUE CODE

Section 21

TREASURY REGULATIONS

Prop. Treas. Reg. section 1.280A-2(d)

MISCELLANEOUS

Advance Notice 93-12, 1993-8 I.R.B. 46

PRELIMINARY STATEMENT

This case was submitted fully stipulated before the Honorable Joel Gerber on September 23, 1993, at a session of the Tax Court at Denver, Colorado.

At issue in this case is a $2,013.00 deficiency in petitioners' income tax for 1988. The unconceded issues focus on petitioners' logging activities and Schedule C reported expenses for laundry and cleaning and professional expenses.

The record consists of the pleadings, a Stipulation of Facts with Joint Exhibits 1-A through 9-I, and a First Supplemental Stipulation of Facts with Joint Exhibits 10-J through 12-L. In this brief, respondent uses the abbreviation "Stip. paragraph __" to refer to portions of the Stipulation of Facts and "Supp. Stip. paragraph __" to refer to portions of the First Supplemental Stipulation of Facts. The Court denied petitioners' repeated motions to continue the case. The Court directed: respondent to file a trial brief by October 25, 1993; petitioners to file a response brief by November 24, 1993; and, respondent to file a responsive brief by December 27, 1993, if respondent so desires.

QUESTIONS PRESENTED

1. Whether petitioners are entitled to deduct the costs incurred in driving from the personal residence to the first work site of the day and from driving from the last work site of the day back to his residence, where all work sites were within the Black Hills National Forest area ("Forest").

2. Whether petitioners are entitled to deduct Schedule C claimed expenses for laundry and cleaning and professional fees.

3. Whether petitioners received additional net self-employment income which is subject to self-employment tax.

4. Whether petitioners child and dependent care credit should be reduced.

5. Whether petitioners Schedule E net income should be recharacterized to Schedule C.

The Court need not decide issues three and four because the issues are computational and the parties have so stipulated. Stip. paragraph 11, 13. The Court need not decide issue five because the petitioners conceded it. Stip. paragraph 4. Respondent herein concedes $504.00 of vehicle expense on grounds that this amount represents the additional cost of hauling supplies and equipment while David Burleson was driving from his residence and area appurtenant thereto to the first cutting site of the day and driving from the last cutting site of the day back to his residence. Specifically, the weight of the cutting equipment and supplies reduced truck mileage: 1/13 or one mile per gallon over a normal rate of 13 miles per gallon while the truck was in its two wheel drive mode which was 50% of the time; and, 1/8 or one mile per gal1on over a normal rate of 8 miles per gallon while the truck was in its four wheel drive mode which was 50% of the time. /1/ The effect of hauling logging equipment while driving exists in paragraphs 1, 2, 4, 5 and 6 of the First Supplemental Stipulation of Facts and the sole authority to which Respondent justifies conceding this amount is because the amount falls within the guidelines set forth in Fausner v. Commissioner, 413 U.S. 838, reh'g denied, 414 U.S. 882, 94 S. Ct. 43 (1973) and Rev. Rul. 75-380, 1975-2 C.B. 59. A computation under Tax Court Rule 155 will be necessary because of concessions made by the parties.

RESPONDENT'S REQUEST FOR FINDINGS OF FACT

Respondent requests the Court to find the following facts:

1. All facts relate to 1988 unless otherwise stated.

2. At the time the petition in this case was filed, the petitioners David Burleson and Patricia Burleson resided at HCR 87 Box 36A, Hill City, South Dakota 57745. Stip. paragraph 1.

3. Hill City South Dakota borders the Black Hills National Forest (Forest). Stip. paragraph 28; Jt. Ex. 6-F.

4. The disallowed $4,993.00 Schedule C deduction for car and truck expenses represents expenses associated with driving from David Burleson's personal residence to the initial cutting site of the work day, and expenses associated with driving from the last cutting site of the work day back to David Burleson's personal residence. At David Burleson's residence sits his mobile home and his work shop appurtenant thereto. Stip. paragraph 6.

5. Petitioners offered no evidence other than a statement that they maintain that the disallowed $242.00 of claimed 1988 Schedule C deduction for laundry and cleaning expense represents: the cost of cleaning heavily soiled logging clothing of David Burleson and washing David Burleson's truck; the cleaning occurred at a coin operated laundry service and coin operated car wash located in Hill City, South Dakota; and, petitioners have no records nor receipts for this claimed expense. Stip. paragraph 8.

6. The $55.00 claimed Schedule C deduction for legal and professional expenses on their 1988 income tax return represents the cost of preparing petitioners' 1988 income tax return. Stip. paragraph 10.

7. David Burleson worked with two timber contractors, Douglas Burleson who is David Burleson's brother, and Rush Elliot. Stip. paragraph 13.

8. David Burleson's actual cutting was done at the cutting sites. David Burleson's oral acceptance or nonacceptance of proposed wood cutting contracts involved telephonic negotiation and visits to the proposed cutting sites. Stip. paragraph 14.

9. David Burleson worked as a wood cutter at various job sites in the Forest from at least 1981 through 1988. Stip. paragraph 15.

10. David Burleson worked as a wood cutter exclusively at various job sites in the Forest. Stip. paragraph 16.

11. David Burleson owned the wood cutting equipment he used which included, but was not limited to, chain saws and cutting equipment. Stip. paragraph 17.

12. During 1988, David Burleson used a stock four-wheel drive 1986 Chevrolet pick-up truck to drive himself and his equipment between his residence and cutting sites. The truck was equipped with a four speed manual transmission, a V-6 4.3 liter engine, a Rochester quadra-jet four barrel carburetor, and a .373 gear ratio rear end differential. Stip. paragraph 18.

13. Petitioners resided in a mobile home on a lot located ten and one half miles west of Hill City, South Dakota. The lot on which petitioners' residence sits, had no garage and had a work shop appurtenant to the residence. Stip. paragraph 20.

14. Regular maintenance for wood cutting equipment was done by David Burleson, either at his work shop or at the cutting sites. Stip. paragraph 21.

15. Petitioners spent, on the average, seven hours a week in the work shop working on the maintenance and repair of equipment. The work shop was also used to hold his cutting supplies and vehicle supplies. Stip. paragraph 22.

16. Petitioners spent, on the average, one hour per week doing administrative tasks which were accomplished in petitioners' residence. Stip paragraph 23.

17. Petitioners record keeping consisted of maintaining files of third party receipts. Stip. paragraph 24.

18. David Burleson spent between 40 to 60 hours per week performing cutting services at cutting sites in the Forest. Stip. paragraph 25.

19. The entire Forest area occupies 1,529,162 acres (2,389 square miles). /2/ Stip. paragraph 27, 28; Jt. Ex. 6-F at page 3, 7- G.

20. The metropolitan area of Chicago, Illinois occupies approximately 3,126 square miles. /3/ Stip. paragraph 28; Jt. Ex. 8- H.

21. The metropolitan area of Washington D.C. occupies approximately 2,398 square miles. /4/ Stip. paragraph 30; Jt Ex. 9-I.

22. The additional weight of logger work related items in petitioners' truck, which did not exceed 645 pounds, alone resulted in a decrease in fuel mileage of 1/13 (.076), a loss of 1 mile per gallon with a normal mileage rate of 13 miles per gallon. Supp. Stip. paragraph 1.

23. The additional weight of the logger work related items in petitioners' truck, which did not exceed 645 pounds, did not result in the need to engage the four wheel drive mode of petitioner's truck. Supp. Stip. paragraph 2.

24. Some drivers in the Forest, other than those involved in the timber industry, utilize four wheel drive or front wheel drive vehicles due to seasonal adverse weather or rural road conditions. Supp. Stip. paragraph 3.

25. Conditions encountered by David Burleson in driving from his residence to the first cutting site in the Forest and from the last cutting site of the day back to his residence required that the truck driven by David Burleson to be operated in its four wheel drive mode 50% of the time, of which half was due to adverse weather and half was due to rural roads. Supp. Stip. paragraph 4.

26. The four wheel drive mode usage on petitioners' truck alone resulted in a decrease in fuel mileage of 5/13 (.384), a loss of 5 miles per gallon with a normal mileage rate of 13 miles per gallon. Supp. Stip. paragraph 5.

27. Petitioner's truck normally got 13 miles per gallon in its two wheel drive mode, without logging equipment in it. Petitioner's truck got 12 miles per gallon in its two wheel drive mode, with logging equipment in it. Petitioner's truck got 8 miles per gallon in its four wheel drive mode, without logging equipment in it. Petitioner's truck got 7 miles per gallon in its four wheel drive mode, with logging equipment in it. Supp. Stip. paragraph 6.

28. Petitioners' work shop is an old, dilapidated wooden building. Supp. Stip. paragraph 8; Jt. Ex. 11-K.

ULTIMATE FINDINGS OF FACT

29. Except for the additional cost of hauling supplies and equipment (which is one mile per gallon on a normal mileage rate of 13 miles per gallon for driving that occurs in the two wheel drive mode of petitioners' truck and one mile per gallon on a normal mileage rate of 8 miles per gallon for the driving that occurs in the four wheel drive mode of petitioners' truck), petitioners are not entitled to deduct the costs incurred in driving from the personal residence to the first work site of the day and from driving from the last work site of the day back to his residence, where all work sites were within the Forest. (Entire record).

30. Petitioners are not entitled to deduct Schedule C claimed expenses for laundry and cleaning and professional fees. (Entire record).

31. Petitioners received additional net self-employment income which is subject to self-employment tax. (Entire record).

32. Petitioners child and dependent care credit should be reduced. (Entire record).

POINTS RELIED UPON

Respondent determined that petitioner David W. Burleson is not entitled to deduct: the costs incurred in driving from his personal residence to the first work site of the day and from driving from the last work site of the day back to his residence, where all work sites were within the Forest, because such driving was commuting; Schedule C claimed expenses for laundry and cleaning as such expenses were personal and not substantiated as to amount; and Schedule C reported professional fees because they were personal and failed to meet Schedule A requirements as to deductibility. Respondent also determined that petitioner had additional net self-employment income which was subject to self-employment tax existed; child and dependent care credit should be reduced; and that Schedule E net income should be recharacterized to Schedule C. A detailed explanation of the respondent's determinations in the notice of deficiency may be found in the Trial Memorandum For Respondent at pages three and four.

Respondent's determinations in the notice of deficiency are presumed correct, and petitioners bear the burden of proving such determinations to be in error. Welch v. Helvering, 290 U.S. 111, 115, 54 S. Ct. 8, 9 (1933); Weiberg v. Commissioner, 639 F.2d 434, 437 (8th Cir. 1981); Anson v. Commissioner, 328 F.2d 703, 706 (10th Cir. 1964); Bixby v. Commissioner, 58 T.C. 757, 791 (1972), acq., 1975-1 C.B. 1, and acq., 1975-2 C.B. 1; T.C. Rule 142(a). Petitioners bears the burden of proof as to all issues raised.

Petitioners dispute that they are not entitled to deduct: the costs incurred in driving from the personal residence to the first work site of the day and from driving from the last work site of the day back to his residence, where all work sites were within the Forest area, because such driving was commuting; Schedule C claimed expenses for laundry and cleaning as such expenses were personal and not substantiated as to amount; and, Schedule C claimed professional fees that were personal and failed to meet Schedule A requirements as to deductibility. Petitioners failed to establish that: the disallowed driving was anything other than commuting, except for the amount conceded above by respondent; the Schedule C claimed expenses for laundry and cleaning expenses were not personal and were substantiated as to amount; and, Schedule C claimed professional fees were not personal and met Schedule A requirements as to deductibility.

As to commuting, the Forest area is smaller than metropolitan areas such as Chicago, Illinois, and Washington D.C., and the Forest area should be considered akin to a metropolitan area for purposes of determining petitioners' tax home. The Forest is a relatively homogeneous geographical area predominated with pine trees. Ventling v. Bergland, 479 F. Supp. 174, 176 (S.D. 1979), aff'd without opinion, 615 F.2d 1365 (8th Cir. 1979). David Burleson, who worked in the logging industry from at least 1981 through 1988, merely commuted to and from his residence to cutting sites within the Forest.

ARGUMENT

I

WHETHER PETITIONERS ARE ENTITLED TO DEDUCT THE COSTS INCURRED IN

1. THE APPLICATION OF I.R.C. section 162(a)(2) BY ANALOGY.

This case involves transportation expenses and not travel under I.R.C. section 162(a)(2). Respondent determined that petitioners are not entitled to deduct the costs incurred in driving from the personal residence to the first work site of the day and from driving from the last work site of the day back to the residence, where all work sites were within the Forest area. Although I.R.C. section 162(a)(2)'s travel is not involved because the petitioners were not away from home overnight, many I.R.C. section 162(a)(2) /5/ principles (ie: tax home and principal place of business) are applicable by analogy and discussed herein.

It is axiomatic that a taxpayer's commuting to and from work is a nondeductible personal expense. I.R.C. section 262; Treas. Reg. sections 1.162-2(e), 1.262-1(b)(5); Commissioner v. Flowers, 326 U.S. 465, 470, 66 S. Ct. 250, 252, reh'g denied, 326 U.S. 812, 66 S. Ct. 482 (1946); Ellwein v. U.S., 778 F.2d 506, 509 (8th Cir. 1985); Steinhort v. Commissioner, 335 F.2d 496, 503 (5th Cir. 1964). As to travel within the Forest, petitioner must meet I.R.C. section 162(a)(2)'s deduction prerequisite of staying overnight for travel expenses while away from home in pursuit of a trade or business. Rev. Rul. 75-168, 1975-1 C.B. 58; Rev. Rul. 54-497, 1954-2 C.B. 75; United States v. Correll, 389 U.S. 299, 302, 88 S. Ct. 445, 447 (1967).

2. THE FOREST IS AKIN TO A METROPOLITAN AREA FOR COMMUTING PURPOSES UNDER REV. RUL. 190, 1953-2 C.B. 303.

Rev. Rul. 190, 1953-2 C.B. 303, allows an I.R.C. section 162(a) deduction, for a taxpayer who ordinarily works in a particular metropolitan area but is not regularly employed at any specific location, for travel to a temporary site located outside the metropolitan area. A person's 'home' for tax purposes is generally considered to be the taxpayer's principal place of business. Weiberg, 639 F.2d at 437. I.R.C. section 162(a)(2)'s principal place of business provides guidance, by analogy, on 'temporary' and 'metropolitan' areas.

A taxpayer's 'home' for I.R.C. section l62(a)(2)'s purposes is the area or vicinity of the taxpayer's principal place of business. Flowers, 326 U.S. at 471-474, 66 S. Ct. at 252-254; Andrews v. Commissioner, 931 F.2d 132, 135-136 (1st Cir. 1991). A principal place of business does not require a specific single location, nor are boundaries such as a county line or mileage determinative. Coombs v. Commissioner, 608 F.2d 1269, 1271 (9th Cir. 1979); Sanders v. Commissioner, 439 F.2d 296, 298-299 (9th Cir. 1971), cert. denied, 404 U.S. 864, 92 S. Ct. 55 (1971); Steinhort, 335 F.2d at 503-504; Pemberton v. Commissioner, T.C. Memo 1970-194; Tietjen v. Commissioner, T.C. Memo 1970-65.

The 10th Circuit has held that 'arbitrary distinctions' are necessary in distinguishing legitimate transportation expense from commuting expenses because the "nature of the work engaged in, the distance traveled, the mode of transportation, [and] the degree of "necessity" appear to be unsatisfactory guides." United States v. Tauferner, 407 F.2d 243, 246 (10th Cir. 1969), cert. denied 396 U.S. 824, 90 S. Ct. 66 (1969). The court in Tauferner went on to say, "The basic and unmodified fact of whether the taxpayer is going to the place where he begins work or is returning from the place where he ceases work should be determinative. Such travels are expenses within section 262 as personal, living or family expenses" whether in an urban, suburban, or rural setting. They are not ordinary business expenses under section 162(a)." Id. Here, petitioners claim a deduction for going to the place where David Burleson begins actual cutting work and returning from the place where he actual ceases cutting work. Petitioners cite the nature of David Burleson's work, the distance traveled, the mode of transportation, and the degree of necessity to justify the deduction. Tauferner clearly states that despite petitioners' arguments, the expense is a nondeductible personal expense. Rev. Rul. 190's metropolitan area is not restricted to the confines of an urban area, but refers to a geographical area within which the taxpayer normally travels to temporary work sites. The Forest is the geographical area where petitioner's claimed expenses have been disallowed, with the work sites at issue being within the Forest.

Chicago's metropolitan area is about 25% larger than the entire Forest area. Ventling, 479 F. Supp. at 176; Jt. Ex. 6-F at page 3, 7- G, 8-H, 9-I. Washington D.C.'s metropolitan area is slightly larger than the Forest area. Just as a Chicago or Washington D.C. taxpayer cannot claim a deduction for commuting travel, neither should David Burleson who worked in a recognized geographic area similar to a metropolitan area. Because disallowed deductions for driving was related to work sites within the vicinity of the Forest, petitioner fails to qualify for Rev. Rul. 190. The Forest is akin to a metropolitan area, like Chicago or Washington D.C., for tax home purposes because: the Forest has well defined boundaries; the Forest's mass is smaller than both Chicago and Washington D.C.; and, just as some taxpayers who cannot live next to their 'office' cannot deduct the cost of commuting, neither should a cutter. Sanders v. Commissioner, 439 F.2d 296 (9th Cir. 1971), cert. denied, 404 U.S. 864, 92 S. Ct. 55 (1971) (inability for civilian contractor to live at military base where work occurred did not change character of commuting). Chicago and Washington D.C. are metropolitan areas which apply to the case at bar by reasonable analogy for commuting purposes.

3. PETITIONERS' PERMANENT CUTTING WORK IN THE FOREST UNDER REV. RUL. 90-23, 1990-1 C.B. 28.

Rev. Rul. 90-23, 1990-1 C.B. 28, allows an I.R.C. section 162(a) deduction for daily transportation expenses incurred in going between the taxpayer's residence and temporary work locations if the taxpayer has at least one regular place of business. For purposes of Rev. Rul. 90-23, Respondent considers a "regular place of business", to be a specific location. Petitioners' regular place of business, where cutting services are performed and new work is secured, is the Forest wherein lie the work sites which traveling expenses to and from the residence to the cutting site were disallowed. Because David Burleson commutes to different localities within the Forest, he fails to come within the ambit of Rev. Rul. 90-23. His logging work from at least 1981 through 1988 is not temporary because it is likely to last a substantial or indefinite period of time. Dahood v. United States, 747 F.2d 46, 48-50 (1st Cir. 1984); Stricker v. Commissioner, 54 T.C. 355, 361 (1970), aff'd, 438 F.2d 1216 (6th Cir. 1971); Albert v. Commissioner, 13 T.C. 129, 131 (1949); Tirheimer v. Commissioner, T.C. Memo. 1992-137. Rev Rul. 90-23 in pertinent part provides that:

A taxpayer who pays or incurs daily transportation expenses on

Rev. Rul. 90-23, 1990-1 C.B. at 29. Thus, even if the Court finds

Courts uniformly reject, in the construction industry, the contention that work is temporary if it involves traveling to various work sites. Yeates v. Commissioner, 873 F.2d 1159, 1161 (8th Cir. 1989). Commuting to logging sites from a residence should be disallowed, as it is for construction workers, because both industries contribute to a project by providing skilled services, both might be employees or independent contractors, and both move on to new projects as old ones are completed. Petitioners fail to meet Rev. Rul. 90-23.

4. THE DEDUCTIBILITY OF EXPENSES WHICH EXCEED COMMUTING COSTS UNDER FAUSNER v. COMMISSIONER, 413 U.S 838 (1973) AND REV. RUL. 75- 380, 1975-2 C.B. 59.

An exception to the prohibition of deducting commuting expenses appears in the case of Fausner v. Commissioner, 413 U.S. 838, 93 S. Ct. 2820 (1973), reh'g denied, 414 U.S. 882, 94 S. Ct. 43 (1973). Fausner acknowledged that commuting expenses are not deductible and that travel does not become deductible because by happenstance the taxpayer must carry incidentals of his occupation with him. Id 413 U.S. at 839, 93 S. Ct. at 2821. Fausner left open an exception though that "[a]dditional expenses may at times be incurred for transporting job-required tools and material to and from work. Then an allocation of costs between 'personal' and 'business' expenses may be feasible." Id.

Rev. Rul. 75-380, 1975-2 C.B. 59 expressly applies the Fausner doctrine to transportation from a residence to work and back. Absent a showing of additional expenses incurred for transporting work implements to and from work, a taxpayer's carrying of such items will not alter the nondeductibility of transportation costs to and from work. 1975-2 C.B. at 60. The taxpayer shoulders the burden of proving the additional costs. Id. Petitioners must prove that an amount exceeding the amount already found to be deductible, should be allowed. Moreover, Rev. Rul. 75-380 provides that, "[t]he fact that a taxpayer might have or would have used a less expensive mode of transportation if it had not been necessary to carrying [sic] the work implements is immaterial". Id. Thus, even if petitioners could have commuted by a more economical vehicle, but for the need to haul tools and equipment, this fact does not create a deduction for the difference between the cost of commuting by a conventional vehicle and the cost of using a bigger vehicle.

The few reported cases dealing with Rev. Rul. 75-380, or a deduction of an otherwise personal expense relevant to Rev. Rul. 75- 380, are distinguishable because they all involve law enforcement officers, or fire fighters, and some involved meals. Pollei v. Commissioner, 877 F.2d 838, 839 (10th Cir. 1989) Christey v. United States, 841 F.2d 809, 810 (8th Cir. 1988), cert. denied, 489 U.S. 1016, 109 S. Ct. 1131 (1989); McCabe v. Commissioner, 688 F.2d 102, 106 (2d Cir. 1982), cert. denied, 459 U.S. 906, 103 S. Ct. 208 (1982); Sibla v. Commissioner, 611 F.2d 1260, 1261 (9th Cir. 1980).

Rev. Rul. 75-380 applies the Fausner doctrine to tax years beginning after December 31, 1975. 1975-2 C.B at 60. While there exist few post-Fausner cases decided since Rev. Rul. 75-380 was made applicable, there are many early to mid-1970s cases dealing with commuting and the transportation of tools and equipment. Nearly all of these early to mid-1970s cases use the 'but for' the necessity of taking tools test under Rev. Rul. 63-100, 1963-1 C.B. 34, which was superseded by Rev. Rul. 75-380. These cases provide insight though as they focus on the increased cost associated with the need to haul materials or equipment while commuting. Feistman v. Commissioner, 63 T.C. 129, 135 (1974), dismissed on other grounds, 587 F.2d 941, 943 (9th Cir. 1978) (absent proof of additional cost, no deduction is allowed); Hixson v. Commissioner, T.C. Memo. 1979-296 (timber cutter disallowed deduction); Stanclift v. Commissioner, T.C. Memo. 1978-406 (carpenter with 200 pounds of tools not allowed deduction); Crist v. Commissioner, T.C. Memo. 1974-67 (boilermaker not allowed deduction to transport tools); Neff v. Commissioner, T.C. Memo. 1974-297 (crane operator on indefinite work status traveling 127 miles one way for work not allowed deduction). Furthermore, the absence of case law after Rev. Rul. 75-380 was made applicable indicates that the law is clear and that few taxpayers meet the requirements to take the deduction.

David Burleson transports some equipment and materials to the cutting site. David Burleson drove a four wheel drive truck but Forest conditions warrant driving either a four wheel drive or front wheel drive vehicle whether or not one is engaged in the logging business. Thus, the cost of using four wheel drive is not deductible. The weight of the cutting equipment and supplies reduced truck mileage: 1/13 or one mile per gallon over a normal rate of 13 miles per gallon while the truck was in its two wheel drive mode which was 50% of the time; and, 1/8 or one mile per gallon over a normal rate of 8 miles per gallon while the truck was in its four wheel drive mode which was 50% of the time. Respondent maintains the one mile per gallon is the only aspect of David Burleson's commute which qualifies under Fausner and Rev. Rul. 75-380 as a deduction and this amount has been conceded above. Petitioners receive no deduction for going into town to fuel the truck because the truck required fuel to drive to and from work regardless of whether David Burleson was hauling supplies and equipment. Petitioners failed to prove that they would not have incurred any other additional vehicle expense, above normal commuting.

5. HOW I.R.C. SECTION 280A APPLIES AND BARS THE DEDUCTION OF VEHICLE EXPENSES OTHER THAN THOSE WHICH HAVE BEEN CONCEDED.

Petitioners may argue that the work shop building appurtenant to their residence qualifies as a separate structure under I.R.C. section 280A(c)(1)(C). /6/ Petitioners' did not claim that they were deducting expenses for business use of their home. Jt. Ex. 2-B at Schedule C. Petitioners' motions have argued that their home qualified as their principal place of business under the opinion of Walker v. Commissioner, T.C. Memo 1993-311. Home office requirements for a principal place of business exist under I.R.C. section 280A(c)(1)(A). Petitioners have not alleged that they meet any other exception to I.R.C. section 280A(a)'s general rule which denies an individual taxpayer a deduction for business use of his residence.

The Tax Reform Act of 1976 added I.R.C. section 280A to provide "definitive rules relating to the deductions for expenses attributable to the business use of homes." S. Rep. 94-1236 (1976), 1976-3 C.B. 807, 839. I.R.C. section 280A was enacted in the wake of Bodzin v. Commissioner, 60 T.C. 820, 826 (1973), rev'd, 509 F.2d 679, 681 (4th Cir. 1975), cert. denied, 423 U.S. 825, 96 S. Ct. 40 (1975), in which the Tax Court allowed a deduction for an "appropriate and helpful" home office. Congress enacted I.R.C. section 280A over a concern that, without definitive rules "expenses otherwise considered nondeductible personal, living, and family expenses might be converted into deductible business expenses simply because, under the facts of the particular case, it was appropriate and helpful to perform some portion of the taxpayer's business in his personal residence." S. Rep. 94-938 (1976), 1976-3 C.B. 49, 185.

The four business related exceptions to I.R.C. section 280A(a)'s general exclusion rule are: 1) certain business use of a home; 2) storage space for inventory; 3) rental property; and 4) day care facilities. I.R.C. sections 280A(c)(1), (2), (3), (4); Feldman v. Commissioner, 791 F.2d 781, 783 (9th Cir. 1986). Storage space for inventory, rental property, and day care facilities are not involved in the instant case. The only exception to I.R.C. section 280A(a)'s general exclusion, which might apply to the case at bar is I.R.C. section 280A(c)(1)'s certain business use of a home.

The three subdivisions of I.R.C. section 280A(c)(1)'s certain business use exception to I.R.C. section 280A(a)'s general exclusion are: A) the taxpayer's principal place of business; B) a place of business used by patients, clients or customers; or, C) a separate structure not attached to the dwelling unit which is used in connection with the taxpayer's business. For any I.R.C. section 280A(c)(1) section to apply, the item in question must be used exclusively and on a regular basis as either the taxpayer's principal place of business; a place of business used by patients, clients or customers; or, a separate structure not attached to the dwelling unit which is used in connection with the taxpayer's business. I.R.C. section 280A(c)(1), (2), (3). Petitioners' pleadings indicate that they claim to meet the separate structure exception.

I.R.C. sections 280A(c)(1)(C), with its prefaces provide:

(c) Exceptions for certain business or rental use; limitation on

(1) Certain business use. Subsection (a) shall not apply to any

(C) in the case of a separate structure which is not attached to

For I.R.C. section 280A(c)(1)(C) to apply, the nonemployee taxpayer

Storage alone fails to qualify as a separate structure under I.R.C. section 280A(c)(1)(C) because I.R.C. section 280A(c)(2) provides an exception to I.R.C. section 280A(a)'s general exclusion for storage space in a dwelling unit used on a regular basis for storing inventory used in the taxpayer's trade of business of selling products at retail or wholesale and had Congress intended that every storage space be excluded from I.R.C. section 280A, it would not have crafted the statute so narrowly. Based on petitioners working between 40 to 60 hours a week performing actual cutting at timber sites, the seven hours a week use of the work shop, and the one hour of administrative work done at the residence, the usage of the work shop is nominal and fails to fall within I.R.C. section 280A(c)(1)(C)'s requirements of use "on a regular basis" that is "in connection with the taxpayer's trade or business".

Even if the Court finds that I.R.C. section 280A(c)(1)(C) is met, it does not matter on the issue of commuting because a taxpayer must meet I.R.C. section 280A(c)(1)(A)'s principal place of business test in order to deduct the costs of going from a residence to a work site and back. Support for this exists in: Congress's intent in enacting the narrow exceptions to I.R.C. section 280A(a)'s general rule of exclusion; a harmonizing of I.R.C. sections 162, 262 and 280A; case law decided just prior to application of I.R.C. section 280A; case law adjudicating I.R.C. section 280A(c)(1)(A).

Within I.R.C. section 162's principal place of business, be it a town, Forest, or other geographical area, is a specific location or locations where the importance of the taxpayer's work occurs such as a factory, hospital, construction site, or timber sites. A specific location is referred to in I.R.C. section 280A(c)(1)(A) as the taxpayer's principal place of business because I.R.C. section 280A deals with a home, and not a larger area such as a city or the Forest. A specific location or locations must be considered in order to harmonize and give meaning to I.R.C. section 162's business deduction, I.R.C. section 262's commuting exclusion, and I.R.C. section 280A's home office limitation. For example, if I.R.C. section 280A(c)(1)(A)'s principal place of business was interpreted to mean a city or akin area, then every taxpayer could deduct commuting because taxpayers all live in a city or some akin area. Moreover, in Commissioner v. Soliman, ___ U.S. ___, 113 S. Ct. 701 (1993), the Supreme Court concluded that the two primary considerations in deciding whether a home office is a taxpayer's 'principal place of business' for purposes of the home office deduction is the relative importance of activities per formed at each business location and the time spent at each place. Id. at 706. Where the important activity and the majority of the time occurs someplace other than the residence, no I.R.C. section 280(c)(1)(A) deduction exists. I.R.C. section 280A(c)(1)(A) affects commuting, because where the specific location of the taxpayer's home qualifies as the principal place of business under I.R.C. section 280A(c)(1)(A), then driving away from and back to the residence which was primarily motivated for business purposes, would not be commuting and would be deductible. This is in accord with case law decided prior to I.R.C. section 280A's enactment.

The Tax Court has held that it will "only permit a taxpayer to deduct travel between his home and other places of business where the use of his home office is so central to his business that trips from his home to other places of business are in the nature of normal and deductible business travel". Wisconsin Psychiatric Services, Ltd. v. Commissioner, 76 T.C. 839, 849 (1981). see also Curphey v. Commissioner, 73 T.C. 766, 777-8 (1980) ("We see no reason why the rule that local transportation expenses incurred in travel between one business location and another are deductible should not be equally applicable WHERE THE TAXPAYER'S PRINCIPAL PLACE OF BUSINESS WITH RESPECT TO THE ACTIVITIES INVOLVED IS HIS RESIDENCE." original emphasis); Hamblen v. Commissioner, 78 T.C. 53, 54 (1982); Fryer v. Commissioner, T.C. Memo. 1974-77. The mere fact that a taxpayer chose to do some work at home for voluntary reasons will not convert commuting expenses from the home to the taxpayer's first place of business and from the last place of business back to his home, into a deductible expense. Green v. Commissioner, 59 T.C. 456, 459 (1972). Where the primary motivation for a taxpayer's trip between his major place of business and his home was personal, no deduction is incurred. Mazzotta v. Commissioner, 57 T.C. 427, 429 (1971), aff'd, 465 F.2d 1399 (2d Cir. 1972) (travel by a government auditor from his major post of employment to his home, which was also his minor place of employment, as a credit union treasurer, was nondeductible on the basis that the primary purpose of the trip home was to be at home for personal reasons).

Wisconsin Psychiatric and Green dealt with tax years which had closed prior to enactment of I.R.C. section 280A. While both cases are pre-I.R.C. section 280A cases, they used terminology of "principal office" and the facts of each case would clearly bring them in or out of I.R.C. section 280A's guidelines (ie: the doctor in Wisconsin Psychiatric did a major portion of his outpatient work at his home which would qualify for I.R.C. section 280A(c)(1)(A), the key to deducting transportation from the residence, and the case also met I.R.C. section 280A(c)(1)(B) which alone would not permit the deduction of transportation expenses). Green and Mazzotta would clearly not meet I.R.C. section 280A. The deductibility of transportation costs from the home office as allowed in the Wisconsin Psychiatric case and codified in I.R.C. section 280A(c)(1)(A) restricts a taxpayer's ability to deduct transportation expenses from their residence to work sites and back. To allow a taxpayer to claim a transportation deduction for driving from the residence to the first work site of day and back, without requiring the taxpayer to meet I.R.C. section 280A(c)(1)(A), would permit the taxpayer to circumvent I.R.C. section 280A and thus transform nondeductible I.R.C. section 262 commuting expenses into deductible transportation expenses under I.R.C. section 162(a). See Hamacher v. Commissioner, 94 T.C. 348, 359 (1990) ("[B]ecause the automobile expenses were incurred in commuting to and from a home office which does not qualify under section 280A(c)(1), the automobile expense are not deductible."); Dudley v. Commissioner, T.C. Memo. 1987-607, aff'd without published opinion, 860 F.2d 1078 (6th Cir. 1988) ("Because we have found that petitioner's home office was not his principal place of business, we hold that the disputed transportation costs are nondeductible commuting expenses.") Therefore, a harmonizing of the statutes involved, Congress's intent, and the case law, all compel the conclusion that: unless a taxpayer's residence qualifies for I.R.C. section 280A(c)(1)(A), a taxpayer's transportation from the residence and its appurtenant area to the first work site of the day and from the last work site of the day back to the residence and its appurtenant area, is nondeductible commuting. As discussed above, Fausner and Rev. Rul. 75-380 bar the deductibility of commuting expenses also but Fausner and Rev. Rul. 75-380 allow a deduction to the extent that the driving expenses incurred exceed commuting costs which is one mile per gallon on normal fuel consumption of 13 miles per gallon in the two wheel drive mode of the truck and 8 miles per gallon in the four wheel drive mode of the truck.

6. THE DEDUCTIBILITY OF DRIVING BETWEEN CUTTING SITES AND FOR SUPPLIES AND REPAIRS OF EQUIPMENT.

Transportation expenses incurred by a taxpayer going between job sites are deductible although travel from residence to the first job site of the day and travel from the last job site to home is disallowed as commuting. Gordon v. Commissioner, T.C. Memo. 1990-182, aff'd without opinion, 980 F.2d 723 (3d Cir. 1992); Barnes v. Commissioner, T.C. Memo. 1986-585. Respondent interprets Rev. Rul. 55-109, 1955-1 C.B. 261, as standing for the proposition that transportation between work sites is deductible. Respondent allowed for the vehicle expenses associated with petitioners' logging travel as such travel constituted driving between cutting sites or trips to secure business supplies and equipment. All other transportation expenses are nondeductible.

7. WHY THE OPINION OF WALKER v. COMMISSIONER, T.C. MEMO 1993-311 SHOULD NOT BE FOLLOWED.

Petitioners' raising of the opinion of Walker v. Commissioner, T.C. Memo. 1993-311, and the circumstances of that opinion compel a discussion of it. Judge Joan Seitz Pate issued the July 15, 1993 Walker opinion wherein she concluded that a logger's commuting costs from his residence to the first cutting site and from the last cutting site back to the logger's residence, were deductible transportation expenses. The appeal time on Walker has yet to expire. The most relevant substantive reason why Walker should not be followed is due to the opinion's conclusion that I.R.C. section 280A does not apply.

The Walker opinion refused to apply I.R.C. section 280A to a logger who performed seven hours a week of logger duties (ie: maintain equipment, phone calls, fuel, etc.) at his residence and nearby work shop and cut about 40 hours a week at various work sites in the Forest. The opinion concluded that Walker's work shop was his principal place of business on grounds that work done at the work shop was essential to the cutting business and that the cutter spent more time at the work shop than any other single cutting site.

The Tax Court however has concluded that I.R.C. section 280A is involved when deductions such as mileage from and to a home office are at issue. Hamacher, 94 T.C. at 359 ("[B]ecause the automobile expenses were incurred in commuting to and from a home office which does not qualify under section 280A(c)(1), the automobile expenses are not deductible"). The mileage at issue in Walker, as in the case at bar, involves transportation to and from a cutter's residence and area appurtenant thereto and cutting sites. Respondent maintains that I.R.C. section 280A is controlling and it is dispositive as to whether a cutter can deduct transportation costs between his residence and the first and last cutting sites of the day.

The Supreme Court's recent Soliman decision dealt with a taxpayer claiming a home office deduction on the basis of principal place of business. As discussed above, Soliman's two primary considerations in deciding whether a home office is a taxpayer's 'principal place of business' is the relative importance of activities performed at each business location and the time spent at each location. Soliman, 113 S. Ct. at 706. The relative importance analysis of work involves an objective description of the business in question. Id. at 706-707. The point where services are delivered by a taxpayer must be given great weight, and is the principal consideration, in determining where the most important work functions are performed. Id. Doctor Nader E. Soliman was an anesthesiologist and Charles Walker, as well as the petitioner, are cutters. Soliman's points where services are delivered were hospitals and a cutter's point are cutting sites. Soliman performed essential services at his residence such as billings and telephone calls but because the important income producing work of anesthesiologist services occurred at hospitals, the home office deduction was denied. Id. at 707. Similarly, a cutter's income production arises from the cutting of trees at cutting sites, the cutter's principal place of business, despite the performance of some essential equipment maintenance in his work shop and record keeping and phone calls in the home. Therefore, under Soliman, which the Walker opinion did not apply, a cutter's principal place of business is not his residence and area appurtenant thereto. As to the time allocation issue, the Walker opinion refused to lump together the time spent at the cutting sites despite the Supreme Court considering in total the time Dr. Soliman spent at three different hospitals. Id. at 708. David Burleson spent seven hours a week at his work shop and 40 to 60 hours a week at cutting sites evidencing a majority of time spent away from the residence and area appurtenant to it.

Respondent maintains that in Walker, as well as in the case at bar, that only I.R.C. section 280A(c)(1)(A)'s principal place of business or I.R.C. section 280A(c)(1)(C)'s separate structure might be an exception to I.R.C. section 280A(a)'s general disallowance rule. Walker did not apply Soliman which respondent maintains controls the instant case as we1l as the Walkers' circumstances as to I.R.C. section 280A(c)(1)(A)'s principal place of business. Had the Walker opinion applied I.R.C. section 280A, the Walkers' would have not met an exception to I.R.C. section 280A(a)'s general disallowance rule because, "[Charles Walker] may have failed to qualify under section 280A . . .". Walker, slip opinion at 18. The cases cited in Walker allowed or did not allow a deduction for home office expenses under what now has been codified under I.R.C. section 280A(c)(1)(A). The cited cases were decided pre-Soliman and they did not deal with I.R.C. section 280A head on, in part because the majority of the cited cases are pre-I.R.C. section 280A cases.

The Walker opinion's conclusion that the work shop near the residence is a principal place of business raises the possibility of an exception to I.R.C. section 280A(a)'s exclusion rule under I.R.C. section 280A(c)(1)(C)'s separate structure, a code section not addressed in the opinion. The existence of a separate structure alone under I.R.C. section 280A(c)(1)(C) however will not give rise to the ability to deduct commuting because, as discussed above, the case law indicates that only driving to and from the principal place of business will suffice. The Tax Court has held that it will "only permit a taxpayer to deduct travel between his home and other places of business where the use of his home office is so central to his business that trips from his home to other places of business are in the nature of normal and deductible business travel". Wisconsin Psychiatric, 76 T.C. at 849 (1981); see also Curphey, 73 T.C. at 777- 8. The above discussion on and immediately following Wisconsin Psychiatric applies. There exists no case law which allows commuting deductions if only I.R.C. section 280A(c)(1)(C)'s separate structure is met and deductions from income are narrowly construed. The effect of the Walker opinion is that while a taxpayer cannot deduct business use of his home or separate structure, he can deduct mileage to and from the residence and area appurtenant thereto and work sites by meeting the amorphous test of "essential to" which circumvents the prohibitions of I.R.C. section 262. The Walker opinion should not be followed because it is not binding and because the opinion cannot be reconciled with the controlling cases such as Soliman and Hamacher.

Furthermore, a subsequent case, Coutsoubelis v. Commissioner, T.C. Memo. 1993-457, properly applied Soliman to a situation similar to that of Walker and concluded that the taxpayer's home office was not his principal place of business. Coutsoubelis made his living painting gasoline service stations. Like Walker, he was self-employed and maintained an office in his home where he performed functions that were arguably essential to his business. Also like Walker, he moved from one job site to another performing his services and worked at the job site only long enough to complete a fixed task.

In Coutsoubelis, however, the court followed Soliman and ruled that the delivery point of the painting services was the principle place of business. It also aggregated the time spent at the different gas stations and concluded that since the taxpayer spent most of his time at the points where services were delivered, his home office could not be his principal place of business under Soliman.

In summary, respondent's position is that Walker was wrongly decided because under Hamacher, a taxpayer can not deduct travel to and from his residence unless his home office qualifies for a deduction under I.R.C. section 280A(c)(1). The court should have applied Soliman to conclude that Walker's home office was not his principal place of business. Had the court done so, it would then have concluded that the expenses incurred in driving to and from his residence were nondeductible commuting costs.

II.

WHETHER PETITIONERS ARE ENTITLED TO DEDUCT SCHEDULE C EXPENSES OF

A taxpayer seeking a deduction must show that the claimed deduction comes within the applicable statute's terms. New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440, 54 S. Ct. 788, 790 (1934). The laundry and professional fee expenses claimed on petitioners' 1988 Schedule C, to qualify as an I.R.C. section 162(a) deduction, must arise in the ordinary and necessary course of business, be related to the taxpayer's business, and actually be incurred or paid. I.R.C. section 162(a); Treas. Reg. sections 1.162-2(a), 1.162-11. Disallowed laundry and professional fee expenses have not been established as having met the test criteria for being valid Schedule C business deductions. David Burleson's dirty logging clothes would need to be laundered as would the clothes of other working taxpayers. David Burleson's truck, like the vehicles of all commuters by motor vehicle, would need to be cleaned periodically. The claimed laundry and cleaning expenses are nondeductible personal expenses under I.R.C. section 262(a).

To establish entitlement to a business deduction under Schedule C, the petitioners must show that the professional fee claimed was incurred as an ordinary and necessary expense paid in carrying on their trade or business. See Hamdi v. Commissioner, T.C. Memo. 1993- 38; Conti v. Commissioner, T.C. Memo. 1992-616; Balis v. Commissioner, T.C. Memo. 1992-34; Weiss v. Commissioner, T.C. Memo. 1990-492; O'Connor v. Commissioner, T.C. Memo 1986-444. As to an individual taxpayer's income tax return, only expenses incurred in preparing that portion of the taxpayer's income tax return that relates to the taxpayer's business as a sole proprietor may be claimed as a Schedule C expense. Rev. Rul. 92-29, 1992-1 C.B. 20. The professional fees at issue represent the cost to prepare petitioners' tax return. Petitioners have not shown what, if any, portion of the return preparation expense was attributable to their cutting business. The professional fees claimed were personal in nature and allowable as a Schedule A expense but because the amount fails to exceed I.R.C. section 67(a)'s two percent adjusted gross income floor, the professional fee is not deductible.

III.

WHETHER PETITIONERS ARE LIABLE FOR INCREASED

Item 10A of the statutory notice of deficiency reflects a $1,372.00 addition to self employment tax due to the net effect of changes made to petitioners' Schedule C income. Net earnings from a taxpayer's trade or business which are not excluded under I.R.C. section 1402, are subject to self-employment tax. I.R.C. sections 1401-1403. Income derived from a trade or business, when used with reference to the self employment tax, is given the same meaning as used in I.R.C. section 162 with limited exceptions not applicable to the petitioners. I.R.C. section 1402(c). Petitioners' increased net earnings due to adjustments to petitioners' Schedule C, increased the self-employment tax. The parties have stipulated that this issue is computational. Stip. paragraph 13.

IV.

WHETHER PETITIONERS CHILD AND DEPENDENT

Item 8A of the statutory notice of deficiency reflects a reduction of 1988 claimed credit for child and dependent care. Changes to petitioners' income resulted in changes in adjustments to petitioners' earned income credit. I.R.C. section 21. The parties have stipulated that this issue is computational. Stip. paragraph 11.

CONCLUSION

It follows that the determination of the Commissioner of Internal Revenue should be sustained.

DAVID L. JORDAN

Date: October 25, 1993 By: MICHAEL W. LLOYD

OF COUNSEL:

FOOTNOTES

/1/ The mathematics underlying the $504.00 concession involves: 1/13 (normal mileage in two wheel drive) x 50% (amount of time in two wheel drive) x $4,993.00 (vehicle expense claimed) + 1/8 (normal mileage in four wheel drive) x 50% (amount of time in four wheel drive) x $4,993.00 (vehicle expense claimed).

/2/ As to land measure, there are 640 acres in a square mile. Black's Law Dictionary 791 (5th ed. 1979).

/3/ The 3,126 square mile area is based on the admitted map displaying a legend whereby one inch equals 3.25 miles and that the Chicago metropolitan area was 23 inches by 13 inches. ((23 x 3.25) x (40 x 3.25)).

/4/ The 2,398 square mile area is based on the admitted map displaying a legend of one inch equalling 2 miles and that the Washington D.C. metropolitan area was 27.25 inches by 22 inches ((27.25 x 2) x (22 x 2)).

/5/ An I.R.C. section 162(a)(2) case allowing transportation costs from a city centrally located near log sites to daily log sites did so on grounds that the trips were temporary, outside the tax home, and the taxpayer transported tools to the site. Crowther v. Commissioner, 269 F.2d 292, 298-99 (9th Cir. 1959), acq. 1964-2 C.B. 4. While I.R.C. section 162(a)(2) applies by analogy, the driving part of the Crowther decision is no longer good law as the law has evolved. Fausner v. Commissioner, 413 U.S. 838, 93 S. Ct. 2820, reh'g denied, 414 U.S. 882, 94 S. Ct. 43 (1973); I.R.C. section 280A; Rev. Rul. 90-23, 1990-1 C.B. 28; Rev. Rul. 75-380, 1975-2 C.B. 59. Also, the facts are distinct because, as discussed herein, petitioner's timber work is not temporary and only transportation to work sites in the Forest is at issue. See Sanders v. Commissioner, 439 F.2d 296 (9th Cir.), cert. denied, 404 U.S. 864, 92 S. Ct. 55 (1971). Even if Crowther were still good law in the Ninth Circuit, it has never been followed in other circuits. In fact, this court was never comfortable with Crowther, essentially refusing to follow it when similar facts were presented in Mathews v. Commissioner, 36 T.C. 483, 486 (1961): "With all due respect to the Ninth Circuit we cannot accede to the view that such work locations constitute severable jobs of a temporary character." Although the Ninth Circuit reversed Mathews, 310 F.2d 98 (9th cir. 1962), this court has nonetheless adhered to the standard enunciated in Heuer v. Commissioner, 32 T.C. 947 (1959), aff'd per curiam, 283 F.2d 865 (5th Cir. 1960). In Heuer, this court concluded that a river boat pilot who reported to temporary assignments at more than 100 different locations within a "large area" could not deduct expenses incurred in traveling between his home and the job sites. Id. at 952.

/6/ Respondent acknowledges that in Advance Notice 93-12, 1993-8 I.R.B. 46, it determined to allow an exception to the application of Commissioner v. Soliman, ___ U.S. ___, 113 S. Ct. 701 (1993) as to I.R.C. section 280A(c)(1)(A). While this Notice has no legal effect on the Court's decision, see Continental Ill. Corp. v. Commissioner, T.C. Memo 1989-636, it should be noted that petitioners do not meet this exception in this case.

END OF FOOTNOTES