Ruling on the deductibility of commuting expenses disagrees with Walker but expands the unanswered questions.

• Author: Berk, Wendy S.

Rev. Rul. 94-47 clarifies three situations in which a taxpayer's transportation expenses from his residence to a work location are deductible. The general rule is that commuting expenses from home to the work place are "personal" and, therefore, nondeductible. However, while this ruling lists three exceptions to the general rule, the Service explicitly restricts the exception raised in the recent Walker case, 101 TC 537 (1993), by indirectly applying the Soliman criteria for home offices.

Rev. Rul. 94-47 summarizes earlier rulings that addressed the deductibility of commuting expenses. First mentioned is Rev. Rul. 55-109, which stated that the cost of going from one business location to another business location is not "personal" but instead a deductible "ordinary and necessary" business expense. Rev. Rul. 94-47 does not change this result, unless one of the business locations is also the taxpayer's home.

Commuting from home to a work location could also qualify as a business expense in certain circumstances. Rev. Rul. 190 involved construction workers who lived and worked in one metropolitan area, but were scheduled to work outside this metropolitan area for a temporary project. The costs incurred for traveling between the workers' residences to the temporary work site outside the metropolitan area was a deductible business expense. Rev. Rul. 94-47 incorporates this rule.

Rev. Rul. 90-23 clarified the distinction between a "regular" and "temporary" place of business. A regular place of business is "any location at which the taxpayer works or performs services on a regular basis." A temporary place of business if "any location at which the taxpayer performs services on an irregular or short-term (i.e., generally a matte of days or weeks) basis."

Then came Walker. Walker involved a logger who contracted to cut and trim logs. He had five sales in 1986, seven sales in 1987 and eight sales in 1988, working at two to five general job sites per sale. Additionally, he worked seven hours per week in a workshop adjacent to his residence repairing and maintaining his tools. Walker deducted all the expenses attributable to two vehicles he used in his logging business. The Service allowed only 60% of these expenses, arguing that 40% were attributed to the transportation costs from his residence to the first job site and from the last job site back home. First, the court cited the case law on this issue, concluding that if a taxpayer's residence is not...