An engineer working on a remote, federal project in the Nevada desert drove 160 miles to and from work each day – three hours behind the wheel.
William Cor, who worked for a government contractor, figured Uncle Sam would help pay for the abnormally long commute. So, he wrote off $150 for each day’s travel from his federal tax return, claiming it as an unreimbursed business expense.
He discovered the hard way that, from a tax standpoint, commuting doesn’t pay.
The U.S. Tax Court not only rejected Cor’s deduction for commuting but also upheld an Internal Revenue Service penalty for negligent tax reporting. Almost all of the $29,457 in unreimbursed business expenses he claimed on his 2010 tax return was due to commuting.
Cor, who acted as his own attorney, didn’t help his case much. He didn’t show any mileage or expense logs. He merely charged $50 an hour for his commute, arguing that the government benefited from his unpaid time on the road. The Tax Court judge was unimpressed. Cor’s arguments simply “are not persuasive,” the judge said.
Issues involving Schedule C business expenses and unsubstantiated charitable deductions also contributed to the penalty on his joint return. You can look up the ruling for William L. Cor and Jana K. Cor v. Commissioner of Internal Revenue at the U.S. Tax Court’s Web site. It’s TC Memorandum Opinion 2013-240, dated in October 22, 2013.
Whether it’s two miles or 200, across town or across the desert, a worker’s commute is not deductible under IRS codes. Exceptions are very narrow.
Call us at EricJohn Ltd. to put those business expenses in perspective.