Appeal from the United States District Court for the Eastern District of Wisconsin. No. 79 C 925 -- Myron L. Gordon, Judge.
Before Sprecher, Circuit Judge, Fairchild, Senior Circuit Judge, and Ackerman, District Judge.*fn*
This is a suit for a refund of $1,042.46 in federal income taxes alleged to have been erroneously assessed against the taxpayer for the tax years 1972 and 1973. The district court granted summary judgment for the government, holding that the taxpayer was not entitled to deduct as ordinary and necessary business expenses his daily travel expenses incurred in commuting between his residence and his place of employment. We affirm.
The taxpayer, Donald P. Kasun,*fn1 is a heat and frost insulator who lives in Hales Corners, Wisconsin. He and his family have always lived in the Milwaukee area. Since 1947, Kasun has been a member of Local 19 of the International Association of Heat and Frost Insulation and Asbestos Workers, which is located in Milwaukee and has jurisdiction over the southern half of Wisconsin. Between 1947 and 1971, Kasun never worked outside the area of his local union. In late 1971, however, there were no jobs for heat and frost insulators within the jurisdiction of Local 19. From other union members, Kasun learned of work available at the construction site of a nuclear power plant at Zion, Illinois, within the jurisdiction of Chicago Local Union 17. He began working at Zion in November, 1971.
While he worked at the Zion site, Kasun was required to pay dues to Local 17 as well as to his home local, Local 19. In addition, a Local 19 bylaw required any member working outside the territory to return if local work became available. Failure to return was punishable by a fine and expulsion from the union.
All parties agree that Kasun intended to work at Zion only until he was able to obtain work within his local union's jurisdiction. When Kasun began work on the Zion project, however, he was not told by the employer how long the job would last, nor did he know when work would become available within the jurisdiction of Local 19. Kasun worked at Zion for twenty months, and then quit to take a job within his local union's jurisdiction.
During the period he worked at Zion, Kasun had to drive a 110-mile round-trip each day between his home and the construction site. He deducted the expenses so incurred on his tax returns for 1972 and 1973, claiming refunds for those years of $596.36 and $447.10, respectively. The Commissioner disallowed those claims, and Kasun brought suit for a refund. The district court granted the government's motion for summary judgment, holding that the taxpayer's daily expenses for traveling between his residence and his work place were nondeductible, personal commuting expenses.
Section 162(a) of the Internal Revenue Code, 26 U.S.C. § 162(a), allows a taxpayer to deduct ordinary and necessary business expenses. Personal, living, or family expenses, however, are not deductible. 26 U.S.C. § 262. In Commissioner v. Flowers, 326 U.S. 465, 66 S. Ct. 250, 90 L. Ed. 203 (1946), the Supreme Court held that travel expenses are deductible under § 162(a) only if (1) the expense is reasonable and necessary, (2) the expense is incurred while away from home, and (3) the expense is incurred in the pursuit of business. Id. at 470, 66 S. Ct. at 252.
It is well-settled that the cost of daily commuting is a nondeductible, personal expense under § 262. See, e.g., Commissioner v. Flowers, 326 U.S. 465, 473, 66 S. Ct. 250, 253, 90 L. Ed. 203 (1946); Boone v. United States, 482 F.2d 417, 419 (5th Cir. 1973); Sanders v. Commissioner, 439 F.2d 296, 297 (9th Cir.), cert. denied, 404 U.S. 864, 92 S. Ct. 55, 30 L. Ed. 2d 108 (1971). This is based on the assumption that a person will choose to live near the work place. If, for personal reasons, one chooses to live far from the place of employment, the resulting travel costs are nondeductible, personal expenses. For travel expenses to be deductible, " "(t)he job, not the taxpayer's pattern of living, must require the travel.' " Commissioner v. Peurifoy, 254 F.2d 483, 486 (4th Cir. 1957), aff'd, 358 U.S. 59, 79 S. Ct. 104, 3 L. Ed. 2d 30 (1958) (quoting Carragan v. Commissioner, 197 F.2d 246, 249 (2d Cir. 1952)).
An exception to the general rule against the deductibility of commuting expenses allows the taxpayer to deduct the cost of traveling to a job that is temporary, as opposed to indefinite, in duration. See, e.g., Peurifoy v. Commissioner, 358 U.S. 59, 60, 79 S. Ct. 104, 105, 3 L. Ed. 2d 30 (1958); Boone v. United States, 482 F.2d 417, 419 (5th Cir. 1973); Sanders v. Commissioner, 439 F.2d 296, 298 (9th Cir.), cert. denied, 404 U.S. 864, 92 S. Ct. 55, 30 L. Ed. 2d 108 (1971). While it is assumed that a person will live near the place of employment, it is not reasonable to expect people to move to a distant location when a job is foreseeably of limited duration. If, on the other hand, the prospect is that the work will continue for an indefinite or substantially long period of time, the travel expenses are not deductible.*fn2 See Boone v. United States, 482 F.2d 417, 419 (5th Cir. 1973).
Determination of whether a job is temporary or indefinite is a factual question. Peurifoy v. Commissioner, 358 U.S. 59, 61, 79 S. Ct. 104, 105, 3 L. Ed. 2d 30 (1958). The court must examine all of the circumstances of the case before reaching its conclusion. Frederick v. United States, 603 F.2d 1292, 1296 (8th Cir. 1979). When reviewing the facts, the court must bear in mind that employment which was temporary may become indefinite if it extends beyond the short term. Also, employment which merely lacks permanence is indefinite unless termination is foreseeable within a short period of time. See Boone v. United States, 482 F.2d 417, 419 n.4 (5th Cir. 1973).
The taxpayer here, however, has invited us to adopt a different view of the "temporary-indefinite" test than has been taken by most courts.*fn3 Kasun argues that, rather than focusing on the temporary or indefinite nature of the job itself, we should consider whether, under the circumstances, it was reasonable to expect him to move closer to the job at Zion. See Appellant's Brief at 9. We decline to adopt this analysis. As the Eighth Circuit noted in rejecting a similar argument, the results of the "temporary-indefinite" test and of the "reasonableness" test frequently will be the same. Frederick v. United States, 603 F.2d 1292, 1295 (8th Cir. 1979). The "reasonableness" test, however, ...