William Smith v. Commissioner

During the year at issue, Mr. Smith was a licensed journeyman electrician who owned a trailer home in Clifton, Colorado, as well as a rental property in nearby Grand Junction, Colorado. Mr. Smith had lived in Clifton since at least 2007 with his 2013 tax return showing that he claimed a home mortgage interest deduction of $6,802 for that year. Mr. Smith voted, registered his vehicles, received his mail, spent time with friends, and rafted whitewater rapids in the greater Grand Junction area.

Mr. Smith 's most significant tie to the Grand Junction area was his home local union, Local 969 of the International Brotherhood of Electrical Workers (IBEW). His membership in his home local union gave him priority status for jobs in and around Grand Junction. In December 2012 his status in Local 969 allowed him to work for three weeks on a job within its territory.

In early 2013 work had dried up within Local 969's territory. Mr. Smith therefore elected to travel for union jobs that he was able to obtain through other IBEW local unions. By its nature, employment as a traveling union member was a peripatetic life, as traveling union members were the first to go when an employer reduced its union workforce .

During 2013 Mr. Smith worked jobs through Local 415 in Cheyenne, Wyoming, Local 68 in Denver, Colorado, and Local 113 in Colorado Springs, Colorado.

From January 24, 2013, until a reduction in force on February 1, 2013, Mr. Smith worked for Simpson Electric Co. at a refinery project in Cheyenne, Wyoming. During this time Mr. Smith worked 92 hours and received $3,090 in gross wages. Local 415 required him to pay a 6% union working dues assessment. The governing collective bargaining agreement did not provide for reimbursement of fuel, lodging, or meals.

After being laid off, Mr. Smith remained in Cheyenne because he had heard that another job might be forthcoming. On February 5, 2013, he was dispatched out of Local 415 to work for the Electrical Corporation of America, Inc., at its Laramie River Power Station in Wheatland, Wyoming. Mr. Smith stayed on this project until he quit on May 15, 20 13, following a plant explosion.

At Laramie River Power Station Mr. Smith worked 151.5 hours in February, 288 hours in March, 280.5 hours in April, and 160 hours in May. He received subsistence of $30 per day and earned gross wages of $32,317.3 Local 415 again required Mr. Smith to pay a 6% union working dues assessment. [pg. 847]

During parts of February and March 2013 Mr. Smith stayed at the Wyoming Motel in Wheatland, Wyoming. During April 2013 Mr. Smith moved to a Motel 6 in Wheatland. Mr. Smith shared his room and the expenses at the Motel 6 with a fellow union member.

After quitting the Laramie River Project in May 2013 Mr. Smith was unemployed until August 15, 2013. During his period of unemployment, Mr. Smith spent time in the Grand Junction area and visited several other states.

In August 2013 Mr. Smith obtained employment with Sturgeon Electric Co. (Sturgeon) through Local 68 in Denver. Over the remainder of the year, Sturgeon sent him to work on four separate projects in different parts of Colorado. First, he worked from August 15 through September 10, 2013, at a project involving a Verizon data center in Englewood, Colorado Next, he worked at a children's hospital in Highlands Ranch, Colorado, from September 11 to October 20, 2013. He then worked from October 21 to October 27, 2013, at a gold mine in Victor, Colorado (within the jurisdiction of Local 113). Finally, he worked at an Air Force base in Aurora, Colorado, from October 28, 2013, until the end of the year.

All told, Mr. Smith worked 832 hours during his time with Sturgeon, receiving gross wages of $29,665, from which $1,456 in union dues was deducted. Local 68's collective bargaining agreement did not provide for a provision for reimbursement of travel expenses such as fuel, lodging, or meals. While working at the gold mine Mr. Smith received a one-time per diem of $500, consistent with Local 113's collective bargaining agreement.4 Sturgeon included this per diem amount in Mr. Smith 's gross wages.

Mr. Smith timely filed his 2013 Federal income tax return, reporting an adjusted gross income (AGI) of $62,019. On his Schedule A, Itemized Deductions, Mr. Smith reported unreimbursed employee business expenses of $39,392, tax preparation fees of $125, and other expenses of $6,025. After applying the statutory limitation, the deductible amount was $44,302. 5

Mr. Smith attached Form 2106- EZ, Employee Business Expenses, to his tax return, which elaborated on these amounts. He explained that the unreimbursed employee business expenses included lodging of $15,120, meals of $3,480, and a vehicle of $18,594 using the then-applicable mileage rate. He further reported an additional unreimbursed employee business expense of $2,198 for union and professional dues.

Can you provide the solution for the case and 3 similar cases from the IRS website?