                  T.C. Summary Opinion 2005-113



                     UNITED STATES TAX COURT



                PHILIP M. CAVANAGH, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket No. 18772-04S.           Filed August 4, 2005.


     Philip M. Cavanagh, pro se.

     John W. Stevens, for respondent.



      DEAN, Special Trial Judge:   This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed.   Unless otherwise

indicated, subsequent section references are to the Internal

Revenue Code in effect for the year in issue, and Rule references

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

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

this opinion should not be cited as authority.
                               - 2 -

     Respondent determined for 2002 a deficiency in petitioner’s

Federal income tax of $3,157.88.   After a concession,1 the issue

for decision is whether petitioner’s business transportation

expenses should be included on Schedule A, Itemized Deductions,

or on Schedule C, Profit or Loss from Business.     At the time the

petition in this case was filed, petitioner resided in Redford,

Michigan.

     This case was deemed to be submitted fully stipulated under

Rule 122, and the facts stipulated are so found.2

                             Background

     During 2002, petitioner held two jobs, one as a commissioner

for the County of Wayne (the county), and the other as a sales

representative for West Publishing Corp. (West).    During a

workday, petitioner would drive to various locations, performing

duties for both positions.

     Petitioner timely filed with the Internal Revenue Service a

Form 1040, U.S. Individual Income Tax Return, for 2002.

Attached to the return were various forms including a Schedule A

and two Forms 2106, Employee Business Expenses.




     1
      Respondent concedes that petitioner is entitled to a
deduction of $3,889 for additional State and local income taxes
and real estate taxes.
     2
      The facts are not in dispute, and the issue is primarily
one of law. Sec. 7491, concerning burden of proof, has no
bearing on this case.
                               - 3 -

     On the Form 2106 relating to petitioner’s employment with

West, petitioner reported the following expenses:

          Expense                              Amount

     Vehicle expenses                          $7,323
     Parking fees, tolls
       & transportation, etc.                     199
     Expenses away from home overnight          1,766
     Other business expenses                    2,048
       Total                                   11,336

     On the Form 2106 relating to petitioner’s employment with

the county, petitioner reported the following expenses:

          Expense                              Amount

     Vehicle expenses                          $1,830
     Expenses away from home overnight            442
     Other business expenses                      552
       Total                                    2,824

     These expenses, totaling $14,130, were deducted by

petitioner as unreimbursed employee expenses on his Schedule A.

     By letter, respondent notified petitioner of a proposed

adjustment in petitioner’s 2002 Federal income taxes resulting

from the application of the alternative minimum tax.    Respondent,

however, indicated that petitioner had an overpayment of

$1,197.12 resulting from the payment of excess Social Security

taxes of $4,355.

     Petitioner filed a Form 1040X, Amended U.S. Individual

Income Tax Return, for 2002.   Attached to the Form 1040X were

various forms including two Schedules C and two Forms 2106.
                                 - 4 -

     Petitioner moved from Schedule A to Schedule C the following

expenses relating to his employment with West:

          Expense                                Amount

     Vehicle expenses                            $7,323
     Parking fees, tolls
       & transportation, etc.                       199
       Total                                      7,522

Petitioner did not move his earnings from his employment with

West to the new Schedule C.

     Petitioner also moved from Schedule A to the second Schedule

C vehicle expenses of $1,830 relating to his employment with the

county.   Petitioner did not move his earnings from his employment

with the county to the new Schedule C.   Petitioner also reported

an additional Schedule A deduction of $3,889 for additional State

and local taxes and real estate taxes.

     Subsequently, respondent sent petitioner a notice of

deficiency for 2002 determining a deficiency of $3,157.88

resulting from the application of the alternative minimum tax.

Respondent also determined that petitioner had an overall

overpayment of $1,197.12 resulting from the payment of excess

Social Security taxes of $4,355.

     Additionally, respondent determined that petitioner’s

transportation expenses of $7,522 and $1,830 should be included

on Schedule A, not Schedule C.
                               - 5 -

                            Discussion

      Section 162(a) authorizes a deduction for all ordinary and

necessary expenses paid or incurred during a taxable year in

carrying on a trade or business.   A “trade or business” includes

the trade or business of being an employee.     O’Malley v.

Commissioner, 91 T.C. 352, 363-364 (1988); Primuth v.

Commissioner, 54 T.C. 374, 377-378 (1970).    The costs of going

between one business location and another business location

generally are deductible under section 162(a).    Rev. Rul. 55-109,

1955-1 C.B. 261.

      The parties disagree as to whether petitioner’s

transportation expenses should be reported on Schedule A or

Schedule C.   Respondent contends that petitioner, as an employee,

must claim the expenses at issue on his Schedule A as

miscellaneous itemized deductions and that they are limited to

the amount that exceeds the 2-percent floor imposed by section

67.

      Section 62(a)(1) allows taxpayers to deduct from gross

income trade or business expenses “which are attributable to a

trade or business carried on by the taxpayer, if such trade or

business does not consist of the performance of services by the

taxpayer as an employee.”   (Emphasis added.)    Expenses excluded

under the section 62(a)(1) employee expense limitation are

treated as itemized deductions under section 63(d).     Under
                                - 6 -

section 67(b),   “Miscellaneous itemized deductions”, defined as

all itemized deductions other than those specifically enumerated

therein, are subject to a 2-percent floor and are allowable “only

to the extent that the aggregate of such deductions exceeds 2

percent of adjusted gross income.”      Sec. 67(a).   Because trade or

business expenses subject to section 62(a)(1), such as

petitioner’s unreimbursed transportation expenses, are not among

the deductions listed in section 67(b), they are miscellaneous

itemized deductions subject to the 2-percent floor.      Secs. 62,

67, 162; see also Alexander v. Commissioner, 72 F.3d 938, 946

(1st Cir. 1995), affg. T.C. Memo. 1995-51.

     Further, Rev. Rul. 90-23, 1990-1 C.B. 28, 30,3 advises

petitioner to report his transportation expenses as miscellaneous

itemized deductions.   For a taxpayer with one or more regular

places of business:    “If the taxpayer is an employee, the

taxpayer may deduct * * * daily transportation expenses only as a

miscellaneous itemized deduction subject to the 2-percent floor

provided in section 67 of the Code.”      Id. (emphasis added).




     3
      Although revenue rulings are not binding on the courts, see
e.g., Stubbs, Overbeck & Associates v. United States, 445 F.2d
1142, 1146-1147 (5th Cir. 1971), they may be helpful and
persuasive, Twin Oaks Cmty., Inc. v. Commissioner, 87 T.C. 1233,
1252 (1986).
                               - 7 -

     On the basis of the foregoing, the Court concludes that

petitioner must report his transportation expenses as

miscellaneous itemized deductions on Schedule A.

     Reviewed and adopted as the report of the Small Tax Case

Division.


                                            Decision will be entered

                                       under Rule 155.




[Reporter’s Note: This opinion was amended by Order dated August
16, 2005.]
