                          T.C. Memo. 1995-451



                        UNITED STATES TAX COURT


                      ROLF KIRSCH, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent


        Docket No. 13887-93.           Filed September 25, 1995.


        Rolf Kirsch, pro se.

        Daniel J. Parent, for respondent.

                          MEMORANDUM OPINION

        POWELL, Special Trial Judge:   This case was heard pursuant

to the provisions of section 7443A(b)(3) and Rules 180, 181, and

182.1

        Respondent determined a deficiency in petitioner's Federal

income tax for the taxable year 1989 in the amount of $7,466 and


1
     All section references are to the Internal Revenue Code in
effect for the year in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
                                - 2 -

an addition to tax under section 6651 in the amount of $1,866.

Petitioner resided in Auburn, California, when he timely filed

his petition.

     Following a concession,2 the issues are whether petitioner

(1) may deduct certain "away from home" and car and truck

expenses as trade or business expenses, (2) may deduct on

Schedule C certain "draws" paid to him by his business, (3) may

deduct health insurance premiums on Schedule C, and (4) is liable

for an addition to tax under section 6651 for filing his return

late.

     The facts may be summarized as follows.    Petitioner operated

a machine shop, Kirsch Machine Shop, as a sole proprietorship in

Santa Clara, California, from 1968 until 1990.    In 1988

petitioner sold his home in the Santa Clara area and moved his

family to Auburn, California--approximately 140 miles away from

the machine shop.    The reason for the move was that the quality

of life was thought to be better in Auburn.

     During 1989, petitioner spent weeknights in motels in Santa

Clara and drove back to Auburn on weekends.    Petitioner also

performed an unspecified amount of driving for his business

during the week.    Petitioner withdrew $28,175 from his machine

shop business during 1989 to provide himself a salary (draw), and

paid $3,937 for health insurance in that year.

2
     Respondent concedes that petitioner is entitled to use the
filing status of married filing separately.
                                - 3 -

       On Schedule C of petitioner's 1989 Federal income tax

return, petitioner deducted $11,000 as "away from home" expenses,

$1,781 in car and truck expenses, and draw expenses of $28,175.

He also claimed a deduction for health insurance premiums in the

amount of $3,937.    Respondent received petitioner's return on

January 6, 1992.

       Upon examination, respondent disallowed the deductions

related to away from home, car and truck, and draw expenses.

Respondent also determined that the deduction for petitioner's

health insurance premiums was treated incorrectly, and allowed

him a deduction from gross income of 25 percent of the amount

paid.    As a result of the Schedule C adjustments, which turned

the reported business loss into a business profit, respondent

determined that petitioner was liable for self-employment income

tax.

       As a general rule, deductions for personal living expenses

are disallowed under section 262.       Commissioner v. Flowers, 326

U.S. 465, 470 (1946).    Section 162(a), however, allows taxpayers

to deduct "the ordinary and necessary expenses paid or incurred

during the taxable year in carrying on any trade or business,

including * * * traveling expenses (including amounts expended

for meals and lodging * * *) while away from home in the pursuit

of a trade or business".    With regard to deductions claimed under

section 162(a)(2), the expense must be (1) reasonable and
                               - 4 -

necessary, (2) incurred while away from home, and (3) incurred in

pursuit of a trade or business.    Commissioner v. Flowers, supra.

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

for purposes of the second prong of the Flowers test, is the

vicinity of the taxpayer's principal place of business or

employment, not the taxpayer's personal residence or place of

abode, 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.

611, 614 (1960).

     Furthermore, "The exigencies of business rather than the

personal conveniences and necessities of the traveler must be the

motivating factors."   Commissioner v. Flowers, supra at 474.     In

Flowers, the taxpayer resided in Jackson, Mississippi, but worked

about 200 miles away in Mobile, Alabama.   The Court denied his

claimed travel expenses, stating that the expenses were not

incurred in pursuit of the business of his employer.

     Had his post of duty been in * * * [Jackson] the cost
     of maintaining his home there and of commuting or
     driving to work concededly would be non-deductible
     living and personal expenses lacking the necessary
     direct relation to the prosecution of the business.
     * * * Whether he maintained one abode or two, whether
     he traveled three blocks or three hundred miles to
     work, the nature of these expenditures remained the
     same. [Id. at 473.]
                                 - 5 -

The Court further noted that deductions would be allowed only if

the employer forced the taxpayer to live somewhere other than the

vicinity of the business.     Id. at 474.

     In this case, petitioner's tax home was Santa Clara, and he

lived in Auburn for personal reasons.       Petitioner, therefore, is

not entitled to deductions for his travel between Santa Clara and

Auburn and for expenses incurred in Santa Clara.

     Regarding the travel that petitioner performed on the job,

petitioner has the burden of proving, through records or some

type of documentary evidence, that he is entitled to the

deduction.    Sec. 274(d).   Petitioner offered no such evidence.

Further, the $28,175 he deducted as a draw was used for personal

living expenses.    As such it is part of the business profit of

the sole proprietorship reported on Schedule C, and not

deductible.    Respondent's determinations are sustained.

     Turning to the health insurance issue, we note that the

deductibility of expenses is a matter of legislative grace.       New

Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).

Generally health insurance premiums are a medical expense

deductible as an itemized deduction to the extent they exceed 7.5

percent of adjusted gross income.     Sec. 213(a), (d)(1)(C).   Self-

employed individuals, however, generally may deduct 25 percent of

the amount paid for health insurance from gross income, without

the restrictions imposed on other medical expense deductions.

Sec. 162(l).    We, therefore, sustain respondent's disallowance of
                                 - 6 -

the Schedule C deduction for health insurance premiums and uphold

the allowance of an adjustment to income for self-employed health

insurance pursuant to section 162(l).

     With regard to the addition to tax for failure to file a

timely return pursuant to section 6651, the addition to tax will

apply unless the taxpayer can show that the failure to file a

timely return was due to reasonable cause and not to willful

neglect.   Sec. 6651(a)(1); Rule 142(a).    Petitioner indicated

that he filed his return late because he did not think he owed

any tax.   A taxpayer's belief that a return is not required to be

filed may constitute reasonable cause under section 6651(a)(1),

if supported by advice from a competent adviser who has been

informed of the relevant facts.     Beales v. Commissioner, T.C.

Memo. 1992-608.   Although petitioner had his return prepared by a

professional tax service, there is no indication that the

preparer was informed of the relevant facts and that petitioner's

failure to timely file was based on competent advice.

Respondent's determination is sustained.

     To reflect the foregoing,

                                 Decision will be entered

                          under Rule 155.
