## Facts

- Glenn Patrick Bogue, a self-employed independent contractor, lived in Cherry Hill, New Jersey, in a home owned by his fiancée, which the court treated as his residence.
- In 2005–2006, he performed renovation work at multiple residential worksites in Pennsylvania and New Jersey, each located about 4 to 20 miles from his residence; he worked at each site for months before moving to the next.
- On his 2005 and 2006 returns, he claimed Schedule C deductions including (i) transportation costs (mileage, insurance, rental car, tolls) for travel between his residence and worksites, (ii) depreciation for a Ford Explorer and tools (and related property such as a toolshed), and (iii) legal expenses allegedly connected to his contracting activity.
- He asserted that he maintained a home office at his residence that was his principal place of business, making travel to worksites deductible business travel.
- The IRS issued a notice of deficiency for 2005 and 2006, disallowing various deductions and imposing accuracy-related penalties under I.R.C. § 6662(a); after mutual concessions, four categories of issues remained for decision.

## Issues

1. Whether transportation expenses between Bogue’s residence and his worksites were deductible under I.R.C. § 162(a) or were nondeductible personal commuting expenses under I.R.C. § 262(a).
2. Whether Bogue substantiated claimed depreciation deductions for his vehicle and tools (and any related property).
3. Whether Bogue substantiated additional Schedule C deductions, including legal expenses, as ordinary and necessary business expenses.
4. Whether Bogue was liable for accuracy-related penalties under I.R.C. § 6662(a) for 2005 and 2006.

## Decision

- The court held that travel between Bogue’s residence and the worksites was nondeductible commuting; no exception applied.
- The court disallowed most depreciation deductions because Bogue failed to substantiate the required elements for listed property and failed to prove depreciation entitlement for other items.
- The court allowed only those legal-expense deductions that were adequately tied to his contracting business and substantiated; other Schedule C items were disallowed for lack of proof.
- The court sustained § 6662(a) accuracy-related penalties, subject to computational adjustments under Rule 155.

## Legal Principles

- Deductions are a matter of legislative grace; the taxpayer bears the burden to prove entitlement and proper substantiation of deductions.
- Transportation between a taxpayer’s residence and a regular or temporary work location is generally personal commuting and nondeductible under § 262(a) unless a recognized exception applies.
- A home-office theory does not convert commuting into deductible travel unless the residence qualifies as a principal place of business under applicable requirements; failure to prove qualification leaves home-to-work travel nondeductible.
- Depreciation and expense claims for vehicles and other listed property require strict substantiation under § 274(d), including adequate records establishing amount, time/place, and business purpose; commuting use is not business use.
- The Commissioner bears the burden of production for § 6662(a) penalties; the taxpayer must show reasonable cause and good faith (or other statutory defenses) to avoid the penalty.

## Conclusion

The Tax Court treated the taxpayer’s home-to-worksite travel as nondeductible commuting, disallowed most depreciation and other expenses due to inadequate substantiation, allowed only limited substantiated legal expenses, and sustained accuracy-related penalties under § 6662(a) with final amounts to be computed.


Bogue v. Commissioner, T.C. Memo 2011-164 (2011)