SCOTUS Reports

Tag: Crowther v. Commissioner

  • Crowther v. Commissioner, 28 T.C. 1293 (1957): Deductibility of Commuting Expenses and Business Expenses

    Crowther v. Commissioner, 28 T.C. 1293 (1957)

    Commuting expenses are not deductible as business expenses, even if the taxpayer uses the vehicle to transport tools and equipment for their work.

    Summary

    The case concerns a logger, Crowther, who drove his car and jeep between his home and various timber “layouts” where he worked. He also transported tools and equipment in the vehicles. The Tax Court addressed whether Crowther could deduct the expenses related to the use of his vehicles. The Court determined that to the extent the costs represented commuting expenses, they were personal and not deductible, but that the expenses attributable to transporting tools and equipment were deductible. The court also addressed other claimed deductions, like the fee for preparing income tax returns and medical expenses, finding for the taxpayer on some of the deductions claimed.

    Facts

    Charles Crowther worked as a logger, traveling to various timber layouts to cut trees. His work sites were often 40 miles or more from his home, and no public transportation was available. He used his car and later a jeep for transportation, carrying tools and equipment. He deducted expenses related to his vehicle use as business expenses. The Commissioner disallowed a portion of these deductions, claiming they were personal commuting expenses. Crowther’s wife was joined in the case because they filed a joint return. The petitioner also had other business deductions at issue, and claimed some medical expenses.

    Procedural History

    The Commissioner of Internal Revenue determined deficiencies in Crowther’s income tax for 1951 and 1954, disallowing certain deductions. Crowther petitioned the United States Tax Court to challenge the Commissioner’s determinations. The Tax Court reviewed the facts and legal arguments to decide on the deductibility of the expenses.

    Issue(s)

    1. Whether the costs of operating automobiles and a jeep used by a logger for commuting and transporting tools and equipment are deductible as business expenses.

    2. Whether a fee paid for the preparation of a prior year’s income tax return is deductible in the subsequent year.

    3. Whether a portion of a deduction taken for medical expenses was properly disallowed.

    Holding

    1. No, because to the extent the expenses represent commuting, they are personal expenses and not deductible. Yes, because to the extent the expenses represent the cost of transporting tools and equipment, they are ordinary and necessary business expenses and deductible.

    2. Yes, because the fee paid for the preparation of the prior year’s tax return is deductible in the subsequent year.

    3. No, because Crowther did not submit any evidence to rebut the Commissioner’s determination.

    Court’s Reasoning

    The court focused on the established principle that commuting expenses are generally not deductible. The court acknowledged that Crowther used his vehicles for both commuting and transporting tools. It reasoned that the commuting portion of the expenses was personal, regardless of the distance traveled or the lack of public transportation. “The rule is the same regardless of the distance traveled between home and the place of business… The fact that public transportation is not available does not require that an exception be made to the rule.” The court found that the portion of expenses related to transporting tools was deductible as a business expense. It also sided with the petitioner with regard to his claimed deduction for the fee paid for preparation of his income tax return, and disallowed the claimed medical expense because the petitioner failed to submit evidence.

    Practical Implications

    This case reinforces the strict rule regarding commuting expenses in tax law. It clarifies that taxpayers who use vehicles for both personal commuting and business purposes must carefully allocate expenses to determine what is deductible. Legal practitioners should advise clients to keep detailed records to support the business use of vehicles, such as mileage logs, to justify deductions for the transportation of tools or equipment. The case suggests that even if the taxpayer is required to travel long distances or lacks other transportation options, the commuting portion is still considered a personal expense. This distinction is vital in similar cases where taxpayers may argue for deductibility based on the nature of their work or the lack of alternatives.

  • Crowther v. Commissioner, T.C. Memo. 1957-169: Commuting Expenses Are Not Deductible Business Expenses

    T.C. Memo. 1957-169

    Commuting expenses, even when driving is necessitated by the nature of the employment and lack of public transportation, are generally considered personal expenses and are not deductible as ordinary and necessary business expenses.

    Summary

    The Tax Court held that a timber faller, Crowther, could not deduct the full expenses for his vehicles used to travel between his home in Fort Bragg and remote timberland work sites. Crowther argued these were necessary business expenses because his work locations were distant, lacked public transport and on-site housing, and he transported tools. The court affirmed the IRS’s partial deduction, distinguishing between commuting and business use. It reiterated the longstanding principle that commuting costs are personal, regardless of distance or necessity, unless directly related to business activities beyond mere transportation to work. The court allowed deductions for the portion of vehicle use demonstrably for transporting tools and equipment, but not for commuting itself.

    Facts

    1. Crowther, a timber faller, lived with his family in Fort Bragg, California.

    2. He worked at various timberland “layouts” located 40 or more miles from his home.

    3. No living accommodations were available for Crowther and his family at or near these layouts.

    4. Public transportation was not available between Fort Bragg and the layouts.

    5. Crowther’s employers did not provide transportation or dictate where he should live or how he should commute.

    6. Crowther used his automobiles and jeep to travel between his home and the layouts, also transporting tools and equipment for his work.

    7. Crowther deducted the full expenses for his vehicles as ordinary and necessary business expenses.

    8. The Commissioner allowed only a portion of these deductions, distinguishing between commuting and business use.

    Procedural History

    1. The Commissioner of Internal Revenue disallowed a portion of Crowther’s deductions for automobile, jeep, and chainsaw expenses.

    2. Crowther petitioned the Tax Court, contesting the Commissioner’s determination.

    3. The Tax Court reviewed the case to determine the deductibility of these expenses as ordinary and necessary business expenses.

    Issue(s)

    1. Whether the expenses for automobiles, jeep, and chainsaw, and their use, incurred by Crowther to travel between his home and remote work locations, are fully deductible as ordinary and necessary business expenses?

    2. Whether commuting expenses are deductible business expenses when necessitated by employment location and lack of alternative transportation and housing?

    Holding

    1. No, because to the extent the automobile and jeep expenses represented commuting expenses, they are considered personal expenses and are not fully deductible as ordinary and necessary business expenses.

    2. No, because commuting expenses are inherently personal, regardless of the circumstances making car use necessary or the unavailability of public transportation or local housing.

    Court’s Reasoning

    1. The court relied on established precedent that “commuting expenses, or expenses incurred in traveling from home to one’s place of business or employment, are not deductible as business expenses.” Citing Frank H. Sullivan, 1 B. T. A. 93; Mort L. Bixler, 5 B. T. A. 1181; Charles H. Sachs, 6 B. T. A. 68; Abraham W. Ast, 9 B. T. A. 694; Regs. 111, sec. 29.23(a)-2.

    2. The court emphasized that the rule against deducting commuting expenses applies regardless of distance (citing Commissioner v. Flowers, 326 U. S. 465) or the necessity of a particular mode of transport (citing John C. Bruton, 9 T. C. 882).

    3. The unavailability of public transportation or local housing does not create an exception to the commuting expense rule. The court reasoned, “The fact that public transportation is not available does not require that an exception be made to the rule, since if public transportation were available the fares paid for its use clearly would not be deductible. Consequently, automobile and jeep expenses incurred in lieu of such fares are not entitled to any different treatment, irrespective of whether public transportation is available or not. Nor do we think that the fact that living accommodations for Crow-ther and his family were not available at or near the layouts provides any stronger basis for an exception to the rule than the fact that public transportation was not available between his home and the layouts.”

    4. The court distinguished cases cited by petitioners involving temporary travel away from home or unique professional circumstances, finding them inapplicable to standard commuting.

    5. The court acknowledged that Crowther used his vehicles for both commuting and business purposes (transporting tools). It upheld the Commissioner’s partial allowance for business use, and in some instances increased the allowed amounts based on the record.

    Practical Implications

    1. This case reinforces the general rule that commuting expenses are not deductible, even when work locations are remote and require personal vehicle use due to the nature of the job.

    2. It highlights the importance of distinguishing between commuting and actual business use of a vehicle. Taxpayers can deduct expenses related to transporting tools or equipment if they can substantiate this business use separately from commuting.

    3. Legal professionals should advise clients that the lack of public transportation or housing near a work site does not automatically convert commuting expenses into deductible business expenses.

    4. This ruling continues to be relevant in modern tax law, as the IRS and courts consistently apply the principle that commuting is a personal expense. Later cases continue to cite Crowther for this established principle, emphasizing that the ‘necessity’ of driving due to job location does not transform personal commuting into deductible business travel.