                  T.C. Summary Opinion 2002-148



                     UNITED STATES TAX COURT



               JOHN MICHAEL KERNAN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket No. 5655-01S.               Filed November 20, 2002.


     John Michael Kernan, pro se.

     Alvin A. Ohm, for respondent.



     COUVILLION, Special Trial Judge:   This case was heard

pursuant to section 7463 in effect when the petition was filed.1

The decision to be entered is not reviewable by any other court,

and this opinion should not be cited as authority.

     Respondent determined a deficiency of $14,364 in

petitioner's Federal income tax for 1996.


     1
          Unless otherwise indicated, section references
hereafter are to the Internal Revenue Code in effect for the year
at issue.
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     The sole issue for decision is whether petitioner is

entitled to deductions under section 162(a)(2) for expenses while

away from home for the year 1996.

     Some of the facts were stipulated.   Those facts and the

accompanying exhibits are so found and are incorporated herein by

reference.   Petitioner's legal residence at the time the petition

was filed was Dallas, Texas.

     Petitioner is a certified public accountant in the State of

Texas.   For the year at issue, petitioner was a consultant

specializing in the implementation of computer systems and, in

particular, a software application known as "Oracle Financials".

He conducted this work as a self-employed trade or business

activity that he reported on his Federal income tax return for

1996 on Schedule C, Profit or Loss From Business.

     From the time of his graduation from Texas A & M University

at College Station, Texas, in 1990, petitioner lived at Austin,

Texas.   He was employed for approximately 2 years by a nationally

recognized accounting firm and thereafter was employed by the

Texas Workers' Compensation Insurance Fund (the Fund) at Austin,

Texas.   Sometime during March 1996, petitioner's superior or

supervisor at the Fund obtained employment with Josten's, Inc.

(Josten's) at Memphis, Tennessee.   Through the efforts or

assistance of his former supervisor, petitioner was interviewed

at Josten's for the specific purpose of teaching Josten's project
                                - 3 -


managers in the use of the Oracle software system referred to

above.    Petitioner terminated his employment with the Fund, and,

sometime in March 1996, he entered into a contract with Josten's

for a period of 6 months commencing on April 1, 1996.   Petitioner

began work on or about the scheduled commencement date.   By

mutual agreement with Josten's, petitioner worked approximately 1

month beyond the expiration date of the contract, until November

1996.    All the work petitioner performed under this contract was

at the business facilities of Josten's at Memphis, Tennessee.     He

was not required to travel away from Josten's facilities, and he,

in fact, did not incur any traveling or other expenses in

connection with his contract except those that are at issue in

this proceeding.    Moreover, Josten's did not impose on petitioner

any restriction or requirement as to where petitioner was to live

during the contract.

     While living in Austin, Texas, petitioner owned a half

interest in a home that he shared with another individual.     His

interest in this home was fully paid for, and petitioner retained

that interest while he was engaged on the contract with Josten's

at Memphis, Tennessee.   Petitioner did not incur any expenses

relating to the Austin home while he was engaged on the Josten's

contract.    Petitioner moved out of the Austin, Texas, home on or

about March 28, 1996, and took up residence with a young lady who

lived at Knoxville, Tennessee, whom petitioner had met in
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December 1995.    One of the reasons petitioner became interested

in the contract with Josten's at Memphis was that it would lessen

the distance between Austin, Texas, and Knoxville, Tennessee.

His expectation was that the relationship with the young lady,

whom petitioner referred to as his "girlfriend", would become

permanent.   As petitioner described it at trial:


     I had started dating a girl in Knoxville in December of '95,
     and * * * wanted to try and make more of the distance
     between Knoxville and Austin, and so * * * when this
     opportunity * * * came up, * * * I was talking with her
     regarding it. * * * basically, the understanding was that *
     * * I'll accept it if we want to give this a shot. You
     know, basically, I'll live with her and move into Knoxville,
     make the commute, and then hopefully find * * * work * * *
     in Knoxville.


Petitioner moved in with his girlfriend at Knoxville, Tennessee,

on March 28, 1996, and began his contract with Josten's at

Memphis, Tennessee, on April 1, 1996.   He commuted on weekends to

Knoxville.   During the week, petitioner rented an apartment in

Memphis.    The arrangement between petitioner and his girlfriend

was that petitioner paid the rent on the apartment they shared in

Knoxville, and his girlfriend paid the utilities and telephone

expenses.    Petitioner was not a party to the rental contract on

the apartment, nor was there any written agreement between

petitioner and his girlfriend with respect to their living

arrangement.
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     Initially, petitioner commuted between Memphis and Knoxville

either by automobile or by commercial airline.       Both methods

proved to be time consuming and costly.       Petitioner made a

cost/benefit analysis from which he concluded it would be more

economical to purchase an airplane to make the weekly commute

between Knoxville and Memphis.    Accordingly, petitioner, in early

October 1996, purchased a Cessna model 192 airplane and, after

paying for flying lessons, thereafter used the plane to commute

between Memphis and Knoxville.

     Petitioner's contract with Josten's was completed in

November 1996, and he had no further contractual or employment

relationship with Josten's.   Petitioner then gave up the Memphis

apartment and continued living with his girlfriend at Knoxville.

He did not find employment at Knoxville.       In March 1997, the

relationship between petitioner and his girlfriend terminated.

Petitioner moved back to Austin, Texas, and found employment

there.

     On his Federal income tax return for 1996, petitioner

reported the income and expenses of the contract activity with

Josten's as a trade or business activity, which respondent does

not dispute.   Petitioner reported gross income of $216,616,

expenses of $198,677, and a net profit of $17,939.       In the notice

of deficiency, respondent disallowed deductions claimed for

expenses in the amount of $40,023.       The disallowed deductions
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consisted essentially of petitioner's meals and other living

expenses in Memphis, including rent on the Memphis apartment and

the expenses related thereto, the cost of the airplane and the

flying lessons, repairs to the plane, insurance, and the

traveling expenses incurred prior to purchase of the plane.2

     Respondent's position is that petitioner's tax home during

1996 was Memphis, Tennessee, and, therefore, the expenses at

issue were not incurred away from home within the intent and

meaning of section 162(a)(2).   Petitioner's position is that his

business activity at Memphis, Tennessee, was temporary and not

permanent or indefinite, and the expenses he incurred there are

deductible under section 162(a)(2).

     This Court has consistently held that a taxpayer's "home"

for purposes of section 162(a)(2) is the vicinity of the

taxpayer's principal place of business or employment and not

where the taxpayer's personal residence or place of abode is

located, if such residence or place of abode is at a place

different from the location of the place of employment.    Mitchell

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

49 T.C. 557, 561-562 (1968); Garlock v. Commissioner, 34 T.C.



     2
          Of the total amount claimed, $18,150 represented the
cost of the plane that petitioner deducted pursuant to sec. 179,
Election To Expense Certain Depreciable Assets. Petitioner, at
trial, conceded a $2,527 adjustment in the notice of deficiency
disallowing a deduction for clothing expenses.
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611, 614 (1960).   However, there is an exception to this rule

where the taxpayer accepts employment away from home if such

employment is considered "temporary" as opposed to "indefinite".

Commissioner v. Peurifoy, 254 F.2d 483, 486 (4th Cir. 1957),

affd. per curiam 358 U.S. 59 (1958).   Where such employment is

temporary, the taxpayer's "tax home" does not shift to the situs

of the temporary employment.   The taxpayer is regarded as "away

from home" while working at the temporary location.   The

underlying purpose for this exception (which allows a deduction

for living costs incurred at the temporary job) is that it is

unreasonable to expect the taxpayer to move a residence to a

temporary location.   Thus, by allowing a deduction for living

expenses at the temporary employment location, the burden is

mitigated for the taxpayer who incurs duplicate living expenses

which result from maintaining the regular place of abode and the

place of abode at the temporary location.   However, if a

taxpayer, for personal reasons, chooses to reside in a different

vicinity from the vicinity of the principal place of employment,

the residence is not recognized as the taxpayer's "tax home".

Commissioner v. Flowers, 326 U.S. 465 (1946); Jones v.

Commissioner, 54 T.C. 734, 740 (1970), affd. 444 F.2d 508 (5th

Cir. 1971).

     The Court is satisfied from the record that petitioner's

home during 1996, for tax purposes, was not Austin, Texas.
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Petitioner terminated his employment there and thereafter

incurred no further living expenses at Austin.      The record is

clear that petitioner left his employment at Austin to accept the

contract at Memphis, Tennessee, which would be nearer to his

girlfriend at Knoxville, Tennessee.      Since petitioner left his

home at Austin, Texas, the site of his employment became his tax

home.   The record is clear that petitioner's choice of Knoxville,

Tennessee, as a residence was solely for personal reasons and was

in no way related to the exigencies of his contract with Josten's

at Memphis.    The general rule is that a taxpayer's home, under

section 162(a)(2), is his abode at or near the vicinity of his

principal place of employment.     Coombs v. Commissioner, 608 F.2d

1269, 1274 (9th Cir. 1979), affg. in part and revg. and remanding

in part 67 T.C. 426 (1976).    It is immaterial whether

petitioner's contract at Memphis, Tennessee, was temporary or

indefinite because those distinctions are relevant only when the

taxpayer maintains a well-established home and is away from it.

United States v. Mathews, 332 F.2d 91, 93 (9th Cir. 1964).      The

Court holds, therefore, that the expenses at issue were personal

expenses under section 262 that are not deductible under section

162(a)(2).    Respondent, therefore, is sustained.
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    Reviewed and adopted as the report of the Small Tax Case

Division.



                                     Decision will be entered

                             for respondent.
