                  T.C. Summary Opinion 2010-123



                     UNITED STATES TAX COURT



            PAUL AND LUCIA P. DELTORO, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 6475-09S.               Filed August 25, 2010.



     Paul and Lucia P. Deltoro, pro sese.

     Lesley Hale, for respondent.



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

the provisions of section 7463 of the Internal Revenue Code in

effect when the petition was filed.1   Pursuant to section

7463(b), the decision to be entered is not reviewable by any



     1
        Unless otherwise indicated, all subsequent 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 -

other court, and this opinion shall not be treated as precedent

for any other case.

       Respondent determined a deficiency in petitioners’ 2001

Federal income tax of $3,044 and an addition to tax of $1,444

under section 6651(a)(1) for failure to timely file a tax

return.2

       After respondent’s concessions,3 the issues for decision

are:       (1) Whether petitioners are entitled to a deduction for

travel expenses under section 162(a)(2); and, if not, (2) whether

petitioners are liable for the addition to tax under section

6651(a)(1) for failure to timely file a tax return.       The

resolution of the first issue turns on whether petitioner Paul

Deltoro’s employment in the San Francisco Bay area was temporary

versus indefinite.

                                Background

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

found.       We incorporate by reference the parties’ stipulation of

facts, supplemental stipulation of facts, and accompanying

exhibits.




       2
            All dollar amounts are rounded to the nearest dollar.
       3
        Respondent concedes that petitioners are entitled to a
deduction for union dues of $6,382 and a deduction for work boots
and supplies of $250.
                                 - 3 -

     Petitioners resided in the State of California when the

petition was filed.     All references to petitioner in the singular

are to petitioner Paul Deltoro.

     By profession, petitioner is (and has been for some 35

years) a pipefitter.4    As a pipefitter, petitioner is a member of

the United Association of Journeymen and Apprentices of the

Plumbing and Pipe Fitting Industry of the United States and

Canada (UA).5   In 1976 petitioner became a member of UA Local 460

in Bakersfield, California, and he was a member of that local for

most of his career, specifically including 2001.6




     4
        A pipefitter (also known as a steamfitter) is a tradesman
who lays out, assembles, fabricates, maintains, and repairs
mechanical piping systems.
http://en.wikipedia.org/wiki/Pipefitter. Because such piping
systems typically operate under high pressure, metals such as
carbon steel, stainless steel, and other alloy metals are
required and the pipefitter must fuse together pipes made of such
metals through precise cutting, threading, grooving, bending, and
welding. Id.

     5
        The UA is a multicraft union whose 326,000 members are
engaged in the fabrication, installation, and servicing of
various piping systems throughout the United States and Canada.
http://www.ua.org.

     6
        In 2005 petitioner transferred his membership from UA
Local 460 to UA Local 342 and since that time has remained a
member of UA Local 342. The business office of UA Local 342 is
located in Concord, California, which city is located in Contra
Costa County and proximate to Pittsburg and Martinez, which are
also located in Contra Costa County. That county is part of the
East Bay area. See infra note 8.
                              - 4 -

     By 2000 pipefitting work in Bakersfield had become scarce.

Petitioner learned that opportunities in pipefitting abounded in

the San Francisco Bay area (the Bay area).     Petitioner seized the

opportunity and headed to the Bay area to look for work.    This

put him on travel status with UA Local 460 in Bakersfield.7

     Petitioner is exceptionally skilled as a pipefitter, having

a specialty in instrument and process controls.    He was (and

remains) willing to work in refineries.   These characteristics

made him highly desirable to contractors in the Bay area.

     In late 2000 petitioner was offered an opportunity to work

for Performance Mechanical, Inc. (PMI), of Pittsburg, California,

on a project at a refinery in the East Bay.8    This first project

with PMI lasted into January 2001, after which petitioner was

offered a position by the same foreman for PMI at a different

refinery in the East Bay.

     Upon completion of a project, union members usually sign the

“out-of-work book” at the business office of their local union

and wait to be called for another project.     Petitioner, however,


     7
        When union members are on travel status, their names are
removed from the “out-of-work book” at the business office of
their local union, thereby preventing them from being called by
their local union for assignments in its geographical territory.
     8
        The East Bay is a region of the San Francisco Bay Area
and comprises both Alameda and Contra Costa Counties. It lies on
the eastern shores of the San Francisco and San Pablo Bays.
Cities located in the East Bay include Oakland, Berkeley,
Pittsburg, Richmond, and Martinez.
http://en.wikipedia.org/wiki/East Bay_(San_Francisco_Bay_Area).
                               - 5 -

did not typically return to Bakersfield to sign the “out-of-work

book”, but waited for a call directly from the PMI foreman for an

assignment to a new project in the East Bay.9

     Throughout 2001 petitioner continued to work on various

projects for PMI at three different refineries in the East Bay.10

All of petitioner’s paychecks for 2001 were issued by PMI.

     Petitioner’s calendar and paystubs indicate that petitioner

did not work on approximately 10 weekdays during the year (not

including holidays).   During the month of March petitioner did

not work on 4 consecutive days, but was able to maintain a 40-

hour workweek by working 4 Saturdays throughout the month, a

practice that his calendar demonstrates was uncommon.   In July

petitioner was off for 3 consecutive days; however petitioner was

not off due to the end of a project, as he worked the same job

preceding and following the days off.   After 2001, and through

the time of trial, petitioner has worked mostly on projects for



     9
        Although a union pipefitter was typically offered an
assignment based on “coming to the top of” the “out-of-work
book”, i.e., becoming first on the list, an exception was
permitted if a particular specialty (such as instrument and
process controls) was involved. In addition, local union rules
permitted a “name call”, whereby a contractor wishing to retain a
particular pipefitter was entitled to “call so many individuals
for a particular job by name.” Because of his in-demand
specialty, his exceptional skill, and his strong work ethic, when
petitioner signed the “out-of-work book” he usually obtained his
assignments by “name call”.
     10
        At trial petitioner explained that in the East Bay there
are approximately five refineries within a “15-mile spread”.
                                - 6 -

PMI with a few intervening projects with other contractors in the

Bay area.

     At some point in 2002 petitioner signed the “out-of-work

book” at the business office of the local union in Bakersfield,

but after 1 month of not being able to find work he returned to

work for PMI in the East Bay.   In 2006 work became available in

the Bakersfield area, but petitioner did not return to

Bakersfield at that time.11   In addition, although petitioner’s

preference would have been to work in Bakersfield, the rate of

pay in the Bay area was the highest in the State, thereby helping

to “offset some of the living expenses that you have working away

from [your] home.”

     For many years, specifically including 2001 and all years

thereafter, petitioners have resided in Bakersfield,

approximately 5 hours south of the Bay area.   At the beginning of

the work week petitioner commuted by train or car from

Bakersfield to the East Bay and made the return trip at the end

of the work week.    During the work week petitioner stayed in the

East Bay at an apartment that he rented on a month-to-month

basis.    Petitioner incurred expenses for transportation between

Bakersfield and the East Bay, the apartment rental in the East

Bay, and meals while in the East Bay.


     11
        As noted earlier, in 2005 petitioner transferred his
membership from UA Local 460 in Bakersfield to UA Local 342 in
Concord (Contra Costa County).
                               - 7 -

      Petitioners’ 2001 Federal income tax return was dated “3-29-

07” and received by the Internal Revenue Service field office in

Bakersfield, California, on that same date.   On their return,

petitioners reported income of $99,426, of which $91,134

represented wages received by petitioner from PMI.   Petitioners

claimed a deduction for unreimbursed employee business expenses

of $18,927 reported on a Form 2106, Employee Business Expenses.

The unreimbursed employee business expenses included amounts for

union dues, work boots and supplies, and travel expenses.

      In the notice of deficiency, respondent disallowed most of

the deduction claimed by petitioners for unreimbursed employee

business expenses on their Form 2106.    Respondent also determined

that petitioners are liable for an addition to tax for failure to

timely file a tax return.

                            Discussion

A.   Section 162 Travel Expenses

      As a general rule, personal living expenses are

nondeductible.   Sec. 262; secs. 1.162-2(a), 1.262-1(b)(5), Income

Tax Regs.   However, section 162(a)(2) allows a taxpayer to deduct

ordinary and necessary travel expenses (including meals and

lodging) paid or incurred while away from home in pursuit of a

trade or business.   Commissioner v. Flowers, 326 U.S. 465, 470

(1946).
                                 - 8 -

     The reference to “home” in section 162(a)(2) means the

taxpayer’s “tax home”.12   Mitchell v. Commissioner, 74 T.C. 578,

581 (1980); Foote v. Commissioner, 67 T.C. 1, 4 (1976); Kroll v.

Commissioner, 49 T.C. 557, 561-562 (1968).     As a general rule, a

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

where his personal residence is located, if different from his

principal place of employment.     Mitchell v. Commissioner, supra

at 581; Kroll v. Commissioner, supra at 561-562.     If a taxpayer

for personal reasons chooses to reside in a different location

than that of his principal place of employment, his residence is

not recognized as his home for tax purposes.     Commissioner v.

Flowers, supra; Jones v. Commissioner, 54 T.C. 734, 740 (1970),

affd. 444 F.2d 508 (5th Cir. 1971).

     An exception to the general rule exists where a taxpayer

accepts temporary, rather than indefinite, employment away from

his personal residence; in that case, the taxpayer’s personal

residence may be his tax home.     Peurifoy v. Commissioner, 358

U.S. 59, 60 (1958).

     Employment is temporary if its termination can be foreseen

within a fixed or reasonably short period of time.     Mitchell v.



     12
        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 -

Commissioner, supra at 581; Stricker v. Commissioner, 54 T.C.

355, 361 (1970), affd. per curiam 438 F.2d 1216 (6th Cir. 1971).

Employment that merely lacks permanence is indefinite unless

termination is foreseeable within a short period of time.

Norwood v. Commissioner, 66 T.C. 467, 470 (1976); Kroll v.

Commissioner, supra at 562.   Section 162(a) further provides that

the taxpayer shall not be treated as being temporarily away from

home during any period of employment if such period exceeds 1

year.

     This Court has held that a taxpayer who is kept away from

his family residence because of his work at a series of temporary

jobs in disparate geographical areas is considered away from home

while so employed.   Dean v. Commissioner, 54 T.C. 663 (1970).

However, a taxpayer who works in the same area, and no other, for

a protracted length of time is not considered away from home.

Curtis v. Commissioner, T.C. Memo. 1970-299 (taxpayer worked as a

pipefitter on a variety of different jobs throughout the year,

but all jobs were within 22-1/2 miles of Dolton, Illinois,

whereas taxpayer claimed his tax home was Kerrville, Texas),

affd. 449 F.2d 225 (5th Cir. 1971).

     Petitioner contends that his employment in the Bay area was

temporary and therefore that his tax home was in Bakersfield, as

that was where he maintained a home and resided while he was not

living and working in the Bay area.    Respondent argues that
                              - 10 -

petitioner’s employment in the Bay area was indefinite and that

his tax home was not his residence in Bakersfield but rather the

Bay area, which was the vicinity of his employment.     For the

following reasons, we agree with respondent.

     In 2000 petitioner headed to the Bay area after learning

about an abundance of work opportunities for pipefitters in that

region.   Petitioner began working on a project for PMI in late

2000.   That first position with PMI lasted into early 2001, after

which time petitioner was consistently offered positions on

projects with PMI in the Bay area.     These projects lasted

throughout 2001, and petitioner has continued to work on projects

for PMI in the Bay area through the time of trial.     When a

project with PMI was finished, petitioner would not typically

sign the “out-of-work book” at the business office of the local

union in Concord but rather would wait for a call from PMI for an

assignment to a new project in the Bay area.     Although petitioner

stated that he worked on a few intervening projects with other

contractors in years after 2001, those projects were also in the

Bay area.

     Petitioner stated that his preference would have been to

work in Bakersfield; however, there were no opportunities there

in petitioner’s specialty, and even when an opportunity for work

in “general” pipefitting arose, petitioner did not return to

Bakersfield.   In addition, when petitioner was on travel status
                              - 11 -

away from the local union in Bakersfield, his name was removed

from the “out-of-work book”, such that he could not be selected

for work there while “traveling”.

     Petitioner stated that he signed the “out-of-work book” at

the business office of the local union in Bakersfield at some

point in 2002.   However, after a month of not being able to

secure work, he headed back to the East Bay to again work for

PMI.13

     Finally, petitioner stated that the rate of pay in the Bay

area was the highest in the State and that it was worth his while

to travel to the East Bay.   Indeed, petitioner testified that “If

I had the chance to work, you know, in Modesto as opposed to the

Bay area, I would probably take the Bay area because the dollar

difference would help pay some of those expenses.”

     For the foregoing reasons, we find that petitioner’s

employment in the Bay area was indefinite, and not temporary.    It

was personal choice, and not business exigencies, that dictated

petitioner’s decision to maintain his residence in Bakersfield

and incur expenses related to his employment in the Bay area.

See Commissioner v. Flowers, 326 U.S. at 474.




     13
        Petitioner’s commitment to the Bay area, and to the East
Bay in particular, is demonstrated by the fact that in 2005 he
transferred his membership from the UA local in Bakersfield to
the UA local in Contra Costa County.
                               - 12 -

      In conclusion, because petitioner was not “away from home”

within the meaning of section 162(a)(2), he is not entitled to a

deduction for expenses incurred in what was essentially a long-

distance commute to work.   Accordingly, we sustain respondent’s

determination on this issue.

B.   Section 6651(a)(1) Addition to Tax

      Section 6651(a)(1) imposes an addition to tax for failure to

file a return by its due date.   The addition equals 5 percent for

each month or fraction thereof that the return is late, not to

exceed 25 percent.

      In the absence of an extension, the last date for

petitioners to have timely filed their Federal income tax return

for 2001 was Monday, April 15, 2002.      See sec. 6072(a).

Respondent has proven, and has therefore discharged his burden of

production under section 7491(c), that petitioners’ 2001 Federal

income tax return was not received and filed until March 29,

2007, more than 5 years after its due date.

      “A failure to file a tax return on the date prescribed leads

to a mandatory penalty unless the taxpayer shows that such

failure was due to reasonable cause and not due to willful

neglect.”   McMahan v. Commissioner, 114 F.3d 366, 368 (2d Cir.

1997), affg. T.C. Memo. 1995-547.   A showing of reasonable cause

requires a taxpayer to show that he or she exercised “ordinary

business care and prudence” but was nevertheless unable to file
                               - 13 -

the return within the prescribed time.    United States v. Boyle,

469 U.S. 241, 246 (1985); sec. 301.6651-1(c)(1), Proced. & Admin.

Regs.

     Petitioners have not offered any persuasive evidence to

establish that the late filing of their return was due to

reasonable cause and not due to willful neglect.   Accordingly, we

hold that petitioners are liable for the addition to tax under

section 6651(a)(1).

                           Conclusion

     We have considered all of the other arguments made by

petitioners and, to the extent that we have not specifically

addressed those arguments, we conclude that they do not support a

result contrary to that reached herein.

     To reflect our disposition of the disputed issues, as well

as respondent’s concessions,


                                          Decision will be entered

                                    under Rule 155.
