Henry L. Boone and Nancy M. Boone, Plaintiffs-appellees, v. United States of America, Defendant-appellant, 482 F.2d 417 (5th Cir. 1973)

The United States appeals from a directed jury verdict for the taxpayer in a civil income tax refund suit. On facts mostly stipulated and none in dispute, both the plaintiffs-taxpayers and wife (Boone or taxpayer) and the United States moved for directed verdict at the close of the evidence. The trial judge denied the government's motion and granted that of the taxpayer. We reverse and direct that judgment be entered for the United States.

The taxable year involved was 1966. During the time in question, taxpayer, a pipe fitter and a member of Local 568, Plumbers and Steam Fitters Union, resided in Pascagoula, Mississippi. He worked in and around Pascagoula when work there was assigned by the Union Hall, but would go wherever there was employment. When he was free to work, he would list his name at the Union Hall and wait for a call. When his name came up he would report to the jobsite and continue to go directly there until the job was finished, when he would again report to the Union hiring hall and again wait for a call for employment at a new jobsite.

No work was available in or near Pascagoula in May of 1965, and Boone was referred to work with the Koppers Company at Picayune, Mississippi in May 1965. He worked there until August 27, 1966, first as pipe fitter and later promoted to welder inspector. During this 15 or 16 months he commuted to work every working day by automobile from Pascagoula to Picayune and return, a round trip of about 160 miles. He did this instead of moving closer to the jobsite to avoid disturbing his family and having to change his children's public school. The employment at Picayune was indefinite. Boone was never told how long the Koppers job was expected to last and did not learn of his termination until an hour before it occurred. Termination was based on the fact that his job was finished and Koppers no longer needed his services.

Taxpayer claimed his daily travel expense as a deduction on his 1966 income tax return. The Commissioner disallowed the deduction on the ground that it was a non-deductible personal expense and assessed additional taxes of $494.11. Boone paid the assessment with interest, and when his claim for refund was denied, timely filed refund suit in the court below. The district court by granting a directed verdict for the taxpayer, overruled the Commissioner's determination.

Under Section 161 of the Internal Revenue Code of 1954, (Title 26 U.S.C. § 161), a generic section, a taxpayer is entitled to take various itemized deductions in reducing gross income to taxable income.¹  Included is the deduction allowed under Section 162(a) of the 1954 code for ordinary and necessary expenses paid or incurred in carrying on any trade or business.²  But the allowance of such a deduction is "subject to the exceptions provided in * * * [sections 261 et seq.]" Treasury Regulations on Income Tax (1954 Code), Sec. 1.161-1. One of these superseding provisions which affect every relevant deduction section is Sec. 262, which disallows deductions for "personal, living, or family expenses." The cost of daily travel from one's residence to work and return is such a non-deductible personal expenditure.³  An exception to this well established rule, which the district judge appeared to believe applicable to this case, takes effect when the taxpayer's employment is "temporary" rather than "indefinite" or "indeterminate". Peurifoy v. Commissioner of Internal Revenue, 1958, 358 U.S. 59, 79 S. Ct. 104, 3 L. Ed. 2d 30 aff'g 254 F.2d 483 (4 Cir. 1957); Claunch v. Commissioner of Internal Revenue, 5 Cir. 1959, 264 F.2d 309; Coburn v. Commissioner of Internal Revenue, 2 Cir. 1943, 138 F.2d 763 (under Revenue Act, 1938 Sec. 23(e), Int.Rev.Code Sec. 23(e)). A temporary employment is one which is foreseeably for a short period of time or for a fixed duration. Stricker v. Commissioner of Internal Revenue, 6 Cir. 1971, 438 F.2d 1216; Claunch v. Commissioner of Internal Revenue, 5 Cir. 1969, supra; Rev.Rul. 61-95, 1961-1 Cumulative Bulletin 749. In contrast, an indefinite or indeterminate employment is one where the prospect is that the work will continue for an indeterminate and substantially long period of time. Cockrell v. Commissioner of Internal Revenue, 8 Cir. 1963, 321 F.2d 504; Wright v. Hartsell, 9 Cir. 1962, 305 F.2d 221.⁴  We think the district court misapplied the law to the uncontroverted facts in evidence and directed a verdict for the wrong party.

When the undisputed facts are examined in the light of the foregoing cases it becomes obvious that there was no question presented upon which a jury decision was required. Only a judge's decision applying the law to the facts was necessary. It is manifest that Boone's employment in Picayune was indefinite rather than temporary:

-It was of such a nature that it could be terminated at any time;

-He had no way of knowing how long it would last when he was hired;

-He was actually employed for over 15 months, well over the one-year "usual line of demarcation between temporary and non-temporary employment," Rev.Rul. 60-189, supra, Note 4;

-According to the taxpayer's testimony his commuting expenses were incurred solely for the convenience of his family; he decided to establish a residence and not move his children about so they could receive an uninterrupted and better education;⁵  and -The indefinite nature of the employment was further indicated by a promotion from pipe fitter to welder inspector within three months of his initial employment, increasing his chances of working until the job ended, as opposed to termination upon the first reduction in work force.⁶ 

This is not the usual case appropriate for submission to a jury because some of the evidentiary facts, even though undisputed, point to one illation and some to another. It was not even a situation where differing inferences may be drawn from the same facts. Here all the relevant facts led to a single conclusion: Boone's employment was non-temporary, it was indefinite, and the taxpayer's expenses of going to and from the jobsite daily did not qualify for the ordinary and necessary business expense deduction claimed under Section 162(a).

The motion for directed verdict of the United States was due to be granted.⁷ 

The judgment appealed from is reversed, with directions to the district court to enter judgment for the United States.

Reversed.