                        T.C. Memo. 2011-226



                      UNITED STATES TAX COURT



                  GARY A. LYSENG, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 13394-10.             Filed September 21, 2011.



     Jon J. Jensen, for petitioner.

     David L. Zoss, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     SWIFT, Judge:   Respondent determined a $5,023 deficiency in

petitioner’s 2007 Federal income tax plus a $1,005 accuracy-

related penalty under section 6662(a).

     The issues for decision are:   (1) Whether petitioner had a

tax home in Bemidji, Minnesota; (2) whether petitioner is

entitled to claimed unreimbursed employee business expenses; and
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(3) whether petitioner is liable for the section 6662(a)

accuracy-related penalty.

     The trial of this case was held on March 31, 2010, in St.

Paul, Minnesota.

     Unless otherwise indicated, all section references are to

the Internal Revenue Code (Code) in effect for 2007, and all Rule

references are to the Tax Court Rules of Practice and Procedure.

                        FINDINGS OF FACT

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

     From childhood petitioner has lived in and around Bemidji,

in north central Minnesota.   Petitioner purchased the Bemidji

home in which he lived during 2007 in 2000.   Petitioner, his

father, and his fiance live in this home.

     Petitioner is a contract laborer and works maintenance jobs

at nuclear power plants and other utility sites.   Petitioner’s

jobs last less than 1 year, and most last only a few months.     By

their nature petitioner’s jobs are temporary, and petitioner

seldom works twice for the same employer.

     Petitioner is a member of the chapter of the Laborer’s Union

(union) which serves workers in Bemidji.    At his home address in

Bemidji and through this union, petitioner is contacted regularly

about available temporary jobs in Minnesota and other States.

     Before 2007, in addition to working at jobs in Bemidji,

petitioner worked temporarily at jobsites in Bena, Park Rapids,
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and Wadena, Minnesota, approximately 25, 50, and 75 miles,

respectively, from Bemidji.   Also in prior years, petitioner

worked temporarily at nuclear power plants in Red Wing,

Minnesota, New Hampshire, and New Jersey.

     Petitioner’s jobs at nuclear power plants generally last a

few months as part of government-mandated biannual safety checks.

     During January and February 2007, petitioner had no job and

lived in his home in Bemidji.

     For 6 weeks, from early March to mid-April 2007, petitioner

worked at a Northern States Power (NSP) nuclear power plant in

Monticello, Minnesota.   Monticello is approximately 190 miles

from Bemidji, and during the week petitioner would stay overnight

in a motel in Monticello.

     Petitioner regularly recorded in his calendar book his

automobile mileage relating to his job with NSP, which in 2007

totaled 1,090 miles and which included driving to and from

Monticello from his home in Bemidji.

     From mid-April through most of August 2007, petitioner had

no job and lived in his home in Bemidji.

     In late August 2007, through a union contact petitioner

began a job in Utah and Wyoming with Sheehan Pipeline

Construction Co. (Sheehan).   Petitioner understood that his job

with Sheehan would last only a few months.   Petitioner’s job

involved maintenance work on an underground pipeline.
                                - 4 -

     In late August 2007, petitioner drove his automobile to Utah

to begin work with Sheehan.   Petitioner recorded in his calendar

book 1,200 automobile miles for this trip to Utah.    While in Utah

and Wyoming working for Sheehan, petitioner had access to another

automobile which he used for personal travel, and he apparently

stayed overnight in a travel trailer he owned.

     Petitioner paid $881 in union dues while working for

Sheehan.

     While working for Sheehan petitioner drove his own

automobile to perform his work assignments along the Sheehan

pipeline, sometimes driving over 100 miles a day.    Petitioner

kept track of the mileage driven for Sheehan and recorded the

mileage in his calendar book.   By the end of 2007 petitioner had

recorded 20,975 automobile miles working for Sheehan, which

included the trip from Bemidji to Utah.

     Petitioner worked for Sheehan in Utah and Wyoming until

March 2008.

     In addition to wages, Sheehan paid petitioner a per diem of

$148 for meals and lodging and $354 per week as an automobile

travel allowance.

     For Christmas vacation petitioner took a commercial airline

flight from Utah to Minnesota to visit his family in Bemidji.

     On December 31, 2007, petitioner purchased a computer.
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     On his 2007 Federal income tax return, among other things,

petitioner included as income both the total per diem payments

and the total weekly automobile travel allowance he received from

Sheehan in 2007.

     On his 2007 Federal income tax return petitioner attached a

Schedule A, Itemized Deductions, on which he claimed deductions

for unreimbursed employee business expenses of $24,742 ($11,284

in automobile expenses, $923 in meals and entertainment expenses,

and $12,535 in other miscellaneous business expenses).

     On audit, respondent disallowed the $24,742 petitioner

claimed as unreimbursed employee business expenses on the grounds

that Bemidji was not petitioner’s tax home, that petitioner did

not have a tax home, and that petitioner failed to substantiate

the expenses.   Respondent also determined that petitioner was

liable for a section 6662(a) accuracy-related penalty on the

total tax deficiency.

     At trial petitioner conceded some of the claimed expenses,

and he now claims only the following as deductible unreimbursed

employee business expenses:   $11,284 for automobile expenses,1

$1,422 for union dues, $100 for steel-toe boots, $1,417

depreciation on his travel trailer, $404 for airfare, $100 for



     1
      Petitioner multiplied the NSP 1,090 work miles, the 1,200
miles to Utah, and the Sheehan 20,975 work miles by the standard
mileage rate of 48.5 cents per mile for a total of $11,284. See
Rev. Proc. 2006-49, 2006-2 C.B. 936.
                               - 6 -

laundry services, and $600 for lodging while working for NSP in

Monticello.   Petitioner also still claims deductions for expenses

in unspecified amounts for a computer, a cell phone, a camera,

vehicle permits, and towing fees.

                              OPINION

      We first decide the threshold issue of whether petitioner’s

home in Bemidji was his tax home for purposes of section

162(a)(2).

      Section 162(a)(2) allows taxpayers to deduct travel expenses

incurred while away from home in pursuit of a trade or business.

Commissioner v. Flowers, 326 U.S. 465, 469 (1946).   In order to

deduct travel expenses a taxpayer generally must show that he or

she was away from home overnight when the expenses were incurred.

Id.   The purpose of the deduction is to alleviate the burden on

taxpayers whose business or employment require them to incur

duplicate living expenses.   Kroll v. Commissioner, 49 T.C. 557,

562 (1968).   For purposes of section 162(a)(2) the word “home”

generally means the vicinity of a taxpayer’s principal place of

work or employment, not the taxpayer’s personal residence.     Daly

v. Commissioner, 72 T.C. 190, 195 (1979), affd. 662 F.2d 253 (4th

Cir. 1981); Kroll v. Commissioner, supra at 561-562.

      A taxpayer may be treated as having no principal place of

work when the location of his work is always temporary.    Kroll v.
                               - 7 -

Commissioner, supra at 557; Albert v. Commissioner, 13 T.C. 129,

131 (1949); Farran v. Commissioner, T.C. Memo. 2007-151.

     However, when a taxpayer has no principal place of work, and

when the taxpayer maintains a personal residence or family home

remote from his temporary jobsite, the taxpayer’s home may be

treated as his tax home if:   (1) The taxpayer incurs duplicate

living expenses while traveling and maintaining the home; (2) the

taxpayer has personal and historical connections to the home; and

(3) the taxpayer has a business justification for maintaining the

home.   Hantzis v. Commissioner, 638 F.2d 248, 255 (1st Cir.

1981), revg. T.C. Memo. 1979-299; Minick v. Commissioner, T.C.

Memo. 2010-12; see also Rev. Rul. 73-529, 1973-2 C.B. 37.

     As we have found, petitioner’s work consisted of temporary

jobs that lasted only a few months.    Because his jobs were

temporary, during 2007 petitioner had no principal place of work.

Petitioner’s home expenses were duplicated when he traveled from

his home in Bemidji to his temporary jobsites, and his home has

historically been in and around Bemidji.

     Petitioner’s union has helped him find work in Minnesota,

and it appears reasonable that he will continue to use his union

and his address in Bemidji to obtain work in Minnesota.    See

Williams v. Commissioner, T.C. Memo. 1990-467 (identifying the

taxpayer’s membership in and continued contacts with a local

union as a business justification for maintaining a tax home away
                                - 8 -

from temporary jobs); Banekatis v. Commissioner, T.C. Memo. 1988-

474 (same).   Petitioner had an adequate business justification

for maintaining a home in Bemidji.

     We conclude that for 2007 Bemidji should be treated as

petitioner’s tax home.

     Petitioner’s travel and other reported expenses, however,

are still subject to the substantiation requirements of the Code

and the regulations.   See secs. 6001, 274(d); sec. 1.6001-1(a),

Income Tax Regs.

     Deductions are strictly a matter of legislative grace, and

taxpayers bear the burden of showing that their claimed

deductions satisfy the specific requirements of the relevant Code

provision.    See Rule 142(a); INDOPCO, Inc. v. Commissioner, 50

U.S. 79, 84 (1992).2

     In general, taxpayers must substantiate claimed deductions

with evidence such as invoices or receipts that establish that

the expenses were actually incurred and the business purpose for

the expenses.    Hradesky v. Commissioner, 65 T.C. 87, 90 (1975),

affd. per curiam 540 F.2d 821 (5th Cir. 1976).

     Petitioner now claims a deduction for union dues of $541

while working for NSP and $881 while working for Sheehan.   In

support of the claimed $541, petitioner provided a pay stub from



     2
      Petitioner has not argued that the burden of proof has
shifted to respondent.
                                - 9 -

NSP which labels the $541 as “Crft Tx Ad”.      This label does not

adequately indicate that the $541 represented union dues.

Furthermore, it is not clear that petitioner paid the $541

because this amount is listed on his pay stub as “earnings”,

rather than as an expense.    Petitioner has failed to substantiate

the claimed $541 deduction for union dues.

     In support of the claimed $881, petitioner provided a pay

stub from Sheehan which shows the $881 as an expense deduction

and labels the $881 “dues”.   We conclude that this pay stub,

combined with petitioner’s testimony, substantiates this claimed

deduction.

     Petitioner claims a $100 deduction for steel-toe boots

allegedly required for work at NSP.      The NSP pay stub provided to

petitioner lists $100 for “Safety Shoe” under “earnings”.        It is

unclear from the pay stub whether petitioner paid $100 for safety

shoes, received a $100 reimbursement for safety shoes, or was

provided safety shoes with a value of $100.      Petitioner has

failed to substantiate this claimed deduction.

     Petitioner claims a $1,417 depreciation deduction that is

based on a claimed cost basis in the travel trailer he stayed in

while working in Utah and Wyoming.      Petitioner provided no

evidence substantiating the trailer’s cost basis--no bill of

sale, no canceled check, and no third-party corroborating
                              - 10 -

testimony.   Petitioner has failed to substantiate the claimed

depreciation deduction on the travel trailer.

     Regarding his claimed deductions for laundry services,

vehicle permits, and towing fees, petitioner has provided no

evidence to substantiate these expenses, and they are not

allowed.

     To substantiate the claimed expenses for automobile mileage,

a computer, a cell phone, a camera, lodging in Monticello,

Minnesota, and airfare, petitioner has the added burden to

establish:   (1) The amount of each expense; (2) the time and

place when petitioner incurred the expense; and (3) the business

purpose.   See sec. 1.274-5T(b)(2), (6), Temporary Income Tax

Regs., 50 Fed. Reg. 46014, 46016 (Nov. 6, 1985); sec. 1.280F-

6(b), Income Tax Regs.

     For 2007 the Commissioner allows taxpayers to calculate the

amount of deductible automobile expenses by using the “standard

mileage rate” of 48.5 cents multiplied by the number of miles

driven for business.   See Rev. Proc. 2006-49, sec. 5.01, 2006-2

C.B. 936, 938.   This standard mileage rate may be used in lieu of

actual automobile expenses.   Id.   Using the standard mileage rate

aids only in calculating the amount of the claimed expense; the

taxpayer is still required to show the actual miles, the time and
                               - 11 -

place, and the business purpose of the travel.    Nicely v.

Commissioner, T.C. Memo. 2006-172; sec. 1.274-5(j)(2), Income Tax

Regs.

     If the taxpayer is reimbursed for automobile expenses, he

may not claim a deduction for the expenses unless the amounts

paid as reimbursements are also included as income on the

taxpayer’s tax return.    Sec. 1.62-2(c)(5), Income Tax Regs.

     Petitioner used his automobile regularly on his jobs and

received an automobile expense reimbursement for this use;

however, petitioner included the reimbursements received as

income on his tax return.    Petitioner, therefore, may claim as

deductions substantiated automobile expenses that relate to his

jobs.

     Petitioner recorded a total of 23,2653 automobile miles in

connection with his work with NSP and Sheehan.    Petitioner

regularly and accurately recorded his mileage in his calendar

book.    His calendar book adequately establishes the miles

traveled and the dates of the travel, and petitioner’s credible

testimony establishes the business purpose for the automobile

mileage incurred while he was working for NSP and Sheehan.




     3
      The total of 23,265 miles comprises 20,975 miles (Sheehan
work), plus 1,200 miles (travel to Utah), plus 1,090 miles (NSP
work).
                              - 12 -

Petitioner has adequately substantiated the claimed automobile

expenses of $11,284.4

     Petitioner provided no evidence to show that the computer he

purchased in December 2007 had a business purpose.   See sec.

1.274-5T(b)(6), Temporary Income Tax Regs., 50 Fed. Reg. 46016

(Nov. 6, 1985).   Petitioner has failed to substantiate his

claimed deduction for his computer.

     Petitioner provided no documentation to verify the claimed

$404 cost of the airfare to fly home from Utah.   Petitioner has

failed to adequately substantiate this claimed deduction.

     Petitioner has provided no documentation or credible

testimony to substantiate the claimed deductions for a cell

phone, a camera, and lodging in Monticello, Minnesota, and he is

not entitled to these claimed deductions.

     Petitioner may deduct $11,284 for unreimbursed automobile

expenses and $881 for union dues.   All other claimed deductions

are disallowed.

     Section 6662(a) and (b)(1) imposes an accuracy-related

penalty of 20 percent on any portion of an underpayment of tax

attributable to negligence or to disregard of rules or

regulations.




     4
      The total of 23,265 miles times 48.5 cents per mile
(standard mileage rate) equals $11,284. See Rev. Proc. 2006-49,
sec. 5.01, 2006-2 C.B. at 938.
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     While we recognize that petitioner has provided adequate

records to substantiate a portion of his claimed deductions, he

provided almost no evidence to substantiate the claimed

deductions which we disallow.    Petitioner’s attempt to claim and

benefit from deductions where he had no evidence to substantiate

them is grounds for imposing the section 6662(a) accuracy-related

penalty on that part of the tax deficiency that we sustain.      See

Higbee v. Commissioner, 116 T.C. 438 (2001).

     We sustain respondent’s imposition of the section 6662(a)

accuracy-related penalty on the tax deficiency after taking into

account the allowed deductions.

     To reflect the foregoing,


                                      Decision will be entered

                                 under Rule 155.
