Wilbert v. Commissioner

553 F.3d 544 (7th Cir. 2009)

 

RULE:

The exigencies of business rather than the personal conveniences and necessities of the traveler must be the motivating factors in the decision to travel for purposes of 26 U.S.C.S. § 162(a)(2).

FACTS:

Following a layoff by the airline, Wilbert, a taxpayer, exercised his right to bump, or take the job of, less senior employees on three occasions, working for short periods in three different cities. He was subsequently rehired to fill an interim position for several months in Alaska until he was laid off. Wilbert sought to deduct his living expenses he incurred while working away from home. The tax court disallowed the deduction under 26 U.S.C.S. §§ 162(a)(2)262(a) and assessed a deficiency. 

ISSUE:

Can an employee who uses "bumping" rights to avoid or postpone losing his job deduct the living expenses that he incurs when he finds himself working far from home as a result of exercising those rights?

ANSWER:

No.

CONCLUSION:

The Court held that that unless Wilbert had a business rather than a personal reason to be living in two places, he could not deduct his traveling expenses if he decided not to move. The exigencies of business rather than the personal conveniences and necessities of the taxpayer had to be the motivating factors in the decision to travel in order for the deduction to apply. The Court also held that the fact that Wilbert had a real estate business where his home was located was of no consequence because it was not his main business.

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