The Supreme Court has declined to review a decision by the Third Circuit Court of Appeals that denied an independent building contractor/property renovator's deduction claims for transportation and other auto-related expenses involving travel between his residence and various worksites. The Third Circuit, affirming the Tax Court, found that the expenses were nondeductible commuting costs. (Bogue, (CA 3 6/3/2013) 111 AFTR 2d 2013-2179, cert denied 3/31/2014)
During 2005, the contractor worked on residential property renovations at five work locations (worksites) were 20.1, 15.7, 15, 14.7, and 4 miles, respectively, from his residence. He worked at each of the worksites for a number of months and then, when the project at that worksite was finished, moved to another worksite.
The Tax Court denied his deductions for transportation and other auto-related expenses involving travel between his residence and various worksites. It found that the expenses all came under the general nondeductible personal expense rule for commuting costs. The Tax Court rejected his arguments that the expenses were deductible under all three of the exceptions under Rev Rul 99-7:
- The temporary distant worksite exception was unavailable because the worksites at issue, although away from Bogue's home, were within the normal distance/areas where he normally worked.
- The regular work location exception was also unavailable since the only locations at which he worked during the years at issue were temporary worksites and he showed no other, regular work locations. The Tax Court rejected his contention that his storage shed, his car, the bank where he was a customer, and various building supply stores should be considered regular work locations.
- The Court denied the expenses under the home office exception for lack of proof that he actually used an office in his residence exclusively for business.
Further, while costs of transporting tools to and from worksites, travel to supply stores, or travel between worksites themselves might qualify as deductible transportation or travel, they were denied because Bogue failed to substantiate them.