                  T.C. Summary Opinion 2011-127



                     UNITED STATES TAX COURT



          BOBBY S. AND SARA E. ROBERTS, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket Nos. 5214-09S, 3421-10S.    Filed October 27, 2011.



     Jason J. Alley, for petitioners.

     Emile L. Hebert, III, for respondent.



     ARMEN, Special Trial Judge:   These consolidated cases were

heard pursuant to the provisions of section 7463 of the Internal

Revenue Code in effect at the time that the petition was filed.1

Pursuant to section 7463(b), the decision to be entered is not



     1
        Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code in effect for the
years in issue, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
                                  - 2 -

reviewable by any other court, and this opinion shall not be

treated as precedent for any other case.

     Respondent sent notices of deficiency to petitioners

determining deficiencies, additions to tax, and accuracy-related

penalties with respect to petitioners’ individual Federal income

taxes for the 2004, 2005, and 2006 taxable years as follows:2

                           Additions to Tax/Penalty Secs.
     Year     Deficiency   6651(a)(1) 6651(a)(2) 6662(a)
     2004     $9,895       $1,757.25   $1,796.30   $1,979.00
     2005      9,308          -0-         -0-       1,861.60
     2006      3,954          -0-         -0-         790.80

     The sole issue for decision is whether petitioners are

entitled to deduct transportation expenses under section 162(a),

incurred and paid by Bobby S. Roberts for travel between his home

office in Roanoke, Alabama, and his testing facility in Metairie,

Louisiana.3    The resolution of this issue turns on whether Bobby

S. Roberts’ “tax home” was in Roanoke, Alabama, or in Metairie,

Louisiana.4




     2
        Two notices of deficiency were sent to petitioners. The
first notice, which was dated Feb. 9, 2009, related to tax years
2004 and 2005. The second notice, which was dated Jan. 20, 2010,
related to tax year 2006. Petitioners timely filed petitions
with this Court in both instances, and the two cases were
subsequently consolidated for trial, briefing, and opinion.
     3
        All other issues presented by the notices of deficiency
have been conceded or otherwise resolved by the parties.
     4
        Respondent concedes that Sara E. Roberts’ tax home was in
Roanoke, Alabama, during the tax years in issue.
                               - 3 -

                            Background

     Some of the facts have been stipulated, and they are so

found.   We incorporate by reference the parties’ stipulation of

facts, as supplemented, and accompanying exhibits.    Petitioners

resided in the State of Alabama when the petitions were filed.

All references to petitioner in the singular are to petitioner

Bobby S. Roberts.

     After returning home from the Vietnam War, petitioner

attended Auburn University (Auburn) in Alabama where he completed

undergraduate and graduate studies in the Department of

Rehabilitation and Special Education.    Upon petitioner’s

graduation with a major in vocational evaluation, Auburn hired

him as a faculty member to coordinate the undergraduate

rehabilitation program.   Between 1974 and 1979, petitioner lived

in Alabama and worked as a faculty member for Auburn.

     In 1979, petitioner was recruited by Louisiana State

University (LSU) to develop and teach courses at its Health

Sciences Center in New Orleans.   Petitioner accepted the job,

moved to the New Orleans area, and worked at LSU from 1979 to

1985.

     In 1985, petitioner resigned from his position at LSU and

worked as a consultant with various hospitals in the New Orleans

area until finally, in late 1988, he and his family returned to

Alabama, where they settled into a home in Roanoke that
                                - 4 -

petitioner had purchased several years earlier.    At all relevant

times thereafter, petitioners resided in Roanoke, Alabama

(Roanoke).

     From late 1988 to 1990, petitioner again worked for Auburn,

but during this time as an adjunct faculty member.    He was also

employed as a vocational expert with the Social Security

Administration where he provided expert testimony at

administrative hearings that were conducted in both Alabama and

Georgia.

     In 1990, petitioner was recruited by Work Recovery, Inc.

(Work Recovery), to help develop rehabilitation facilities

throughout its southeast rehabilitation region (Southeast

Region), which consisted of Kentucky, Tennessee, North Carolina,

South Carolina, Georgia, Florida, Alabama, and Mississippi.5

Petitioner worked from his home in Roanoke, which was centrally

located within the Southeast Region.

     Although recruited by Work Recovery to develop the Southeast

Region, at one point during his employment petitioner assisted in

the development of a rehabilitation facility in Metairie,

Louisiana, located in the company’s southwest rehabilitation

region.    Petitioner, however, never operated or worked out of the

facility in Metairie.    Once the Metairie facility was completed,

petitioner returned to his work developing and researching


     5
          Work Recovery, Inc., was previously named Valpar Corp.
                               - 5 -

facilities in the Southeast Region.    One such facility that

petitioner worked on was Piedmont Hospital in Atlanta, Georgia.

     In 1997, Work Recovery filed for bankruptcy and petitioner,

finding himself unemployed, started a sole proprietorship

involved in vocational rehabilitation and evaluation services.

Because of his proximity to Auburn and his contacts there,

petitioner planned to continue working from his home office,

offering vocational rehabilitation services in the same Southeast

Region originally targeted by Work Recovery.    Consequently,

petitioner began working again with Piedmont Hospital in Atlanta,

Georgia, and also with the director of the State rehabilitation

facility in Alabama.

     Shortly after the creation of his sole proprietorship,

petitioner began receiving referrals from the Louisiana area

requesting his services.   Some of these referrals requested that

petitioner provide testing services in addition to other

evaluation services.   Petitioner informed these referral sources

that he did not have a testing facility or provide testing

services as part of his business.   After receiving additional

requests, however, petitioner began to look into providing

testing as an additional service and ultimately decided to obtain

a facility for this purpose.   In November 1997, petitioner signed

a lease for a building in Metairie, Louisiana, that became a
                                - 6 -

testing facility for his business.      At all times relevant

thereafter, petitioner had a facility for testing in Metairie.

     During 2004, 2005, and 2006, petitioner worked from a space

in his residence that he converted to a modest home office.       He

provided rehabilitation cost analyses, loss of earnings analyses,

and expert opinion assessments entirely from his home office.        No

testing was required to provide these services, and all work,

including the composition of a final expert report, was performed

from petitioner’s home office in Roanoke.

     During the tax years in issue, petitioner primarily traveled

to Metairie if a case required testing or if a deposition or

court appearance was scheduled.   When staying overnight in

Metairie, petitioner minimized his expenses, cooking food in a

small microwave oven and sleeping on a sofa bed in the waiting

room at his testing facility.   Consequently, petitioner only

deducted his transportation expenses.      Petitioner typically

arrived in Metairie on a Monday afternoon, and returned to

Roanoke either on a Wednesday or a Thursday morning.      If he had

no work to complete in Metairie, petitioner sometimes returned to

Roanoke on a Tuesday.   While in Roanoke, petitioner worked

Saturdays, and Sunday afternoons, after teaching Sunday school

and engaging in other personal activities.

     If a case required testing, petitioner would travel to his

testing facility in Metairie to perform the test.      The testing
                                - 7 -

process only took 4 hours per client on average.    In contrast,

the evaluation and reporting process in these cases, performed

entirely from petitioner’s home office, took an average of 7 to 8

hours per client.

     Petitioner also traveled to Louisiana to give testimony in

court or at a deposition.    When he was scheduled to give

testimony, however, petitioner would often arrive in Louisiana

only to discover that the case was settled or the deposition was

canceled.    Many times when this occurred, petitioner would return

to Roanoke early and work from his home office.

     In 2004, petitioner made 47 round-trip flights and a single

one-way flight between Birmingham, Alabama, and New Orleans,

Louisiana.

     In 2005, petitioner made 33 round-trip flights between

Alabama and Louisiana.   After Hurricane Katrina devastated New

Orleans in August 2005, Southwest Airlines canceled direct

flights between Birmingham and New Orleans, and petitioner’s

testing facility sustained heavy damage.    Thus, petitioner began

using his vehicle to travel to Metairie, hauling equipment that

he needed to make repairs.    Consequently, in 2005, petitioner

made 14 round trips with his vehicle, driving from his home

office in Roanoke, to Metairie.

     Unfortunately, because of the extent of the damage

sustained, petitioner was forced to eventually abandon his old
                               - 8 -

testing facility and lease a new facility in 2006.     From

September 2005 to October 2006, no testing was performed, and

petitioner conducted all of his work from his home office,

traveling to Metairie primarily to repair or otherwise relocate

his testing facility.   Consequently, in 2006, petitioner made 50

round trips in his vehicle from his home office to Metairie and

only conducted three tests that year.

                            Discussion6

     Generally, expenditures for transportation between a

taxpayer’s home and place of business are considered personal

expenses and are not deductible.     See sec. 262; Fausner v.

Commissioner, 413 U.S. 838 (1973); secs. 1.162-2(e), 1.262-

1(b)(5), Income Tax Regs.   Transportation expenses, however, may

be deducted under section 162(a)(2) if they are:     (1) Ordinary

and necessary; (2) incurred while “away from home”; and (3)

incurred in pursuit of a trade or business.     Commissioner v.

Flowers, 326 U.S. 465, 470 (1946).     The reference to “home” in

section 162(a)(2) means the taxpayer’s “tax home”.7    Mitchell v.

Commissioner, 74 T.C. 578, 581 (1980); Foote v. Commissioner, 67


     6
         Our decision is made without regard to the burden of
proof.
     7
        The vocational “tax home” concept was first construed by
this Court in Bixler v. Commissioner, 5 B.T.A. 1181, 1184 (1927),
and has been steadfastly upheld by this Court. See, e.g., Horton
v. Commissioner, 86 T.C. 589 (1986); Leamy v. Commissioner, 85
T.C. 798 (1985); Foote v. Commissioner, 67 T.C. 1 (1976); Kroll
v. Commissioner, 49 T.C. 557 (1968).
                                   - 9 -

T.C. 1, 4 (1976); Kroll v. Commissioner, 49 T.C. 557, 561-562

(1968).

       This Court has held as a general rule that the location of a

taxpayer’s principal place of business is his tax home, not the

location of the taxpayer’s personal residence.       Mitchell v.

Commissioner, supra at 581; Kroll v. Commissioner, supra at 561-

562.       When a home office, however, qualifies as the taxpayer’s

principal place of business under section 280A(c)(1)(A), then the

taxpayer’s personal residence is considered his tax home and

expenses paid or incurred traveling between that residence and

another workplace may be deductible.       See Strohmaier v.

Commissioner, 113 T.C. 106, 113 (1999); Wis. Psychiatric Servs.,

Ltd. v. Commissioner, 76 T.C. 839, 849 (1981); Curphey v.

Commissioner, 73 T.C. 766, 777-778, (1980).       Therefore, we must

decide whether petitioner’s home office in Roanoke was his

principal place of business under section 280A(c)(1)(A), even

though petitioner did not claim a home office deduction on his

tax returns for the tax years in issue.8

       When a taxpayer conducts business from both a home office

and another workplace, and a determination must be made as to

which qualifies as the taxpayer’s principal place of business,

two objective factors are given primary consideration:         (1) The



       8
        Petitioner makes no claims for home office deductions in
these cases.
                              - 10 -

relative importance of the business functions or activities

conducted at each place, and (2) the amount of time expended at

each place.   Commissioner v. Soliman, 506 U.S. 168, 175-177

(1993); Strohmaier v. Commissioner, supra at 111-112.

     After careful consideration of the record, we find that

petitioner’s home office was his principal place of business

during the years in issue and, therefore, Roanoke was his tax

home.   Consequently, we hold that petitioners are entitled to

deduct the ordinary and necessary transportation expenses paid or

incurred for travel away from Roanoke in pursuit of petitioner’s

business.

     Petitioner testified at trial that he converted a portion of

his residence to a home office that he used on a regular basis to

conduct analysis, draft reports, and perform other functions for

his business.   We credit petitioner’s testimony at trial and find

that he used his modest home office exclusively and on a regular

basis for his business during the tax years in issue.   See sec.

280A(c)(1).

     Moreover, there is ample evidence in the record to support

the conclusion that petitioner’s home office in Roanoke was his

principal place of business during the tax years in issue.     See

sec. 280A(c).

     First, petitioner performed the most important functions of

his business from his home office in Roanoke.   He provided
                              - 11 -

rehabilitation cost analyses, loss of earnings analyses, and

expert opinion assessments entirely from his home office.    No

testing was required to provide these services.   Even when a case

required petitioner to travel to Metairie to conduct a test, the

testing process itself was a relatively small component of the

overall service provided.   The testing data was collected as one

step in the process that petitioner used to conduct his analysis,

formulate his opinion, and draft his expert reports.   The service

provided by petitioner is not the collection of raw data through

testing; it is his complex analysis of that data, the formulation

of an expert opinion, and the presentation of that opinion in the

form of a clear and concise written report.   Consequently, we

find that the most important functions performed by petitioner,

even in cases that involved testing, were analysis of data

collected, formulation of expert opinions, and composition of

expert reports.   These functions were entirely performed from

petitioner’s home office.

     We note that petitioner would also travel to Louisiana for

the purpose of giving testimony either in court or at a

deposition.   Giving testimony, however, is ancillary to what we

find to be the most important services provided by petitioner.

Therefore, given petitioner’s credible testimony at trial, we

find that the relative importance of the business functions

petitioner conducted from his home office in Roanoke
                             - 12 -

substantially outweigh the activities petitioner performed in

Louisiana.

     Second, not only did petitioner perform the most important

functions of his business from his home office in Roanoke; he

spent most of his time working there as well.   Petitioner

typically arrived in Louisiana on a Monday afternoon, and

returned to Roanoke either on a Wednesday or a Thursday morning.

If petitioner had no work to complete in Louisiana, he sometimes

returned to Roanoke on a Tuesday.   While in Roanoke, petitioner

worked on Saturdays, and even Sundays after teaching Sunday

school and engaging in other personal activities.

     If a case required testing in Metairie, the testing process

only took 4 hours per client on average.   In contrast, the

evaluation and reporting process in these cases, performed

entirely in Roanoke, took an average of 7 to 8 hours per client.

Consequently, even when petitioner had a case that required

testing, he spent twice as much time, on average, analyzing data

and drafting his reports in Roanoke than he did testing a client

in Metairie.

     The record does not provide as clear a measure regarding how

much time petitioner spent giving testimony in Louisiana at a

court appearance or a deposition.   When he traveled to Louisiana

for the purpose of giving testimony, however, petitioner would

often arrive only to discover that the case was settled or the
                              - 13 -

deposition was canceled.   In any event, petitioner’s ancillary

and irregular appearances in court or at a deposition in

Louisiana, even when coupled with the testing process and other

minor activities he may have performed there, do not outweigh the

time he spent performing business functions at his home office.

Therefore, although he traveled to Louisiana frequently, we find

that petitioner spent more time performing analysis and drafting

reports from his home office in Roanoke than he spent performing

business activities in Louisiana.

     Finally, we disagree with respondent’s contention that

petitioner maintained his home office in Roanoke for personal

reasons, specifically, because petitioner’s wife and children

resided there.   Instead, the record suggests that petitioner

maintained his home office in Roanoke because of the exigencies

of his business, not personal reasons.   When Work Recovery shut

down and he started his own business, petitioner continued the

Southeast Region business model.    Petitioner began working again

with Piedmont Hospital in Atlanta, Georgia, and also working with

the director of the State rehabilitation facility in Alabama.

Although he would travel to Louisiana for cases that required

testing and to provide testimony, his home office in Roanoke

remained centrally located within the Southeast Region.

Therefore, we find that petitioner maintained his home office in
                              - 14 -

Roanoke not for personal reasons, but because of his business

model.

     In conclusion, petitioner’s principal place of business, and

therefore his tax home, was in Roanoke, Alabama, during the tax

years in issue.   Consequently, petitioner was “away from home”

within the meaning of section 162(a)(2) when he incurred

transportation expenses for traveling between his home office and

Louisiana in pursuit of his business.    Accordingly, petitioner is

entitled to deductions for transportation expenses incurred for

traveling between his home office and Louisiana in pursuit of his

business during the tax years in issue.

                            Conclusion

     We have considered all of the other arguments made by

respondent and, to the extent that we have not specifically

addressed them, we conclude that they are without merit.

     To reflect the foregoing,

                                          Decisions will be entered

                                    under Rule 155.
