Emory Law Journal

There’s No Place Like “Home”: § 162(a)(2) and Why Married Taxpayers Just Can’t Get “Away”
Anna K. Diehn J.D., With Honors, Emory University School of Law, Atlanta, Georgia (2010); B.B.A., Emory University (2005). I would like to thank Professor Dorothy A. Brown for her guidance and support, as well as members of the Emory Law Journal for their assistance in writing this Comment. I would also like to thank my family and friends for their endless encouragement and support.

Abstract

This Comment examines § 162(a)(2) of the Internal Revenue Code, which allows a taxpayer to deduct expenses incurred while traveling “away from home” for business purposes. Under this provision, a taxpayer may deduct expenses for travel fares, meals, and lodging. Although such expenses would seem to be non-deductible because they are personal in nature, Congress created a limited exception under § 162(a)(2) to alleviate the burden on the taxpayer whose job requires him to work away from home and therefore essentially incur duplicate living expenses. On the face of the statute, the only apparent requirement is that a taxpayer must be “away from home,” but the statute’s simplicity is deceptive.

Taxpayers who wish to deduct travel expenses under § 162(a)(2) face nearly a century of inconsistent interpretations and arbitrary limitations of when a taxpayer is considered “away.” By analyzing a range of both cases and characteristics of different taxpayers, this Comment reveals an additional complication: the Internal Revenue Service (IRS) and courts have created a “marriage penalty” that severely limits the availability of the § 162(a)(2) deduction for married taxpayers. This Comment further uncovers a gender bias against married women in the application of the provision by the IRS and courts. The gender makeup of the workforce has changed significantly since § 162(a)(2) first appeared in the Tax Code in 1921, and a revision is necessary to alleviate the burden it imposes on working families.

Introduction

Every presidential election, the public pressures the candidates to release their income tax returns, and the 2008 election was no exception. 1 See James V. Grimaldi & Karl Vick, Palin Billed State for Nights Spent at Home, Wash. Post, Sept. 9, 2008, at A01 (describing expenditures Sarah Palin charged to the State of Alaska). While serving as governor of Alaska, Sarah Palin worked out of both Juneau, the state capital, and Wasilla, her hometown where she resides with her husband and children. 2 Id. When Palin stayed in Wasilla, she actually worked in nearby Anchorage. Id. (“Palin moved her family to the capital during the legislative session last year, but prefers to stay in Wasilla and drive 45 miles to Anchorage to a state office building.”). On her 2007 income tax return, Governor Palin claimed a $16,591 deduction under § 162(a)(2) for travel expenses she incurred while working out of Wasilla. 3 Id. The controversy surrounding Palin’s taxes focused specifically on “per diem” payments she received from Alaska. Id. Palin should only be able to omit these employer reimbursements from her gross income if she could legitimately deduct these expenses under § 162(a)(2) of the Tax Code. Under § 162(a)(2) of the Internal Revenue Code, only expenses incurred while “away from home” are deductible. 4See 26 U.S.C. § 162(a)(2) (2006) (allowing a deduction for “traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business”). A taxpayer unfamiliar with § 162(a)(2) might assume that Governor Palin could deduct the expenses incurred in Juneau because only then was she truly away from her hometown of Wasilla. However, the answer is not so simple.

If “home” is defined in the ordinary sense, then the governor could deduct from her income any travel expenses incurred in Juneau because she would be away from her home in Wasilla. 5“Home” is defined as “one’s place of residence,” “a place of origin,” or “the social unit formed by a family living together.” Webster’s Third New International Dictionary of the English Language, Unabridged 1082 (2002). Black’s Law Dictionary defines “home” as “dwelling place,” but then differentiates between “family home” and “tax home.” Black’s Law Dictionary 638, 750, 1502 (8th ed. 2004). However, if “home” is defined as the taxpayer’s “principal place of business,” then Governor Palin would be unable to deduct expenses incurred in Juneau because Juneau is her principal place of business. By analyzing a range of “away from home” cases, this Comment reveals an additional complication in attempting to answer the governor’s tax dilemma: by severely limiting the availability of the § 162(a)(2) deduction, the Internal Revenue Service (IRS) and courts have created a “marriage penalty” for married taxpayers. 6 See infra Part II. Unfortunately for Governor Palin, the bad news does not end here. This Comment further uncovers in the courts’ application of § 162(a)(2) a gender bias against earnings by married women. 7 Id.

Generally, a taxpayer can deduct his business expenses but cannot deduct any “personal, living, or family expenses.” 826 U.S.C. § 262(a) (2006). Deducting business but not personal expenses is permitted because “‘a person’s taxable income should not include the cost of producing that income.’” 9 See, e.g., Nathan R. Gerhardt, Internal Revenue Code § 162(a)(2): Where is “Home?, 2002 Fed. B. Ass’n Sec. Tax’n Rep. 2, 2 (quoting Hantzis v. Comm’r, 638 F.2d 248, 249 (1st Cir. 1981)). Section 162(a)(2) allows a taxpayer to deduct expenses for travel, meals, and lodging, although such expenses appear to be non-deductible because they are personal in nature. 10IRS.gov, Topic 511 - Business Travel Expenses, http://www.irs.gov/taxtopics/tc511.html (last visited Jan. 21, 2010). Under § 162(a)(2), a taxpayer can deduct:1. Travel by airplane, train, bus, or car between your home and your business destination . . . .2. Using your car while at your business destination[.]3. Fares for taxis or other types of transportation between the airport or train station and your hotel, the hotel and the work location, and from one customer to another, or from one place of business to another[.]4. Meals and lodging[.]5. Tips for services related to any of these expenses.6. Dry cleaning and laundry.7. Business calls while on your business trip . . . .8. Other similar ordinary and necessary expenses related to your business travel. These expenses might include transportation to and from a business meal, public stenographer’s fees, computer rental fees, and operating and maintaining a house trailer.Id. Travel expenses do not include everyday non-deductible commuting expenses between a taxpayer’s residence and primary workplace. Mark E. Battersby, On the Road with Uncle Sam: Tax Deductions for Traveling on Business, Pa. Law., Nov.–Dec. 2007, at 50. Congress created a limited exception under § 162(a)(2) to alleviate the burden on the taxpayer whose business requires him to work “away from home,” and therefore essentially incur duplicative living expenses. 11(“The purpose of the ‘away from home’ provision is to mitigate the burden of the taxpayer who, because of the exigencies of his trade or business, must maintain two places of abode and thereby incur additional and duplicate living expenses.”). Accordingly, some living expenses are non-deductible because they are personal expenses, while duplicative living expenses may be deductible under § 162(a)(2). 12 See James v. United States, 308 F.2d 204, 206 (9th Cir. 1962) (arguing that since a taxpayer must eat and sleep regardless of whether he is traveling, “that portion of the cost of food and lodging while on business travel which would have been incurred even at [his place of residence] is actually a personal living expense”). As a result, a taxpayer whose expenses qualify for the deduction under § 162(a)(2) has a distinct advantage over a taxpayer whose expenses do not qualify for the deduction. 13 See id. at 207–08 (“This discriminates against taxpayers whose business does not require travel, and who therefore pay tax upon all of the income which they devote to their personal living expenses. The discrimination may be substantial . . . . [T]he resulting situation is no doubt inequitable.”); Kara Fratto, The Taxation of Professional U.S. Athletes in Both the United States and Canada, 14 Sports Law J. 29, 33 (2007) (“Expenses for travel while away from home are an attractive deduction because they are an ‘above the line’ deduction from gross income to arrive at the adjusted gross income.” (emphasis added)).

This Comment first examines the varying and often conflicting strains of jurisprudence governing the interpretation of § 162(a)(2) and presents a coherent analysis of what constitutes a taxpayer’s “home” and when a taxpayer is considered “away.” 14 See infra Part I. After Congress adopted the provision in 1921, the interpretation of this provision has been left to courts. 15 See John A. Lynch, Jr., Travel Expense Deductions Under I.R.C. § 162(a)(2)What Part of “Home” Don’t You Understand?, 57 Baylor L. Rev. 705, 712 (2005) (noting that the legislative history surrounding § 162(a)(2) is “scant and ambiguous”). This Comment demonstrates that in the vast majority of cases, married taxpayers are unable to obtain the benefit of the deduction because courts, by repeatedly restricting the availability of § 162(a)(2) to married taxpayers, have created a marriage penalty. 16 See infra Part II. The inability of married taxpayers to obtain the deduction will be referred to as the “marriage penalty” throughout this Comment. This term does not refer to the marriage penalty that already exists in the Tax Code’s progressive rate structure and the married filing jointly status. See, e.g., Laura Ann Davis, A Feminist Justification for the Adoption of an Individual Filing System, 62 S. Cal. L. Rev. 197, 199 (1988) (providing “a feminist justification for the use of a separate tax filing system” in part because the progressive rate structure and the joint filing system discriminate against married women taxpayers); Edward J. McCaffery, Taxation and the Family: A Fresh Look at Behavioral Gender Biases in the Code, 40 UCLA L. Rev. 983, 989 (1993) (“The most common complaints made in the tax policy and economic literature regarding the biases of the income tax against women concern the system of aggregated spousal rates, or ‘joint filing.’ The system has given rise to the ‘marriage penalty.’” (footnote omitted)). This Comment asserts that the two primary victims of the § 162(a)(2) marriage penalty are dual wage earners and married women because courts fail to consider the implications of their decisions on these groups, thereby creating an additional disincentive for wives to enter and remain in the workforce. 17 See infra Part III. The workforce has changed significantly since § 162(a)(2) first appeared in the Tax Code in 1921, and a revision is necessary to alleviate the burden on working families imposed by the marriage penalty and to facilitate the entry of more women into the workforce.

Part I of this Comment discusses the development of § 162(a)(2) case law and demonstrates the increasing reluctance of courts to allow a taxpayer to receive the deduction. Part II argues that courts have created a § 162(a)(2) marriage penalty, which prevents married taxpayers from obtaining the deduction. Part III argues that there are two primary victims of the marriage penalty: (1) dual wage earners, and (2) married women taxpayers. Part IV advocates for the enactment of a special provision reinterpreting § 162(a)(2) for married couples who file jointly, whereby “home” is defined as a taxpayer’s place of residence. Solving the problems created by the current interpretation of § 162(a)(2) through a statutory amendment is neither drastic nor unprecedented; the IRS and courts have made similar exceptions for certain groups of taxpayers in the past. 18 See infra Part IV.

It is important to note that § 162(a)(2) also has created obstacles for groups other than married and women taxpayers. However, such obstacles are based on the occupation of the taxpayer and do not trigger marital status and gender concerns. 19 E.g., York v. Comm’r, 160 F.2d 385, 385 (1st Cir. 1947) (taxpayer is a lawyer); Wallace v. Comm’r, 144 F.2d 407, 410 (9th Cir. 1944) (taxpayer is an actress); Johnson v. Comm’r, 115 T.C. 210, 211 (2000) (taxpayer is a ship captain); Horton v. Comm’r, 86 T.C. 589, 589 (1986) (taxpayer is a professional athlete); see also Deblock v. Dep’t of Revenue, 7 Or. Tax 191, 192 (Or. T.C. 1977) (“‘The question has arisen in practically as many contexts as there are occupations in the vast and varied economy of the country.’” (quoting the plaintiffs’ trial memorandum)). This Comment addresses the situation of these other taxpayers briefly in Part IV but focuses on the need for a legislative solution for married women taxpayers.

I. The Evolution of § 162(a)(2) “Away from Home” Jurisprudence

Section 162(a) of the Internal Revenue Code allows a taxpayer to deduct “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” 2026 U.S.C. § 162(a) (2006). Under § 162(a)(2) these expenses include “traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business.” 21Id. § 162(a)(2). See also IRS.gov, supra note 10 (providing examples of deductible travel expenses while away from home). On its face, the statute has only two requirements: (1) the taxpayer must be “away from home;” and (2) the taxpayer must be “in the pursuit of a trade or business.” Therefore, it would appear that Governor Palin could deduct expenses she incurred in Juneau because she was working away from her hometown of Wasilla. However, the question of whether an expense is deductible under § 162(a)(2) has been “a prolific and continuous source of litigation under the income tax law.” 22 Deblock, 7 Or. Tax at 192. At the heart of the controversy is what constitutes a taxpayer’s “home” for purposes of § 162(a)(2). 23 E.g., Crystal Ovsak, The Not So Slippery Slope: The Eighth Circuit Determines That Employer-Paid Airfare Is Not “Wages” Subject to Withholding Taxes, 77 N.D. L. Rev. 433, 438–41 (2001) (discussing the split of authority in defining “home” as either place of residence or principal place of business).

Because neither the Tax Code nor the Supreme Court provides a definition of the word “home,” the IRS and lower courts have interpreted the term inconsistently. 24 Compare Wallace v. Comm’r, 144 F.2d 407, 410 (9th Cir. 1944) (defining home as taxpayer’s place of residence), and Coburn v. Comm’r, 138 F.2d 763, 764 (2d Cir. 1943) (same), with Hantzis v. Comm’r, 638 F.2d 248, 254 (1st Cir. 1981) (defining home as taxpayer’s principal place of business), and Bixler v. Comm’r, 5 B.T.A. 1181, 1184 (1927) (same). A shrinking minority of courts define “home” in this context as the taxpayer’s “place of residence.” 25 See infra Part I.A. On the other hand, the IRS and the Tax Court have adopted the position that a taxpayer’s “home” is his “principal place of business.” 26 See infra Part I.B. Some courts use different terms to describe a taxpayer’s principal place of business. E.g., Hantzis, 638 F.2d at 249 (defining home as a taxpayer’s “place of employment”); Filler v. Comm’r, 321 F.2d 900, 900 (8th Cir. 1963) (defining home as a taxpayer’s “principal post of duty”). Although the Supreme Court has addressed § 162(a)(2) on three different occasions, it has failed to offer clear guidance on the interpretation of “home.” 27 See infra Part I.C. This section explains and distinguishes the minority rule, the majority rule, and the Supreme Court’s position.

A. “Home” Means Home

The ordinary meaning of the word “home” is one’s “place of residence.” 28 See supra note 5. Courts sometimes use the term “abode” to describe a taxpayer’s personal residence. See, e.g., Henderson v. Comm’r, 143 F.3d 497, 499 (9th Cir. 1998). Such an interpretation does not appear to conflict with the purpose of the deduction, which is to avoid taxing people whose business requires them to travel away from home and thus incur duplicative living expenses. 29 See, e.g., Rosenspan v. United States, 438 F.2d 905, 912 (2d Cir. 1971) (finding that a taxpayer with no permanent residence cannot obtain the § 162(a)(2) deduction). If Congress had intended for “home” to mean something unusual, it could have used a “more appropriate term.” 30Wallace v. Comm’r, 144 F.2d 407, 410 (9th Cir. 1944). The court further explained:The plain, obvious and rational meaning of a tax statute is always to be preferred to any narrow or hidden sense . . . and while the meaning to be given to terms used will be determined from the character of their use by the legislature in the statute under consideration, words in common use should not be distorted by administrative or judicial interpretation.Id. In the dissent to Commissioner v. Flowers, Justice Rutledge rejected the notion of “home” as the taxpayer’s principal place of employment because he could find “no purpose stated or implied in the Act, the regulations or the legislative history to support such a distortion.” 31326 U.S. 465, 477 (1946) (Rutledge, J., dissenting) (agreeing with the court of appeals that “if Congress had meant ‘business headquarters,’ and not ‘home,’ it would have said ‘business headquarters’” and stating that “[w]hen it used ‘home’ instead, I think it meant home in everyday parlance, not in some twisted special meaning of ‘tax home’ or ‘tax headquarters.’”). According to Justice Rutledge, the only stated purpose of § 162(a)(2) is to relieve the tax burden when a taxpayer is away from home on business. 32 Id. at 474–75. Therefore, a taxpayer who is away from her place of residence, like Governor Palin, should be able to deduct those costs incurred in the pursuit of business.

Today, however, for purposes of § 162(a)(2) only a minority of courts define “home” as a taxpayer’s residence. In Coburn v. Commissioner, the Second Circuit found that the taxpayer’s “home” was his home in the “ordinary meaning of the word.” 33138 F.2d 763, 764 (2d Cir. 1943). In Coburn, the taxpayer maintained a residence in New York, but spent 263 days of the taxable year in California pursuing an acting career. 34 Id. Although he engaged in some business-related activities in New York, the taxpayer derived the majority of his income from his work in California, where he had rented an apartment and employed a cook and chauffeur. 35 Id. The Tax Court denied him the deduction of these expenses under § 162(a)(2) based on a finding that his principal place of business was in California. 36 Id. The Second Circuit reversed the Tax Court’s decision, 37 Id. The court noted that a tax “home” should be limited to a place where the taxpayer is “regularly employed or customarily carries on business.” Id. (emphasis added). reasoning that the travel expenses were deductible because “nothing in the statute bears evidence of any unusual meaning” and “[t]he fact that by chance he got five short-term contracts which caused him to spend 263 days in California did not wrest him from New York City permanently even in a professional sense.” 38 Id. at 764–65.

Similarly, in Wallace v. Commissioner, the Ninth Circuit defined “home” as the taxpayer’s place of residence, which allowed a taxpayer to take the § 162(a)(2) deduction. 39144 F.2d 407, 411 (9th Cir. 1944). The taxpayer, an actress, worked for seven months in Hollywood, California, during the taxable year but maintained her residence in San Francisco. 40 Id. at 408. Under § 162(a)(2), the taxpayer deducted the costs she incurred working in Hollywood, including her rent and food expenses. 41 Id. at 408–09. In allowing the deduction, the Ninth Circuit considered the particular situation of the taxpayer: Her connections to Hollywood were only “casual, professional and temporary . . . . Her physical presence and her place of abode in the vicinity of Hollywood were business necessities, and at no time did she manifest any intention or desire to remain there after completion of her work.” 42 Id. at 410–11. Like the taxpayer in Coburn, the actress would not have been able to deduct her business expenses under the “principal place of business” definition.

B. “Home” as Principal Place of Business

In contrast to the opinions cited above, the IRS, the Tax Court, and the majority of United States circuit courts have adopted the position that a taxpayer’s “home” is generally his “principal place of business.” 43Rev. Rul. 63-82, 1963-1 C.B. 33. An exception to this general rule is that when a taxpayer has no regular principal place of business he can deduct § 162(a)(2) expenses under the place of residence definition; however, if he cannot establish a regular place of residence, the taxpayer is deemed “homeless” and is unable to deduct any expenses. See, e.g., Henderson v. Comm’r, 143 F.3d 497, 499–500 (9th Cir. 1998) (recognizing exception but disallowing deduction because taxpayer did not incur continuous and substantial costs at his place of residence and had no business reason to maintain it); Whitman v. United States, 248 F. Supp. 845, 850 (W.D. La. 1965) (recognizing exception but disallowing deduction because taxpayer’s home “in a real and substantial sense” was his mobile home at each job site). The courts have justified this interpretation because the average taxpayer maintains a home close to his place of employment. 44 See Bixler v. Comm’r, 5 B.T.A. 1181, 1184 (1927) (“A taxpayer may not keep his place of residence at a point where he is not engaged . . . and take a deduction from gross income for his living expenses while away from home.”). Under such an interpretation, a taxpayer who maintains his place of residence somewhere other than his principal place of business is unable to receive the deduction.

One of the earliest cases in which the Tax Court adopted the principal place of business rule is Bixler v. Commissioner. 45 Id. at 1184. In Bixler, the taxpayer maintained a residence in Mobile, Alabama, with his family and was employed by state fairs and expositions throughout the country. 46 Id. at 1182. In 1922, he worked in Hammond, Louisiana, from January until April, and at a fair in Houston, Texas, from April through early December. 47 Id. The taxpayer then returned to Mobile, where his family had remained, to work at a fair for all of 1923. 48 Id. at 1183. The court prohibited the taxpayer from deducting the living expenses he incurred in Hammond and Houston in 1922 because it defined the taxpayer’s “home” for purposes of § 162(a)(2) as his principal place of business. 49 Id. at 1184 (“[T]raveling and living expenses are deductible under the provisions of this section only while the taxpayer is away from his place of business, employment, or the post or station at which he is employed, in the prosecution, conduct, and carrying on of a trade or business.”). Under this rule, the taxpayer’s “home” was Hammond while he worked in Hammond and became Houston when worked in Houston. 50 Id. Accordingly, he could not deduct expenses for either location because at the time he was not considered “away from home.” 51 Id. The court offered little explanation for this interpretation of “home,” stating only that “we think [§ 162(a)(2) was] intended to allow a taxpayer a deduction of traveling expenses while away from his post of duty or place of employment on duties connected with his employment.” 52 Id. (emphasis added).

C. The Supreme Court’s Position

The Supreme Court has declined to define “home” for purposes of § 162(a)(2), despite multiple opportunities to do so. 53 See Comm’r v. Stidger, 386 U.S. 287, 292 (1967) (deciding that it was “not necessary for us to decide here whether this congressional action (or inaction) constitutes approval and adoption of the Commissioner’s interpretation of ‘home’”); Peurifoy v. Comm’r, 358 U.S. 59, 60 (1958) (finding it was “inappropriate to consider such questions”); Comm’r v. Flowers, 326 U.S. 465, 472 (1946) (finding it was “unnecessary here to enter into or to decide this conflict”). The Supreme Court first addressed § 162(a)(2) in Commissioner v. Flowers, where the taxpayer lived in Jackson, Mississippi, but traveled to his office in Mobile, Alabama, for work. 54 Flowers, 326 U.S. at 468. For the first year at issue, the taxpayer spent 203 days in Jackson and 66 days in Mobile and made 33 trips between the two locations. For the second year at issue, the taxpayer spent 168 days in Jackson and 102 days in Mobile and made 40 total trips. Id. The Court held that the taxpayer could not deduct the transportation costs from Jackson to Mobile, or the meal and lodging expenses he incurred while working in Mobile. 55 Id. at 473. The Court established three requirements that must be met for a taxpayer to deduct travel expenses under § 162(a)(2):

1. The expense must be a reasonable and necessary traveling expense, as that term is generally understood. This includes such items as transportation fares and food and lodging expenses incurred while traveling.

2. The expense must be incurred “while away from home.”

3. The expense must be incurred in pursuit of business. 56 Id. at 470.

The Court then found that the third requirement had not been met because the expenses were not incurred in pursuit of the employer’s business, but rather for “personal” reasons—the taxpayer’s desire to reside in Mississippi but work in Alabama. 57 Id. at 472–73. The Court noted that if the taxpayer had lived and worked in one city, his living expenses and commuting expenses would not be deductible; the nature of the expense did not change simply because the taxpayer had moved farther away. Id. at 473. Therefore, his travel expenses were not deductible. 58 Id. at 472–73. By focusing on the third requirement, the Supreme Court avoided the task of interpreting “home” for the purposes of § 162(a)(2). 59Gerhardt, supra note 9, at 2–3. However, it appears that the taxpayer would have lost under either definition of “home” using the Flowers test because the taxpayer would still fail to meet the third requirement. Joel S. Newman, Federal Income Taxation: Cases, Problems, and Materials 327–28 (3d ed. 2005).

In his dissent, Justice Rutledge declined to adopt the test set out by the majority, arguing that he would have allowed the deduction under § 162(a)(2) because a taxpayer’s “home” is his place of residence. 60 Flowers, 326 U.S. at 474–75 (Rutledge, J., dissenting). Therefore, under Justice Rutledge’s model, the taxpayer’s “home” was in Jackson and the transportation, lodging, and food expenses he incurred in Mobile would be deductible. 61 Id. at 475. Like the court in Wallace, Justice Rutledge emphasized the taxpayer’s strong connection to his place of residence 62 Id. : Over the course of thirty years, the taxpayer had worked and lived, paid local and state taxes, sent his kids to school, owned a home, and established a law firm all in Jackson. 63 Id. In comparison, the taxpayer worked in Mobile for only one-third of the year and spent the remainder of the year in Jackson. 64 Id. Although the taxpayer’s decision to work in Mobile was “motivated chiefly by . . . personal considerations,” he still did much of his work in Jackson. 65 Id. Therefore, Justice Rutledge would have allowed the deduction, deemphasizing the taxpayer’s motivation for working in one city and residing in another.

In United States v. Correll, the Court again dodged the issue of defining a taxpayer’s “home” and instead more narrowly interpreted “away from home” to require an overnight stay. 66389 U.S. 299 (1967). The taxpayer was a traveling salesman who “customarily left home early in the morning, ate breakfast and lunch on the road, and returned home in time for dinner.” 67 Id. at 300. He deducted the cost of his morning and noon meals on his income tax returns for 1960 and 1961 under § 162(a)(2). 68 Id. The Commissioner argued that the cost of the meals was a non-deductible personal expense because the taxpayer’s trips “requir[ed] neither sleep nor rest, regardless of how many cities a given trip may have touched, how many miles it may have covered, or how many hours it may have consumed.” 69 Id. at 302–03. Although the Sixth Circuit had rejected the rule as an invalid regulation, the Supreme Court deferred to the Commissioner and adopted the “sleep or rest” requirement, which prohibits deductions of expenses under § 162(a)(2) for day trips. 70 Id. at 303, 307. It reasoned that although arbitrary, the rule simplified the enforcement of § 162(a)(2). 71 Id. at 303−04. In his dissent, Justice Douglas agreed with the Sixth Circuit and rejected the majority’s adoption of the overnight requirement. 72 Id. at 307 (Douglas, J., dissenting). He argued that the rule was inappropriate because it injected a time element into the provision in “‘an era of supersonic travel.’” 73 Id. (quoting Correll v. United States, 369 F.2d 87, 89−90 (6th Cir. 1966)).

In Peurifoy v. Commissioner, 74358 U.S. 59 (1958). the Supreme Court again refrained from defining “home” for purposes of § 162(a)(2) but created an exception to the Flowers “personal-versus-business” distinction. In Peurifoy, the taxpayers were three construction workers employed in Kinston, North Carolina, for continuous periods of 8 1/2 months, 12 1/2 months, and 20 1/2 months, respectively. 75 Id. at 59. Each taxpayer maintained a permanent residence in another part of the state and wanted to deduct the expenses incurred for board and lodging while working in Kinston. 76 Id. Following the reasoning in Flowers, the Court found that the construction workers’ expenses were incurred because of a personal choice not to live and work in the same place. 77 Id. at 60. Under the general rule of Flowers, a taxpayer cannot take advantage of § 162(a)(2) if the expenses are not required “by the exigencies of business.” 78 Id. (citations omitted). The Court in Peurifoy did however adopt the Tax Court’s exception to the general rule: when a taxpayer’s employment is temporary, expenses may be deductible under § 162(a)(2) even though they are not required “by the exigencies of business.” 79 Id. at 60–61. However, if a taxpayer’s employment was “indefinite” or “indeterminate,” expenses are not deductible under § 162(a)(2). Id. Stated another way, taxpayers do not need a business reason for maintaining their place of residence, as long as their job away from home is temporary. While the exception appears to help taxpayers like those in Peurifoy—two of whom were away from home for less than a year—the Court found that the employment terms for all three taxpayers were not temporary and therefore the expenses were non-deductible. 80 Id. at 61. Once again, the Court failed to address the definition of “home,” and instead decided the case on a “narrow question of fact.” 81 Id. at 60; see also supra note 53.

As demonstrated above, courts have struggled to arrive at reasonable and coherent rules to apply § 162(a)(2) to address the complexities of everyday life for taxpayers who may not live where they work. Justice Rutledge accurately characterized the courts’ decisions in this way:

By construing “home” as “business headquarters”; by reading “temporarily” as “very temporarily” into [§ 162(a)(2)]; by bringing down “ordinary and necessary” from its first sentence into its second; by finding inequity where Congress has said none exists; by construing “commuter” to cover long-distance, irregular travel; and by conjuring from the “statutory setting” a meaning at odds with the plain wording of the clause, the Government makes over understandable ordinary English into highly technical tax jargon. 82Comm’r v. Flowers, 326 U.S. 465, 479–80 (1946) (Rutledge, J., dissenting).

Moreover, courts have yet to grapple with the implications of their interpretations of the Tax Code on married couples or to address the resulting gender bias. Parts II and III of this Comment describe these problems and outline the argument for reform.

II. The § 162(a)(2) “Marriage Penalty”

In allowing taxpayers to deduct lodging, meal, and travel expenses under § 162(a)(2), “Congress freed from taxation income spent on personal living expenses while on business trips.” 83James v. United States, 308 F.2d 204, 206–07 (9th Cir. 1962); see also Griesemer v. Comm’r, 10 B.T.A. 386, 389 (1928) (“Simply because the amounts in question happen to be ‘living’ expenses in a strict sense does not prevent them from being deductible. . . .”). The taxpayer who qualifies for the deduction receives a distinct advantage because he may deduct otherwise personal living expenses and thereby lower his tax liability. 84United States v. Correll, 389 U.S. 299, 301–02 (1967) (noting that a taxpayer who receives a deduction for personal living expenses while on business travel receives “something of a windfall”); James, 308 F.2d at 207 (noting that the “discrimination may be substantial” when one taxpayer is allowed the deduction and another taxpayer is not); see also supra note 10. Unfortunately, in the vast majority of cases, married taxpayers are unable to obtain the § 162(a)(2) deduction. 85This Comment examines § 162(a)(2) cases from 1927 through 2008, specifically decisions where (1) the taxpayer is the husband and primary wage earner and his wife is the secondary wage earner; (2) the taxpayer is the wife and primary wage earner and her husband is the secondary wage earner; (3) the taxpayer is the husband and it is unclear whether he is the primary wage earner; (4) the taxpayer is a single male; and (5) the taxpayer is a single female. Taxpayers who are considered itinerant or “homeless” are outside the scope of this survey. This section argues that courts have created a § 162(a)(2) marriage penalty by imposing four restrictions that target married taxpayers: (1) the principal place of business rule, (2) the overnight requirement, (3) the limitations to the temporary exception, and (4) the personal-versus-business distinction. 86 See infra Part I.A–D. While single taxpayers are also limited in their ability to deduct § 162(a)(2) expenses, married taxpayers are disproportionately affected by these limitations because of their social and economic realities. 87 See Davis, supra note 16, at 216–18 (noting that the “social and economic reality” that is the traditional justification for joint filing for married couples in part no longer exists); Lynch, supra note 15, at 772–77 (discussing the application of the “tax home doctrine to deny deduction of business related living expenses . . . of married couples where the spouses work in different places”).

A. How the “Principal Place of Business” Rule Is Particularly Harmful to Married Taxpayers

The majority of courts have defined “home” for the purposes of § 162(a)(2) as a taxpayer’s principal place of business. 88 See supra Part I.B–C. By adopting a definition of “home” that is inconsistent with its ordinary meaning, courts took their first big step in limiting the § 162(a)(2) deduction for married taxpayers, albeit perhaps unintentionally. Recall the taxpayer in Bixler who maintained a family residence in Mobile, Alabama, but worked at state fairs and expositions throughout the country. 89 See supra text accompanying notes 45−52. The court denied the taxpayer the deduction when he was traveling away from Mobile because it determined his tax home was his principal place of business, making “home” wherever the job took him. 90 Id. To avoid duplicative living expenses, the taxpayer would have had to relocate his family from Mobile to Hammond in early-1922, from Hammond to Houston in mid-1922, and then from Houston back to Mobile in late-1922. 91 See Bixler v. Comm’r, 5 B.T.A. 1181 (1927) (failing to address the fact that the taxpayer’s family was in Mobile and that the taxpayer returned there for work in 1923). In the alternative, the taxpayer could maintain his place of residence by quitting his job and risking unemployment.

Bixler demonstrates that the majority approach “assumes that an employee will locate the employee’s residence as close as possible to his or her workplace” and is able to avoid the cost of maintaining two homes, one at his principal place of business and one at his place of residence. 92 See Ovsak, supra note 23, at 440 (describing problems with the “principal place of business” rule). The principal place of business definition disadvantages married taxpayers because such couples are less likely to relocate and significantly more likely to travel for business purposes than their single counterparts. 93 See Evelyn Addante, Air Travel Market Segments: A New England Case Study, E-C026 Transp. Res. Circular 307, 309−11, 318 (2001), available at http://onlinepubs.trb.org/Onlinepubs/circulars/ec026/ec026.pdf (finding that “[m]en from family households who are traveling on business account for almost one-third of the resident-based air travel market from New England;” whereas business trips by women from a family household “account[] for 18 percent of commercial air trips” in the New England region). In comparison to single taxpayers, married taxpayers tend to form stronger ties to communities and are therefore less willing to move. 94 See Sam Gould & Larry E. Penley, A Study of the Correlates of the Willingness to Relocate, 28 Acad. Mgmt. J. 472, 472–73 (1985) (finding that length of age, job involvement, and time in area were negatively associated with the willingness to relocate). This is especially true in the case of married taxpayers with young children. 95 Id. at 473; see also U.S. Census Bureau, America’s Families and Living Arrangements: 2009, at 1 tbl.C3 (2009), available at http://www.census.gov/population/www/socdemo/hh-fam.html (finding that 66.8% of children under the age of eighteen live with both married parents). Additionally, married couples, who account for seventy-seven percent of all homeowners, 96Tom Van Riper, The Cost of Being Married Versus Being Single, Forbes.com, July 25, 2006, http://www.forbes.com/2006/07/25/singles-marriage-money-cx_tvr_06singles_0725costs.html. are often more reluctant to relocate because they are more likely to already own a home that they must then sell before moving. 97 See Andrew Oswald, Theory of Homes and Jobs 1 (Sept. 18, 1997) (unpublished manuscript, on file with author) (finding that homeowners in Britain are less likely to move to find a new job and that homeownership therefore can lead to higher unemployment rates). Despite sometimes acknowledging the inequities that flow from this rule, courts have for the most part adopted a rule where the taxpayer’s principal place of business is considered “home” and as a result consistently denied the deductions for married couples. 98 See, e.g., Comm’r v. Flowers, 326 U.S. 465, 475 (1946) (Rutledge, J., dissenting) (noting that the taxpayer had worked in Jackson for thirty years, paid taxes and voted, sent his children to school, owned a house that he had built, and established a law firm).

B. The “Overnight Requirement” Substantially Limits the Benefits of § 162(a)(2) for Married Taxpayers

The Supreme Court has added a requirement that a taxpayer must be away from home overnight to receive the § 162(a)(2) deduction. 99United States v. Correll, 389 U.S. 299, 304−05 (1967). In Correll, the taxpayer was a traveling salesman who left his place of residence early in the morning for work and returned in time for dinner with his family, 100 Id. at 300. and he was denied the deduction because the taxpayer had not been away overnight. 101 Id. at 302–07. After Correll, a taxpayer is unable to deduct § 162(a)(2) expenses if he returns home at night, regardless of how far he travels each day. However, the taxpayer who travels the same distance but spends the night in a hotel can deduct personal expenses under § 162(a)(2). 102Although the taxpayer who returns to his place of residence on a daily basis does not incur additional lodging expenses, he incurs the same meal and commuting costs as the taxpayer who spends the night in a hotel. However, the taxpayer who returns to his place of residence on a daily basis is unable to deduct such costs. See James v. United States, 308 F.2d 204, 206–07 (9th Cir. 1962). For an explanation of the difference between non-deductible commuting expenses and § 162(a)(2) travel expenses, see Tsilly Dagan, Commuting, 26 Va. Tax Rev. 185, 190–92 (2006).

Married taxpayers are particularly affected by this limitation because they are more likely to make daily long distance commutes than single taxpayers. 103 See Heather Hofmeister & Detlev Lueck, Who Works Where, and How Does That Affect Family Life? The Impact of Work Location on Family Outcomes in Germany and the United States 9 (unpublished manuscript presented at the 2007 annual meeting of the American Sociological Association in New York, New York) (on file with author) (“Married men’s commutes are longer than single men’s commutes even when income is the same, which suggests that the long commute of married men implies a choice to commute longer in exchange for better residential options, perhaps as a family lifestyle strategy.”). While a single taxpayer tends to be freer to travel overnight, a married taxpayer will often increase his daily commute to return home to his family at night and help out with household tasks. 104 Id. The overnight requirement makes it more difficult for families to spend time together because it creates a strong financial incentive for a taxpayer to stay away from his place of residence overnight. 105 See Correll, 389 U.S. at 299 (denying § 162(a)(2) deductions to a taxpayer who attempted to return daily to his place of residence). Furthermore, the overnight requirement is inappropriate because it injects a time element into a provision that is primarily concerned with geography, i.e., where the taxpayer is. 106 Id. at 307 (Douglas, J., dissenting). Modern transportation provides an efficient means of traveling long distances in a short amount of time—a taxpayer can fly across the country in the morning, attend a business meeting, and return in time for dinner with his family. 107 See Gerhardt, supra note 9, at 1 (“The advent of very efficient means of public transportation allows businessmen to travel great distances as part of their normal business operations.”). A married taxpayer is more likely to take advantage of such an option but then is unable to deduct § 162(a)(2) expenses because of the overnight requirement. The Court in Correll acknowledged that the overnight requirement was an arbitrary rule, but ignored the plight of married taxpayers in the interests of simplifying the administration of § 162(a)(2). 108 See Correll, 389 U.S at 303 (“Any rule in this area must make some rather arbitrary distinctions . . . .”).

C. The “Temporary” Exception Is Unrealistic for Families in Today’s Economy

In Peurifoy, the Supreme Court recognized an exception to the principal place of business rule when a taxpayer’s employment is “temporary,” because it is unreasonable to expect a taxpayer to uproot his family for a job that is neither permanent nor long-term. 109Andrews v. Comm’r, 931 F.2d 132, 137 (1st Cir. 1991) (citing Peurifoy v. Comm’r, 358 U.S. 59 (1958)). However, the majority of married couples cannot take advantage of this exception because of the “business reason” rule created by the First Circuit in Hantzis v. Commissioner and the one-year limitation imposed by the statute.

In Hantzis, the First Circuit limited the temporary exception to situations where the taxpayer had a business reason for maintaining his place of residence away from his place of business. 110Hantzis v. Comm’r, 638 F.2d 248 (1st Cir. 1981). In Hantzis, the taxpayer resided in Boston, Massachusetts, with her husband. 111 Id. at 249. She attended Harvard Law School, and her husband was employed as a faculty member at Northeastern University. 112 Id. During her second year of law school, she unsuccessfully tried to obtain employment in Boston for the following summer. 113 Id. Instead, she worked for ten weeks as a legal assistant in New York City, while her husband taught summer classes in Boston and remained in their family residence. 114 Id. She returned to their shared home in Boston after only ten weeks. 115 Id. After acknowledging the temporary exception, the court found her “tax home” was New York City because she had no business reason to maintain her residence in Boston, and therefore disallowed the deduction. 116 Id. at 255–56

Although a majority of courts have adopted the First Circuit’s reasoning, 117 E.g., Wilbert v. Comm’r, 553 F.3d 544, 549 (7th Cir. 2009); Henderson v. Comm’r, 143 F.3d 497, 499–500 (9th Cir. 1998); Andrews v. Comm’r, 931 F.2d 132, 136–37 (1st Cir. 1991); Yeates v. Comm’r, 873 F.2d 1159, 1160−61 (8th Cir. 1989); Koepke v. Comm’r, No. 21111-05S, 2008 WL 5100850, at *4 (T.C. Dec. 4, 2008). the Hantzis decision is unrealistic for married couples. A spouse, like the taxpayer in Hantzis, will generally first search for job opportunities close to home before considering to work farther away. 118 See Hantzis, 638 F.2d at 249, 255 (describing how taxpayer first attempted to obtain a job in Boston near her place of residence but failed and had to look in other cities); Yeates, 873 F.2d at 1160 (describing taxpayer who repeatedly tried to find a job near his place of residence). Regardless of how temporary the position might be, if a taxpayer is forced to work away from home, he will not be able to deduct expenses if he lacks a “business connection” to his place of residence. 119 Hantzis, 638 F.2d at 249, 255 (describing taxpayer who was only away from her residence for one summer). While a taxpayer’s willingness to be geographically mobile gives him more job flexibility and reduces his potential for unemployment, a taxpayer should not have to move his family each time a new opportunity arises just to save duplicative living expenses. 120 See Michael Luo, For Growing Ranks of the White-Collar Jobless, Support with a Touch of the Spur, N.Y. Times, Jan. 25, 2009, at A16 (describing the plight of an unemployed former manager who drove seven hours to another city for a job fair because his family’s savings were rapidly dwindling). This is especially true when the length of employment is uncertain and the taxpayer soon may change jobs again. 121 See Koepke, 2008 WL 5100850, at *3–4 (denying the deduction although “[t]he reality of petitioner’s situation was that he did not know how long he would be in any of the cities in which he worked or where he would go next”).

The Hantzis decision is particularly harmful to families when one spouse becomes unemployed. 122 See, e.g., Wilbert, 553 F.3d at 545–50 (explaining that a taxpayer lost his job near his place of residence and was unable to receive the deduction when he could only find temporary work in bigger cities); Bogue v. Comm’r, No. 24574-05, 2007 WL 1712639, at *4 (T.C. June 14, 2007) (same); Farran v. Comm’r, No. 20434-05, 2007 WL 1712715, at *4 (T.C. June 14, 2007) (same); Riley v. Comm’r, No. 21124-05, 2007 WL 1712775, at *4 (T.C. June 14, 2007) (same); Stockwell v. Comm’r, No. 21954-05, 2007 WL 1702608, at *3−4 (T.C. June 13, 2007) (same); see also Roberta F. Mann, On the Road Again: How Tax Policy Drives Transportation Choice, 24 Va. Tax Rev. 587, 607 (2005) (“‘Workforce development and transportation policies are inexorably linked.’” (quoting Angela Glover Blackwell, Promoting Equitable Development, 34 Ind. L. Rev. 1273, 1279 (2001))). Unemployment rates have soared recently and taxpayers have struggled to find job opportunities. 123Luo, supra note 120 (noting that white-collar unemployment rose to 4.6% in December 2008, up from 3% in 2007, and that blue collar unemployment rose to 11.3%). The average working taxpayer may have to accept whatever position is available, regardless of whether the job has long-term potential. 124 See id. (describing a former professional who shoveled snow when he could not find employment elsewhere). For example, in Wilbert v. Commissioner, a married taxpayer was laid off from his job in Minneapolis and found temporary employment in three different cities throughout the year. 125 Wilbert, 553 F.3d at 546. While working, the taxpayer maintained his family residence in Minneapolis where his wife and children remained. 126 Id. Applying Hantzis, the court denied him the benefit of the deduction because he no longer had a “business reason” for maintaining his place of residence in Minneapolis. 127 Id. at 548–49.

Unfortunately and not surprisingly, the couple in Wilbert is not alone—many married taxpayers find themselves in similar economic positions and are denied the deduction based on the Hantzis holding. 128 See cases cited supra note 122. The decision in Hantzis destroys the one exception that still allowed married taxpayers to deduct duplicative travel expenses. The “business reason” rule is unreasonable, unrealistic, and inequitable in expecting the married taxpayer to relocate each time one spouse finds new work, regardless of financial ability. 129 See Christopher W. Schoen, Note, The Family Savings Account: A Practical Tax Incentive to Stimulate Personal Savings Rates, 4 Hofstra Prop. L.J. 103, 104 (1990) (“For example, due to general inflation during the post-war period, many young families can no longer afford a house in major metropolitan areas.”).

D. The Limited Availability of § 162(a)(2) for Married Taxpayers After Flowers

After Flowers, a taxpayer who maintains a place of residence in one place and works in another is prevented from deducting § 162(a)(2) expenses because the decision to work away from home is characterized as “personal.” 130 See supra Part I.B (discussing the Flowers opinion). The “personal-versus-business” analysis is flawed in two ways. 131The personal-versus-business distinction has been discussed in other contexts. See Dagan, supra note 102 (arguing that the personal-versus-business distinction is inadequate in the context of commuting expenses); Marie Louise Fellows, Rocking the Tax Code: A Case Study of Employment-Related Child-Care Expenditures, 10 Yale J.L. & Feminism 307 (1998) (examining the personal-versus-business distinction as applied to child care and suggesting that the anti-subordination principle may prove useful). First, the personal-versus-business distinction is the wrong inquiry in § 162(a)(2) cases. Section 162(a)(2) allows a taxpayer to deduct what is otherwise a non-deductible personal expense, such as lodging and meals. 132Jay Katz, The Deductibility of Educational Costs: Why Does Congress Allow the IRS to Take Your Education So Personally?, 17 Va. Tax Rev. 1, 9 (1997) (“Occasionally, the Code and the regulations do allow a deduction for some personal expenses if they also meet the requirements for a trade or business deduction under section 162(a).”). Such costs should be deductible because Congress created an exception under § 162(a)(2) to the general rule that personal, living, and family costs are not deductible. 133 See supra notes 8–13 and accompanying text. By labeling a decision as “personal,” courts overlook the fact that a taxpayer who qualifies for § 162(a)(2) can deduct expenses that are personal, such as lodging and meals. 134 See supra notes 8–13 and accompanying text. Stated another way, after Flowers, taxpayers are unable to deduct personal expenses under § 162(a)(2) because the expenses are characterized as personal. Such circular logic undoubtedly helps courts decide when a taxpayer’s expenses are deductible under § 162(a)(2) quickly, but certainly not fairly. 135 See Dagan, supra note 102, at 199 (“The seemingly technical business–personal distinction does not encompass the full range (and the nuances) of the normative considerations involved, and hence, needs to be substituted by more subtle devices.”).

Secondly, the personal-versus-business distinction is particularly harmful to married taxpayers because it assumes that a taxpayer has only two personalities—one business, the other personal. 136 See William D. Popkin, The Taxpayer’s Third Personality: Comments on Redlark v. Commissioner, 72 Ind. L.J. 41, 44 (1996) (finding that the personal-versus-business distinction is stretched to its limits in certain contexts such as commuting expenses). While the former is concerned exclusively with the taxpayer’s profit-seeking motive, the latter focuses exclusively on the taxpayer’s pleasure-seeking motive. 137 See, e.g., United States v. Gilmore, 372 U.S. 39, 48 (1963) (characterizing an expense as business versus personal depends on the whether the “claim arises in connection with the taxpayer’s profit-seeking activities” (emphasis added)). Courts automatically label a taxpayer’s choice to live in one place and work in another as a decision fueled by the taxpayer’s pleasure-seeking motive because they assume that a rational taxpayer would live closer to work to avoid incurring additional expenses. 138 See, e.g., Andrews v. Comm’r, 931 F.2d 132, 138 (1st Cir. 1991) (“The guiding policy must be that the taxpayer is reasonably expected to locate his ‘home,’ for tax purposes, at his ‘major post of duty’ so as to minimize the amount of business travel away from home that is required; a decision to do otherwise is motivated not by business necessity but by personal considerations, and should not give rise to greater business travel deductions.”); see also Ovsak, supra note 23, at 440 (“The [principal place of business rule] assumes that an employee will locate the employee’s residence as close as possible to his or her workplace.”). Although the distinction has a “mechanically reassuring surface attraction,” this rigid two-personality approach is inappropriate in the case of married taxpayers. 139 See Ovsak, supra note 23, at 440 (“That assumption [that an employee can live close to work] becomes complicated, however, when the employee cannot locate his or her residence near the workplace, such as where the employee’s work-site is physically situated or restricted in such a way that the employee is literally precluded from living in close proximity to the work-site.”); Popkin, supra note 136, at 43–45 (arguing that taxpayers have a third personality concerned with group redistribution of wealth). The distinction is based on the notion of an archetypal single male taxpayer who can always act in his own best interest. 140 See Edward J. McCaffery, Slouching Towards Equality: Gender Discrimination, Market Efficiency, and Social Change, 103 Yale L.J. 595, 653 (1993) (arguing that women can only effectively enter the work force when they begin to act like men). However, the married taxpayer is constrained because he generally seeks the family’s best interest, not just his own. 141Li Li Swain & Steven Garasky, Migration Decisions of Dual-earner Families: An Application of Multilevel Modeling, 28 J. Fam. Econ. Issues 151, 167 (2007) (concluding that “a family’s decision to move is affected by many economic and non-economic factors”). Relevant to the § 162(a)(2) deduction, a married taxpayer chooses the locale of home and of work “to maximize utility for the household, not for the individual.” 142Lueck & Hofmeister, supra note 103, at 4. Factors such as a spouse’s occupation or a community that meets the family needs play an important role in location decisions. 143 See John T. Schuring, Detroit’s Renaissance Zones: The Economics of Tax Incentives in Metropolitan Location Decisions, the Results of the Zones to Date, and Thoughts on the Future, 83 U. Det. Mercy L. Rev. 329, 349 (2006) (stating that a taxpayer’s choice of location includes non-economic factors such as “the quality of educational opportunities, crime, access to cultural resources, and overall municipal services”). Courts too quickly label the decision by married taxpayers to live and work in two different places as a non-deductible “personal” choice, regardless of the circumstances. 144 See Lynch, supra note 15, at 777 (“This evolution [of § 162(a)(2) case law] has entailed a rigid presumption that when spouses work in two places they do so as a matter of personal choice, whatever the facts may be.”).

E. The § 162(a)(2) Marriage Penalty Should Be Rejected Because Married Taxpayers Are the Intended Beneficiaries of § 162(a)(2)

Congress provided the § 162(a)(2) deduction to ease the burden of the taxpayer who must travel for work and to encourage taxpayers to do business. 145 See, e.g., Comm’r v. Flowers, 326 U.S. 465, 478 (1946) (Rutledge, J., dissenting) (“The only stated purpose, and it is clearly stated, not in words of art, is to relieve the tax burden when one is away from home on business.”); Schurer v. Comm’r, 3 T.C. 544, 546 (1944) (noting that § 162(a)(2) will help commercial travelers). A taxpayer who travels for business is burdened because he maintains his place of residence where he incurs one set of non-deductible living expenses and works at another place where he incurs substantial and duplicative living expenses. 146 E.g., In re Bechtelheimer, 239 B.R. 616, 621 (Bankr. M.D. Fla. 1999); see also Brown v. Comm’r, 13 B.T.A. 832, 834 (1928) (“Congress undoubtedly intended that the taxpayer’s personal expenditures in maintaining his usual place of abode should not be deducted, but that all expenditures made by the taxpayer in addition to those amounts if incurred in carrying on a trade or business should be deducted in determining net income.”); supra note 11 and accompanying text. A married taxpayer, in particular, would appear to benefit from the deduction because he is more likely to maintain a place of residence where he incurs substantial, continuous, and duplicative living expenses while traveling. 147 See Van Riper, supra note 96 (“Newly married couples also tend to purchase a house or condo within a couple of years. This allows them to accrue equity—a positive thing—but also forces them to incur big expenses, like household maintenance, homeowners and life insurance, and furniture.”). Indeed, § 162(a)(2) provided significant relief to a married taxpayer prior to the emergence of the marriage penalty. 148 Compare Wallace v. Comm’r, 144 F.2d 407, 411 (9th Cir. 1944) (wife who maintained marital residence in San Francisco obtained deduction for expenses incurred while working in Los Angeles), and Stairwalt v. Comm’r, 11 T.C.M. (CCH) 902 (1952) (wife who maintained marital residence in New York City and worked in Wilmington, Delaware obtained deduction), with Comm’r v. Flowers, 326 U.S. 465, 473 (1946) (taxpayer who maintained personal residence in Jackson, Mississippi, and worked in Mobile, Alabama, was denied deduction because expenses were “incurred solely as the result of the taxpayer’s desire to maintain a home in Jackson while working in Mobile”). Compare Schurer, 3 T.C. at 546–7 (husband who maintained marital residence in Pittsburgh and worked temporarily in different cities obtained deduction), and Dennett v. Comm’r, 7 B.T.A. 1173, 1173–75 (1927) (wife who maintained marital residence in Washington, D.C. and worked temporarily in Seattle obtained deduction), with Hantzis v. Comm’r, 638 F.2d 248, 255 (1st Cir. 1981) (wife who maintained marital residence in Boston and worked one summer in New York City was denied deduction because she had “no business ties to Boston that would bring her within the temporary employment doctrine”). In creating the § 162(a)(2) marriage penalty, 149 See, e.g., York v. Comm’r, 160 F.2d 385 (D.C. Cir. 1947) (disallowing deduction for taxpayer who relocated and moved his family as soon as possible); Hammond v. Comm’r, 20 T.C. 285, 287−88 (1953) (disallowing deduction where both spouses worked in different cities); Johnson v. Comm’r, 8 T.C. 303, 308−09 (1947) (disallowing deduction for taxpayer who was promised by his employer that he would be able to return home the following year). courts have overlooked the fact that the provision exists as a “measure of justice” for the taxpayer who travels for business so that he will not be taxed on costs he incurs to produce his income. 150 In light of the high costs associated with marriage, 151 See Van Riper, supra note 96 (finding that married couples are more likely to incur substantial expenses, like household maintenance, property taxes, and homeowners’ insurance, and single taxpayers who own a home stand to benefit more than married couples because single taxpayers have a lower standard deduction and can obtain the benefit of itemized deductions like mortgage interest and property taxes). “Once children enter the picture, married couples are really in financial trouble: The costs to raise and educate children are staggering.” Id. Married couples with children can spend three times more on monthly living costs than what the childless couple spends. Id. it is particularly egregious when married couples are unable to obtain the benefit of § 162(a)(2). While a single taxpayer often saves nearly five percent of his pay, married taxpayers often spend all of their monthly income on living expenses. 152 Id.; cf. Richard Fry & D’Vera Cohn, Pew Research Center, Women, Men and the New Economics of Marriage 1 (2010) (discussing the economic benefits of marriage). Because of the § 162(a)(2) marriage penalty, married taxpayers continue to incur duplicative living expenses while traveling away from their place of residence, but they are unable to obtain a much-needed and much-deserved deduction.

III. The Primary Victims of the § 162(a)(2) Marriage Penalty

Federal taxation is a “self-executing, nation-wide delivery system for behavioral change.” 153Mann, supra note 122, at 589–90. Policy makers routinely use taxes to encourage taxpayers to engage in certain “socially desirable” activities—such as deductions for charitable contributions and exemptions for earnings on personal savings. 154 E.g., Schoen, supra note 129, at 106. On the state level, legislatures frequently levy taxes to discourage taxpayers from purchasing “socially proscribed” goods and services, such as alcohol, tobacco, and, most recently, sugared beverages. 155 E.g., Anemona Hartocollis, City’s Health Commissioner, in a Medical Journal Article, Calls for a Tax on Soda, N.Y. Times, Apr. 9, 2009, at A22 (citing Kelly D. Brownell et al., The Public Health and Economic Benefits of Taxing Sugar-Sweetened Beverages, 361 New Eng. J. Med. 1599 (2009)). The imposition of these taxes likely has the desired effect of altering the behavior of taxpayers—that is, the taxpayer will make more charitable contributions or purchase less alcohol. 156R. Elder et al., The Effectiveness of Tax Policy Interventions for Reducing Excessive Alcohol Consumption and Related Harms, 38 Am. J. Preventive Med. 217, 217 (2010) (concluding that there is “strong evidence that raising alcohol excise taxes is an effective strategy for reducing excessive alcohol consumption and related harms”). However, sometimes the real effect of a tax is clear only in its application, when certain unexpected consequences emerge. Regardless of their intended effects, taxes inevitably shape behavior, and their power to impact the character of everyday life cannot be overlooked. 157 See, e.g., McCaffery, supra note 16, at 988–1035 (providing “a positive description of the adverse effects on work and family structure generated by current tax law”). It would be a dangerous mistake to blindly apply § 162(a)(2) because “deductions invoke the fundamental issues of tax policy.” 158Dagan, supra note 102, at 244. However, the courts and the IRS have repeatedly made this very mistake by restricting the availability of § 162(a)(2) without considering the implications of their decisions. 159 See, e.g., Mann, supra note 122, at 590 (“The federal tax system influences urban transportation choices by failing to account for negative externality costs, and in some instances, actually subsidizing choices that result in significant environmental and social cost.”); McCaffery, supra note 16, at 1059 (arguing that the interaction of “tax law and real-world conditions pushes towards a traditional, gendered division of labor”). As a result, certain unintended and undesirable consequences have emerged and the two primary victims are dual wage earners and female taxpayers. 160 See Lynch, supra note 15, at 772 (noting that in cases where the husband and wife work in different places but maintain a place of residence together, the court’s denial of the deduction is “[p]erhaps the most galling and high-handed application” of § 162(a)(2)).

A. Courts’ Denials of § 162(a)(2) Deductions Creates an Untenable Catch-22 For Dual Wage Earners

For dual wage earners, relocating the family is not just a matter of inconvenience; rather, one spouse may be required to quit his or her job, potentially causing the family a significant loss of income. 161 See id. Recall the married couple in Hantzis, where the husband continued to work in Boston, the couple’s place of residence, while his wife, unable to find work in Boston, worked in New York for one summer. 162Hantzis v. Comm’r, 638 F.2d 248, 249 (1st Cir. 1981). Despite her permanent return to Boston immediately thereafter, the court determined that the wife’s principal place of business was in New York and denied the § 162(a)(2) deduction on this basis. 163 Id. at 255−56. The court treated her choice not to relocate to New York as purely personal and disregarded the husband’s employment position in Boston, 164 See id. at 257 (“Her expenses associated with maintaining her New York residence arose from personal interests that led her to maintain two residences rather than a single residence close to her work.”). thereby encouraging married taxpayers to behave in a way that is unrealistic, inappropriate, and undesirable.

Although the § 162(a)(2) marriage penalty unfairly denies the deduction to single-earner couples, these taxpayers at the very least are able to avoid the costs of maintaining two homes. 165 See supra Part II.A. Dual wage earners, however, face an untenable choice: both spouses can keep their jobs but continue to incur additional travel and duplicative living expenses, or one spouse can quit his or her job and the couple can relocate. By imposing the § 162(a)(2) marriage penalty, courts encourage a more traditional view of the family—one where the male is the sole wage earner—despite the fact that “more families have two earners for the family to achieve an acceptable living standard.” 166Marjorie E. Kornhauser, Love, Money, and the IRS: Family, Income-Sharing, and the Joint Income Tax Return, 45 Hastings L.J. 63, 66 (1993); see also Steven Greenhouse, Back to the Grind, N.Y. Times, Sept. 19, 2009, at B1 (arguing that the recession is driving highly-educated women who had left work to stay at home with their children to return to the workplace).

B. Female Taxpayers Are The Primary Victims of the § 162(a)(2) Marriage Penalty

The § 162(a)(2) marriage penalty creates a disincentive for women in single-earner households to even enter the workforce 167 See McCaffery, supra note 16, at 994 (“[M]arried women are at the margins of the workforce—in terms of wages, power, and costs—and the tax laws contribute to this marginalization by putting the wife’s income at the margins of the family’s.”). because women are significantly more likely to be the secondary wage earners in a marriage. 168 See, e.g., id. (“Men are more than five times more likely to be the single earner in single-earner households.”). However, married women are increasingly earning the title of the primary bread winner. See, e.g., Fry & Cohn, supra note 152, at 2 (“[O]nly 4% of husbands had wives who brought home more income than they did in 1970, a share that rose to 22% in 2007 . . . .”). In comparison to single women, married women are much more sensitive to tax cuts and tax raises—cut their tax rates, they get jobs, but raise their taxes, they stay home. 169 See, e.g., U.S. Bureau of Labor Statistics, U.S. Dep’t of Labor, Women in the Labor Force: A Databook 1 (2009) [hereinafter Databook] (“Unmarried mothers have higher participation rates [in the labor force] than married mothers. In 2008, 76 percent of unmarried mothers were in the labor force, compared with 69 percent of married mothers.”); Virginia Postrel, The U.S. Tax System Is Discouraging Married Women from Working, N.Y. Times, Nov. 2, 2000, at C2 (arguing that the relationship between taxes and labor-force participation is strongest for married women). A married woman is less likely to work if her potential wages do not exceed the cost of increased taxes and the costs of childcare services, housekeeping, and non-deductible work expenses, such as § 162(a)(2) expenses. 170Davis, supra note 16, at 210.

Even when the wife joins the workforce, the § 162(a)(2) marriage penalty creates a disincentive for the wife to remain in the workforce. In cases where the husband travels, a wife may lose her job because the family is more likely to relocate to the husband’s principal place of business to avoid duplicative living expenses. 171 See William T. Bielby & Denise D. Bielby, I Will Follow Him: Family Ties, Gender-Role Beliefs, and Reluctance to Relocate for a Better Job, 97 Am. J. Soc. 1241, 1243 (1992) (“[T]he labor market is structured such that husbands’ gains from opportunities elsewhere tend to exceed wives’ losses from moving, so tied movers are disproportionately female.”). Even if the family does not relocate, the additional costs of the husband’s travel may nevertheless outweigh the value of the wife’s income and she may be encouraged to quit her job. 172 See Davis, supra note 16, at 210 (“A taxpayer will enter the labor force only if it is to his or her economic advantage.”). On the other hand, even if the wife travels, the family is less likely to relocate to her place of business because her gains from opportunities rarely outweigh her husband’s losses from moving. 173 See Bielby & Bielby, supra note 171, at 1243. And if the family does not relocate, she may have to quit her job because the Hantzis and Flowers decisions prohibit her from receiving any deduction under § 162(a)(2). 174 See supra Part II.C–D. Lastly, a working wife is less likely to meet the overnight requirement in Correll than her working husband. To fulfill her household duties, she is more likely to travel long distances during the day and return to her personal residence at night, 175 See Carol J. Gaumer et al., Enhancing Organizational Competitiveness: Causes and Effects of Stress on Women, 21 J. Workplace Behav. Health 31, 33 (2005) (noting that women assume seventy percent of all household responsibilities). and consequently not qualify for the deduction. 176 See supra Part II.B.

In sum, the § 162(a)(2) marriage penalty creates a disincentive for women to enter into and remain in the work force, thereby encouraging a more traditional view of the family where the husband is the single wage earner and the wife remains at home. 177 See McCaffery, supra note 16, at 1059 (arguing that interaction of “tax law and real-world conditions pushes towards a traditional, gendered division of labor”). Permitting the tax code to encourage this traditional view of the family is not appropriate because married women have become a significant part of the workforce, driven by both personal and economic reasons. 178 See, e.g., U.S. Bureau of Labor Statistics, U.S. Dep’t of Labor, News: Employment Characteristics of Families in 2008, at 2, available at http://www.bls.gov/news.release/archives/famee_05272009.pdf (concluding that in 2008, the husband and wife were both employed in 51.4% of married-couple families and in 62.1% of married-couple families with children); Greenhouse, supra note 166 (arguing that the recession is driving highly-educated women who had left work to stay at home with their children to return to the workplace); McCaffery, supra note 140, at 601 (“[A] massive number of women, especially married women, have entered the paid labor force.”). Moreover, an increasing number of women are self-employed 179 Databook, supra note 169, at 3. and would therefore benefit directly from the deduction if not for the § 162(a)(2) marriage penalty. Women already face substantial hurdles in entering and remaining in the work force, making the § 162(a)(2) marriage penalty even more unacceptable. The wage gap—which still exists for married women and is detrimental to their ability to further their careers—is one such hurdle. 180 See, e.g., McCaffery, supra note 140, at 600 (“Almost all of the existing wage gap is between married men and ever-married women; remove them from the analysis, and women and men receive virtually equal pay.”). Another obstacle is the “marriage penalty” that exists in the progressive tax structure, making a married woman’s entry into the workforce more expensive. 181 See supra note 16 and accompanying text. Additionally, the Earned Income Tax Credit creates its own “marriage penalty” that encourages more single-earner families than dual wage earners. 182 See, e.g., McCaffery, supra note 16, at 995. Lastly, the failure to tax imputed income also contributes to a bias against labor-force participation by secondary earners. 183 See e.g., id. at 1002–03 (“Virtually all of the services that the spouse who stays at home performs constitute untaxed imputed income. . . . By performing these services herself, the wife obtains a tax benefit for the family: it is precisely as though she were receiving a discount of her marginal tax rate.”). In light of married women’s economic and social circumstances, the § 162(a)(2) marriage penalty is egregious.

IV. The Remedy

[T]o judicially innovate a meaning of “home” as the taxpayer’s “place of business . . . ,” would, we think, operate to thwart the obvious purpose of Congress to tax net income. 184Wallace v. Comm’r, 144 F.2d 407, 411 (9th Cir. 1944) (emphasis in original).

This Comment illustrates the existence of the § 162(a)(2) marriage penalty and demonstrates the need for reform. In this Part, this Comment proposes a statutory adoption of a special provision for married couples, whereby “home” is defined as a taxpayer’s “place of residence.” A constitutional challenge based on the application of § 162(a)(2) will likely fail because the Supreme Court has rejected similar challenges to other tax provisions. 185 See Leathers v. Medlock, 499 U.S. 439, 451 (1991) (“Inherent in the power to tax is the power to discriminate in taxation.”); Leo P. Martinez, The Trouble with Taxes: Fairness, Tax Policy, and the Constitution, 31 Hastings Const. L.Q. 413, 427–28 (2004) (commenting that in the area of taxation, “[t]he Equal Protection Clause, the Privileges and Immunities Clause, the dormant Commerce Clause, and other constitutional doctrines have had minimal effect”). Federal legislation is therefore a more appropriate vehicle for change than the Supreme Court because, where notions of fairness and equity are implicated, the Court traditionally has “toss[ed] the ball back to Congress for further play.” 186Martinez, supra note 185, at 445−46 (arguing further that “the Supreme Court has been reluctant to incorporate the notion of fairness in its review of taxation”); see also Katz, supra note 132, at 91−92 (arguing that although education expenses are treated unfairly under the Tax Code, courts have “consistently upheld the validity of these regulations, making it unlikely that any court will declare them void”). This section argues that the place of residence definition is the appropriate solution for the following reasons: (1) it reduces the § 162(a)(2) marriage penalty while retaining certain limits on the deduction; (2) Congress has defined “home” as place of residence for other groups of taxpayers based on their unique characteristics; and (3) Congress has a strong interest in supporting both families and working women. 187 Cf. Gerhardt, supra note 9, at 4 (arguing that defining “home” as “place of residence” is inconsistent with the goals of the statute).

A. The Adoption of “Home” as Place of Residence Will Significantly Decrease the Magnitude of the § 162(a)(2) Marriage Penalty

Under the place of residence definition—instead of the principal place of business rule—married couples will not be sanctioned by courts for refusing to relocate their families each time a new job opportunity arises. 188 See supra Part II.A (arguing that the adoption of the principal-place-of-business rule is particularly harmful to married taxpayers who are not able to relocate). Instead, a married taxpayer will be able to deduct expenses under § 162(a)(2) while traveling away from his personal residence for business purposes. The personal-versus-business distinction will not punish a decision not to relocate that is made in the best interest of the family. 189 See supra Part II.D (demonstrating that Flowers substantially limited the availability of § 162(a)(2) for married taxpayers by focusing on an inappropriate personal-versus-business distinction). By defining “home” in its ordinary way, Congress can avoid inequitable outcomes like Hantzis and Wilbert, which relied on unrealistic expectations of a taxpayer’s ability to relocate for a new or temporary job. 190 See supra Part II.C (discussing why the temporary exception applied by the courts is based on assumptions that are unrealistic for families in today’s economy). Under the proposed statutory change, a dual-earner couple would not have to decide which spouse’s income is more important because both husband and wife could maintain their occupations. 191 See supra Part III.A (explaining why the courts’ denials of § 162(a)(2) for dual wage earners is particularly unjust because it creates an untenable catch-22). Married women also stand to benefit from the change because the potential for § 162(a)(2) gender bias is reduced. 192 See supra Part II.B (arguing that female taxpayers are the primary victims of the § 162(a)(2) marriage penalty). Thus, under the place of residence definition, a married woman would not be as likely to have to follow her husband to his job location, even where he is the primary wage earner. Moreover, this solution remains true to the words of the statute and to Congress’s stated desire to alleviate the burden on the taxpayer whose business requires travel. 193 See supra Part II.E (arguing that the § 162(a)(2) marriage penalty should be rejected because married taxpayers are the intended beneficiaries of § 162(a)(2)).

The proposed change is limited in its potential for abuse because married taxpayers still are subject to both the temporary and the overnight requirements. 194One potential concern is that the overnight requirement may be too restrictive for a married women who tend to undertake more daily commutes. However, the overnight requirement will not be too restrictive because a married woman generally works close to her place of residence and travels significantly less than her husband. The husband is more likely travel; however, both taxpayers will benefit from the deduction. See Bureau of Transp. Statistics, U.S. Dep’t of Transp., Transportation Statistics Annual Report 76 (2005), available at http://www.bts.gov/publications/transportation_statistics_annual_report/2005/html/chapter_02/long_distance_travel_by_women.html (noting that men make almost 8 out of every 10 of long-distance business trips and long distance business travel constitutes 21% of males’ long-distance trips compared with 9% for females). Although not every married taxpayer will obtain the deduction, the proposed change will help to significantly decrease the existing marriage penalty. 195A review conducted for this Comment examined thirty-three case decisions from 1927 to 2008 in which married taxpayers were denied the deduction and concluded that married taxpayers would have obtained the deduction in the majority of these cases (eighteen cases) under the place of residence rule. This resolution represents a compromise between married taxpayers who deserve the deduction and the IRS and courts who want to limit the availability of a deduction of otherwise non-deductible expenses. Additionally, Congress generally prefers “piecemeal and limited changes” to the Tax Code as opposed to complete statutory overhauls that can cost billions of dollars in lost revenues. 196 See Katz, supra note 132, at 91–95 (arguing that educational expenses should be deductible but complete overhaul of the statute is unlikely because substantial deductions would then be available to taxpayers). The potential for abuse is also limited because married taxpayers likely will not make a decision to maintain two homes solely to qualify for the deduction: Taxpayers who receive the deduction will continue to incur the expenses of maintaining two homes and the more intangible cost of being separated from one’s spouse and children.

B. Congress Has Adopted the Place of Residence Rule for Other Groups of Taxpayers

This Comment’s proposal to create a statutory exception for a group of similarly situated taxpayers is not unprecedented. In the case of a taxpayer who has no principal place of business, such as a salesperson or a construction worker, courts define “home” as the taxpayer’s place of residence. 197 See Leach v. Comm’r, 12 T.C. 20, 21 (1949) (allowing deduction for a construction worker who maintained a place of residence in Florence, Alabama, but traveled forty-nine weeks during the year); Gustafson v. Comm’r, 3 T.C. 998, 999−1000 (1944), nonacq. in result, I.R.S. Announcement, 1973-2 C.B. 1, 1973 WL 157513 (allowing deduction for a salesman who claimed that his residence was with his married sister in Greenville, Iowa, and spent fifty-two weeks traveling for business); see also supra note 43 and accompanying text. Courts created this exception because it would be unreasonable to expect a taxpayer who moves from one job to the next to relocate his place of residence each time the job location changes. 198 See Andrews v. Comm’r, 931 F.2d 132, 137 (1st Cir. 1991) (explaining that, with regard to itinerant and temporary workers, “[t]he courts and the Commissioner have agreed that a taxpayer cannot be expected to relocate her primary residence to a place of temporary employment”). To receive the benefit of the exception, the traveling taxpayer must prove that he incurs substantial, duplicative, and continuous expenses at place of residence when he is traveling away from that residence. 199 E.g., In re Bechtelheimer, 239 B.R. 616, 622 (Bankr. M.D. Fla. 1999) (citing James v. United States, 308 F.2d 204, 207 (9th Cir. 1962)). Second, as part of the Military Family Tax Relief Act of 2003, Congress added a new subsection to § 162. 200Military Family Tax Relief Act of 2003, 26 U.S.C. §§ 101−140 (2006). The Act also provides members of the Armed Forces with tax breaks for death benefits, sale of a principal residence, and education costs. Id. §§ 102, 121, 127. Under § 162(p), a member of the armed forces is considered “away from home” under § 162(a)(2) when he is traveling away from his place of residence in connection with his service. 20126 U.S.C. § 162(p) (2006). The statute reads as follows:For purposes of subsection (a)(2), in the case of an individual who performs services as a member of a reserve component of the Armed Forces of the United States at any time during the taxable year, such individual shall be deemed to be away from home in the pursuit of a trade or business for any period during which such individual is away from home in connection with such service.Id. Congress reasoned that the principal place of business definition was inappropriate because of the unique travel demands and financial challenges of military taxpayers. 202149 Cong. Rec. H10364-02, H10370 (daily ed. Nov. 5, 2003) (statement of Sen. Cardin) (“[Congress] should recognize the fact that [military families] have additional expenses that should be treated fairly in our tax code, and . . . I hope the provisions in this bill are a starting point, not an ending point for dealing with these tax issues. So we can try to provide some appropriate relief to our military families.”). Third, although §162(a) deductions are generally not available to persons whose jobs require them to travel or relocate for a period of over one year, Congress carved out an exception for federal employees participating in federal criminal investigations, 20326 U.S.C. § 162(a) (2006) provides, in relevant part:For purposes of paragraph (2) [which allows a taxpayer to deduct traveling expenses incurred while away from home in the pursuit of a trade or business], the taxpayer shall not be treated as being temporarily away from home during any period of employment if such period exceeds 1 year. The preceding sentence shall not apply to any Federal employee during any period for which such employee is certified by the Attorney General (or the designee thereof) as traveling on behalf of the United States in temporary duty status to investigate or prosecute, or provide support services for the investigation or prosecution of, a Federal crime. presumably because such taxpayers travel constantly for work, and it would be unreasonable to expect them to relocate each time the primary location of their jobs changed. Lastly, the Tax Code specifically defines “home” for members of Congress as place of residence because such taxpayers must reside in their home districts and travel to Washington, D.C. for a significant portion of their time. 20426 U.S.C. § 162(a) also provides:For purposes of the preceding sentence [which allows a taxpayer to deduct traveling expenses incurred while away from home in the pursuit of a trade or business], the place of residence of a Member of Congress (including any Delegate and Resident Commissioner) within the State, congressional district, or possession which he represents in Congress shall be considered his home, but amounts expended by such Members within each taxable year for living expenses shall not be deductible for income tax purposes in excess of $3,000. Arguably, married couples are as constrained as many of these taxpayers who have been granted specific exceptions. As in the case of a salesperson or construction worker, it is unreasonable to require a married taxpayer to “carry his home on his back regardless of the fact that he maintains his family at an abode which meets all accepted definitions of ‘home.’” 205Peurifoy v. Comm’r, 358 U.S. 59, 62 (1958) (Douglas, J., dissenting). Like a member of Congress who is unable to relocate, a secondary wage earner may be unable to move her family to where she works because that would require the primary wage earner to quit his job. 206 See Hantzis v. Comm’r, 638 F.2d 248, 249 (1st Cir. 1981) (denying taxpayer deduction for travel expenses that she incurred while working in New York for ten weeks on the grounds that her husband, the primary wage earner, was located in Boston). A non-military married taxpayer may experience financial difficulties similar to those faced by a military family, as did the husband in Wilbert who lost his job and then could not afford to move his family each time he switched temporary jobs. 207 See supra notes 120–29 and accompanying text. However, such strained reasoning is unnecessary—the existing exceptions are relevant because they demonstrate the willingness of Congress and the courts to consider the unique characteristics of a group of taxpayers when § 162(a)(2) is being interpreted unreasonably. The adoption of “home” as place of residence is equally appropriate for married taxpayers because it is more equitable and reasonable in light of the unique characteristics of their demographic. 208 See supra Part II.A–D (arguing that courts and the IRS have created a § 162(a)(2) marriage penalty because a married taxpayer is more likely to be constrained in decision making).

C. The Adoption of “Home” as Place of Residence Comports with Congress’s Interest in Promoting Working Families and Encouraging Women to Work

Congress has demonstrated its interest in promoting working families and encouraging women to work by frequently enacting laws to benefit these two groups. For example, under the Equal Pay Act of 1963, Congress protected female employees by abolishing wage discrimination based on sex. 209Equal Pay Act of 1963, 29 U.S.C. § 206(d) (2006). Under the Family and Medical Leave Act of 1993, Congress protected working families by allowing a qualified employee to take job-protected leave, in part “to balance the demands of the workplace with the needs of families, to promote the stability and economic security of families, and to promote national interests in preserving family integrity.” 210Family and Medical Leave Act of 1993, 29 U.S.C. § 2601(b)(1) (2006). In its findings, Congress recognized that the number of families in which both parents work has increased significantly, and “due to the nature of the roles of men and women in our society, the primary responsibility for family caretaking often falls on women, and such responsibility affects the working lives of women more than it affects the working lives of men.” 21129 U.S.C. § 2601(a) (2006). Most recently, Congress passed the American Recovery and Reinvestment Act of 2009, which includes three personal tax measures aimed at supporting working families: (1) The “Making Work Pay” Tax Credit reduces taxes for working families; (2) an increase in the Earned Income Tax Credit reduces the “EITC marriage penalty;” and (3) an increase in the Child and Dependent Care Tax Credit helps taxpayers with child care expenses. 212American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat 115 (2009). The “Making Work Pay” tax credit will provide up to $500 per person, or $1,000 per working family, and will completely eliminate income taxes for ten million Americans. BarackObama.com, Barack Obama’s Comprehensive Tax Plan, http://www.barackobama.com/pdf/taxes/Factsheet_Tax_Plan_FINAL.pdf (last visited Jan. 27, 2010). The Child and Dependent Care Tax Credit allows low-income families to receive up to a fifty-percent credit for their child care expenses. Id.

Under the place of residence definition, married taxpayers would save costs and avoid relocating their families each time a new job opportunity arose. Married women would also benefit from the change because the potential for the § 162(a)(2) gender bias would be reduced. Congress can continue to support working families by adopting place of residence as “home.”

Conclusion

The failure of the Supreme Court to clarify when a taxpayer is considered “away from home” for purposes of § 162(a)(2) has resulted in a marriage penalty that prevents married taxpayers from receiving an earned deduction. While “[i]t is tempting to conclude that fairness is not relevant to taxation[,] . . . this would contradict the wide acceptance [that] fairness has correctly received in the formulation of tax policy.” 213Martinez, supra note 185, at 445. The marriage penalty created by increasingly narrow interpretations of § 162(a)(2) and the resulting gender bias are unacceptable. Congress legislated in 1921 to relieve the burden on the traveling taxpayer, and Congress must now clarify the statute to provide relief for the intended beneficiaries of the deduction.

Footnotes

1 See James V. Grimaldi & Karl Vick, Palin Billed State for Nights Spent at Home, Wash. Post, Sept. 9, 2008, at A01 (describing expenditures Sarah Palin charged to the State of Alaska).

2 Id. When Palin stayed in Wasilla, she actually worked in nearby Anchorage. Id. (“Palin moved her family to the capital during the legislative session last year, but prefers to stay in Wasilla and drive 45 miles to Anchorage to a state office building.”).

3 Id. The controversy surrounding Palin’s taxes focused specifically on “per diem” payments she received from Alaska. Id. Palin should only be able to omit these employer reimbursements from her gross income if she could legitimately deduct these expenses under § 162(a)(2) of the Tax Code.

4See 26 U.S.C. § 162(a)(2) (2006) (allowing a deduction for “traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business”).

5“Home” is defined as “one’s place of residence,” “a place of origin,” or “the social unit formed by a family living together.” Webster’s Third New International Dictionary of the English Language, Unabridged 1082 (2002). Black’s Law Dictionary defines “home” as “dwelling place,” but then differentiates between “family home” and “tax home.” Black’s Law Dictionary 638, 750, 1502 (8th ed. 2004).

6 See infra Part II.

7 Id.

826 U.S.C. § 262(a) (2006).

9 See, e.g., Nathan R. Gerhardt, Internal Revenue Code § 162(a)(2): Where is “Home?, 2002 Fed. B. Ass’n Sec. Tax’n Rep. 2, 2 (quoting Hantzis v. Comm’r, 638 F.2d 248, 249 (1st Cir. 1981)).

10IRS.gov, Topic 511 - Business Travel Expenses, http://www.irs.gov/taxtopics/tc511.html (last visited Jan. 21, 2010). Under § 162(a)(2), a taxpayer can deduct:1. Travel by airplane, train, bus, or car between your home and your business destination . . . .2. Using your car while at your business destination[.]3. Fares for taxis or other types of transportation between the airport or train station and your hotel, the hotel and the work location, and from one customer to another, or from one place of business to another[.]4. Meals and lodging[.]5. Tips for services related to any of these expenses.6. Dry cleaning and laundry.7. Business calls while on your business trip . . . .8. Other similar ordinary and necessary expenses related to your business travel. These expenses might include transportation to and from a business meal, public stenographer’s fees, computer rental fees, and operating and maintaining a house trailer.Id. Travel expenses do not include everyday non-deductible commuting expenses between a taxpayer’s residence and primary workplace. Mark E. Battersby, On the Road with Uncle Sam: Tax Deductions for Traveling on Business, Pa. Law., Nov.–Dec. 2007, at 50.

11(“The purpose of the ‘away from home’ provision is to mitigate the burden of the taxpayer who, because of the exigencies of his trade or business, must maintain two places of abode and thereby incur additional and duplicate living expenses.”).

12 See James v. United States, 308 F.2d 204, 206 (9th Cir. 1962) (arguing that since a taxpayer must eat and sleep regardless of whether he is traveling, “that portion of the cost of food and lodging while on business travel which would have been incurred even at [his place of residence] is actually a personal living expense”).

13 See id. at 207–08 (“This discriminates against taxpayers whose business does not require travel, and who therefore pay tax upon all of the income which they devote to their personal living expenses. The discrimination may be substantial . . . . [T]he resulting situation is no doubt inequitable.”); Kara Fratto, The Taxation of Professional U.S. Athletes in Both the United States and Canada, 14 Sports Law J. 29, 33 (2007) (“Expenses for travel while away from home are an attractive deduction because they are an ‘above the line’ deduction from gross income to arrive at the adjusted gross income.” (emphasis added)).

14 See infra Part I.

15 See John A. Lynch, Jr., Travel Expense Deductions Under I.R.C. § 162(a)(2)What Part of “Home” Don’t You Understand?, 57 Baylor L. Rev. 705, 712 (2005) (noting that the legislative history surrounding § 162(a)(2) is “scant and ambiguous”).

16 See infra Part II. The inability of married taxpayers to obtain the deduction will be referred to as the “marriage penalty” throughout this Comment. This term does not refer to the marriage penalty that already exists in the Tax Code’s progressive rate structure and the married filing jointly status. See, e.g., Laura Ann Davis, A Feminist Justification for the Adoption of an Individual Filing System, 62 S. Cal. L. Rev. 197, 199 (1988) (providing “a feminist justification for the use of a separate tax filing system” in part because the progressive rate structure and the joint filing system discriminate against married women taxpayers); Edward J. McCaffery, Taxation and the Family: A Fresh Look at Behavioral Gender Biases in the Code, 40 UCLA L. Rev. 983, 989 (1993) (“The most common complaints made in the tax policy and economic literature regarding the biases of the income tax against women concern the system of aggregated spousal rates, or ‘joint filing.’ The system has given rise to the ‘marriage penalty.’” (footnote omitted)).

17 See infra Part III.

18 See infra Part IV.

19 E.g., York v. Comm’r, 160 F.2d 385, 385 (1st Cir. 1947) (taxpayer is a lawyer); Wallace v. Comm’r, 144 F.2d 407, 410 (9th Cir. 1944) (taxpayer is an actress); Johnson v. Comm’r, 115 T.C. 210, 211 (2000) (taxpayer is a ship captain); Horton v. Comm’r, 86 T.C. 589, 589 (1986) (taxpayer is a professional athlete); see also Deblock v. Dep’t of Revenue, 7 Or. Tax 191, 192 (Or. T.C. 1977) (“‘The question has arisen in practically as many contexts as there are occupations in the vast and varied economy of the country.’” (quoting the plaintiffs’ trial memorandum)).

2026 U.S.C. § 162(a) (2006).

21Id. § 162(a)(2). See also IRS.gov, supra note 10 (providing examples of deductible travel expenses while away from home).

22 Deblock, 7 Or. Tax at 192.

23 E.g., Crystal Ovsak, The Not So Slippery Slope: The Eighth Circuit Determines That Employer-Paid Airfare Is Not “Wages” Subject to Withholding Taxes, 77 N.D. L. Rev. 433, 438–41 (2001) (discussing the split of authority in defining “home” as either place of residence or principal place of business).

24 Compare Wallace v. Comm’r, 144 F.2d 407, 410 (9th Cir. 1944) (defining home as taxpayer’s place of residence), and Coburn v. Comm’r, 138 F.2d 763, 764 (2d Cir. 1943) (same), with Hantzis v. Comm’r, 638 F.2d 248, 254 (1st Cir. 1981) (defining home as taxpayer’s principal place of business), and Bixler v. Comm’r, 5 B.T.A. 1181, 1184 (1927) (same).

25 See infra Part I.A.

26 See infra Part I.B. Some courts use different terms to describe a taxpayer’s principal place of business. E.g., Hantzis, 638 F.2d at 249 (defining home as a taxpayer’s “place of employment”); Filler v. Comm’r, 321 F.2d 900, 900 (8th Cir. 1963) (defining home as a taxpayer’s “principal post of duty”).

27 See infra Part I.C.

28 See supra note 5. Courts sometimes use the term “abode” to describe a taxpayer’s personal residence. See, e.g., Henderson v. Comm’r, 143 F.3d 497, 499 (9th Cir. 1998).

29 See, e.g., Rosenspan v. United States, 438 F.2d 905, 912 (2d Cir. 1971) (finding that a taxpayer with no permanent residence cannot obtain the § 162(a)(2) deduction).

30Wallace v. Comm’r, 144 F.2d 407, 410 (9th Cir. 1944). The court further explained:The plain, obvious and rational meaning of a tax statute is always to be preferred to any narrow or hidden sense . . . and while the meaning to be given to terms used will be determined from the character of their use by the legislature in the statute under consideration, words in common use should not be distorted by administrative or judicial interpretation.Id.

31326 U.S. 465, 477 (1946) (Rutledge, J., dissenting) (agreeing with the court of appeals that “if Congress had meant ‘business headquarters,’ and not ‘home,’ it would have said ‘business headquarters’” and stating that “[w]hen it used ‘home’ instead, I think it meant home in everyday parlance, not in some twisted special meaning of ‘tax home’ or ‘tax headquarters.’”).

32 Id. at 474–75.

33138 F.2d 763, 764 (2d Cir. 1943).

34 Id.

35 Id.

36 Id.

37 Id. The court noted that a tax “home” should be limited to a place where the taxpayer is “regularly employed or customarily carries on business.” Id. (emphasis added).

38 Id. at 764–65.

39144 F.2d 407, 411 (9th Cir. 1944).

40 Id. at 408.

41 Id. at 408–09.

42 Id. at 410–11.

43Rev. Rul. 63-82, 1963-1 C.B. 33. An exception to this general rule is that when a taxpayer has no regular principal place of business he can deduct § 162(a)(2) expenses under the place of residence definition; however, if he cannot establish a regular place of residence, the taxpayer is deemed “homeless” and is unable to deduct any expenses. See, e.g., Henderson v. Comm’r, 143 F.3d 497, 499–500 (9th Cir. 1998) (recognizing exception but disallowing deduction because taxpayer did not incur continuous and substantial costs at his place of residence and had no business reason to maintain it); Whitman v. United States, 248 F. Supp. 845, 850 (W.D. La. 1965) (recognizing exception but disallowing deduction because taxpayer’s home “in a real and substantial sense” was his mobile home at each job site).

44 See Bixler v. Comm’r, 5 B.T.A. 1181, 1184 (1927) (“A taxpayer may not keep his place of residence at a point where he is not engaged . . . and take a deduction from gross income for his living expenses while away from home.”).

45 Id. at 1184.

46 Id. at 1182.

47 Id.

48 Id. at 1183.

49 Id. at 1184 (“[T]raveling and living expenses are deductible under the provisions of this section only while the taxpayer is away from his place of business, employment, or the post or station at which he is employed, in the prosecution, conduct, and carrying on of a trade or business.”).

50 Id.

51 Id.

52 Id. (emphasis added).

53 See Comm’r v. Stidger, 386 U.S. 287, 292 (1967) (deciding that it was “not necessary for us to decide here whether this congressional action (or inaction) constitutes approval and adoption of the Commissioner’s interpretation of ‘home’”); Peurifoy v. Comm’r, 358 U.S. 59, 60 (1958) (finding it was “inappropriate to consider such questions”); Comm’r v. Flowers, 326 U.S. 465, 472 (1946) (finding it was “unnecessary here to enter into or to decide this conflict”).

54 Flowers, 326 U.S. at 468. For the first year at issue, the taxpayer spent 203 days in Jackson and 66 days in Mobile and made 33 trips between the two locations. For the second year at issue, the taxpayer spent 168 days in Jackson and 102 days in Mobile and made 40 total trips. Id.

55 Id. at 473.

56 Id. at 470.

57 Id. at 472–73. The Court noted that if the taxpayer had lived and worked in one city, his living expenses and commuting expenses would not be deductible; the nature of the expense did not change simply because the taxpayer had moved farther away. Id. at 473.

58 Id. at 472–73.

59Gerhardt, supra note 9, at 2–3. However, it appears that the taxpayer would have lost under either definition of “home” using the Flowers test because the taxpayer would still fail to meet the third requirement. Joel S. Newman, Federal Income Taxation: Cases, Problems, and Materials 327–28 (3d ed. 2005).

60 Flowers, 326 U.S. at 474–75 (Rutledge, J., dissenting).

61 Id. at 475.

62 Id.

63 Id.

64 Id.

65 Id.

66389 U.S. 299 (1967).

67 Id. at 300.

68 Id.

69 Id. at 302–03.

70 Id. at 303, 307.

71 Id. at 303−04.

72 Id. at 307 (Douglas, J., dissenting).

73 Id. (quoting Correll v. United States, 369 F.2d 87, 89−90 (6th Cir. 1966)).

74358 U.S. 59 (1958).

75 Id. at 59.

76 Id.

77 Id. at 60.

78 Id. (citations omitted).

79 Id. at 60–61. However, if a taxpayer’s employment was “indefinite” or “indeterminate,” expenses are not deductible under § 162(a)(2). Id.

80 Id. at 61.

81 Id. at 60; see also supra note 53.

82Comm’r v. Flowers, 326 U.S. 465, 479–80 (1946) (Rutledge, J., dissenting).

83James v. United States, 308 F.2d 204, 206–07 (9th Cir. 1962); see also Griesemer v. Comm’r, 10 B.T.A. 386, 389 (1928) (“Simply because the amounts in question happen to be ‘living’ expenses in a strict sense does not prevent them from being deductible. . . .”).

84United States v. Correll, 389 U.S. 299, 301–02 (1967) (noting that a taxpayer who receives a deduction for personal living expenses while on business travel receives “something of a windfall”); James, 308 F.2d at 207 (noting that the “discrimination may be substantial” when one taxpayer is allowed the deduction and another taxpayer is not); see also supra note 10.

85This Comment examines § 162(a)(2) cases from 1927 through 2008, specifically decisions where (1) the taxpayer is the husband and primary wage earner and his wife is the secondary wage earner; (2) the taxpayer is the wife and primary wage earner and her husband is the secondary wage earner; (3) the taxpayer is the husband and it is unclear whether he is the primary wage earner; (4) the taxpayer is a single male; and (5) the taxpayer is a single female. Taxpayers who are considered itinerant or “homeless” are outside the scope of this survey.

86 See infra Part I.A–D.

87 See Davis, supra note 16, at 216–18 (noting that the “social and economic reality” that is the traditional justification for joint filing for married couples in part no longer exists); Lynch, supra note 15, at 772–77 (discussing the application of the “tax home doctrine to deny deduction of business related living expenses . . . of married couples where the spouses work in different places”).

88 See supra Part I.B–C.

89 See supra text accompanying notes 45−52.

90 Id.

91 See Bixler v. Comm’r, 5 B.T.A. 1181 (1927) (failing to address the fact that the taxpayer’s family was in Mobile and that the taxpayer returned there for work in 1923).

92 See Ovsak, supra note 23, at 440 (describing problems with the “principal place of business” rule).

93 See Evelyn Addante, Air Travel Market Segments: A New England Case Study, E-C026 Transp. Res. Circular 307, 309−11, 318 (2001), available at http://onlinepubs.trb.org/Onlinepubs/circulars/ec026/ec026.pdf (finding that “[m]en from family households who are traveling on business account for almost one-third of the resident-based air travel market from New England;” whereas business trips by women from a family household “account[] for 18 percent of commercial air trips” in the New England region).

94 See Sam Gould & Larry E. Penley, A Study of the Correlates of the Willingness to Relocate, 28 Acad. Mgmt. J. 472, 472–73 (1985) (finding that length of age, job involvement, and time in area were negatively associated with the willingness to relocate).

95 Id. at 473; see also U.S. Census Bureau, America’s Families and Living Arrangements: 2009, at 1 tbl.C3 (2009), available at http://www.census.gov/population/www/socdemo/hh-fam.html (finding that 66.8% of children under the age of eighteen live with both married parents).

96Tom Van Riper, The Cost of Being Married Versus Being Single, Forbes.com, July 25, 2006, http://www.forbes.com/2006/07/25/singles-marriage-money-cx_tvr_06singles_0725costs.html.

97 See Andrew Oswald, Theory of Homes and Jobs 1 (Sept. 18, 1997) (unpublished manuscript, on file with author) (finding that homeowners in Britain are less likely to move to find a new job and that homeownership therefore can lead to higher unemployment rates).

98 See, e.g., Comm’r v. Flowers, 326 U.S. 465, 475 (1946) (Rutledge, J., dissenting) (noting that the taxpayer had worked in Jackson for thirty years, paid taxes and voted, sent his children to school, owned a house that he had built, and established a law firm).

99United States v. Correll, 389 U.S. 299, 304−05 (1967).

100 Id. at 300.

101 Id. at 302–07.

102Although the taxpayer who returns to his place of residence on a daily basis does not incur additional lodging expenses, he incurs the same meal and commuting costs as the taxpayer who spends the night in a hotel. However, the taxpayer who returns to his place of residence on a daily basis is unable to deduct such costs. See James v. United States, 308 F.2d 204, 206–07 (9th Cir. 1962). For an explanation of the difference between non-deductible commuting expenses and § 162(a)(2) travel expenses, see Tsilly Dagan, Commuting, 26 Va. Tax Rev. 185, 190–92 (2006).

103 See Heather Hofmeister & Detlev Lueck, Who Works Where, and How Does That Affect Family Life? The Impact of Work Location on Family Outcomes in Germany and the United States 9 (unpublished manuscript presented at the 2007 annual meeting of the American Sociological Association in New York, New York) (on file with author) (“Married men’s commutes are longer than single men’s commutes even when income is the same, which suggests that the long commute of married men implies a choice to commute longer in exchange for better residential options, perhaps as a family lifestyle strategy.”).

104 Id.

105 See Correll, 389 U.S. at 299 (denying § 162(a)(2) deductions to a taxpayer who attempted to return daily to his place of residence).

106 Id. at 307 (Douglas, J., dissenting).

107 See Gerhardt, supra note 9, at 1 (“The advent of very efficient means of public transportation allows businessmen to travel great distances as part of their normal business operations.”).

108 See Correll, 389 U.S at 303 (“Any rule in this area must make some rather arbitrary distinctions . . . .”).

109Andrews v. Comm’r, 931 F.2d 132, 137 (1st Cir. 1991) (citing Peurifoy v. Comm’r, 358 U.S. 59 (1958)).

110Hantzis v. Comm’r, 638 F.2d 248 (1st Cir. 1981).

111 Id. at 249.

112 Id.

113 Id.

114 Id.

115 Id.

116 Id. at 255–56

117 E.g., Wilbert v. Comm’r, 553 F.3d 544, 549 (7th Cir. 2009); Henderson v. Comm’r, 143 F.3d 497, 499–500 (9th Cir. 1998); Andrews v. Comm’r, 931 F.2d 132, 136–37 (1st Cir. 1991); Yeates v. Comm’r, 873 F.2d 1159, 1160−61 (8th Cir. 1989); Koepke v. Comm’r, No. 21111-05S, 2008 WL 5100850, at *4 (T.C. Dec. 4, 2008).

118 See Hantzis, 638 F.2d at 249, 255 (describing how taxpayer first attempted to obtain a job in Boston near her place of residence but failed and had to look in other cities); Yeates, 873 F.2d at 1160 (describing taxpayer who repeatedly tried to find a job near his place of residence).

119 Hantzis, 638 F.2d at 249, 255 (describing taxpayer who was only away from her residence for one summer).

120 See Michael Luo, For Growing Ranks of the White-Collar Jobless, Support with a Touch of the Spur, N.Y. Times, Jan. 25, 2009, at A16 (describing the plight of an unemployed former manager who drove seven hours to another city for a job fair because his family’s savings were rapidly dwindling).

121 See Koepke, 2008 WL 5100850, at *3–4 (denying the deduction although “[t]he reality of petitioner’s situation was that he did not know how long he would be in any of the cities in which he worked or where he would go next”).

122 See, e.g., Wilbert, 553 F.3d at 545–50 (explaining that a taxpayer lost his job near his place of residence and was unable to receive the deduction when he could only find temporary work in bigger cities); Bogue v. Comm’r, No. 24574-05, 2007 WL 1712639, at *4 (T.C. June 14, 2007) (same); Farran v. Comm’r, No. 20434-05, 2007 WL 1712715, at *4 (T.C. June 14, 2007) (same); Riley v. Comm’r, No. 21124-05, 2007 WL 1712775, at *4 (T.C. June 14, 2007) (same); Stockwell v. Comm’r, No. 21954-05, 2007 WL 1702608, at *3−4 (T.C. June 13, 2007) (same); see also Roberta F. Mann, On the Road Again: How Tax Policy Drives Transportation Choice, 24 Va. Tax Rev. 587, 607 (2005) (“‘Workforce development and transportation policies are inexorably linked.’” (quoting Angela Glover Blackwell, Promoting Equitable Development, 34 Ind. L. Rev. 1273, 1279 (2001))).

123Luo, supra note 120 (noting that white-collar unemployment rose to 4.6% in December 2008, up from 3% in 2007, and that blue collar unemployment rose to 11.3%).

124 See id. (describing a former professional who shoveled snow when he could not find employment elsewhere).

125 Wilbert, 553 F.3d at 546.

126 Id.

127 Id. at 548–49.

128 See cases cited supra note 122.

129 See Christopher W. Schoen, Note, The Family Savings Account: A Practical Tax Incentive to Stimulate Personal Savings Rates, 4 Hofstra Prop. L.J. 103, 104 (1990) (“For example, due to general inflation during the post-war period, many young families can no longer afford a house in major metropolitan areas.”).

130 See supra Part I.B (discussing the Flowers opinion).

131The personal-versus-business distinction has been discussed in other contexts. See Dagan, supra note 102 (arguing that the personal-versus-business distinction is inadequate in the context of commuting expenses); Marie Louise Fellows, Rocking the Tax Code: A Case Study of Employment-Related Child-Care Expenditures, 10 Yale J.L. & Feminism 307 (1998) (examining the personal-versus-business distinction as applied to child care and suggesting that the anti-subordination principle may prove useful).

132Jay Katz, The Deductibility of Educational Costs: Why Does Congress Allow the IRS to Take Your Education So Personally?, 17 Va. Tax Rev. 1, 9 (1997) (“Occasionally, the Code and the regulations do allow a deduction for some personal expenses if they also meet the requirements for a trade or business deduction under section 162(a).”).

133 See supra notes 8–13 and accompanying text.

134 See supra notes 8–13 and accompanying text.

135 See Dagan, supra note 102, at 199 (“The seemingly technical business–personal distinction does not encompass the full range (and the nuances) of the normative considerations involved, and hence, needs to be substituted by more subtle devices.”).

136 See William D. Popkin, The Taxpayer’s Third Personality: Comments on Redlark v. Commissioner, 72 Ind. L.J. 41, 44 (1996) (finding that the personal-versus-business distinction is stretched to its limits in certain contexts such as commuting expenses).

137 See, e.g., United States v. Gilmore, 372 U.S. 39, 48 (1963) (characterizing an expense as business versus personal depends on the whether the “claim arises in connection with the taxpayer’s profit-seeking activities” (emphasis added)).

138 See, e.g., Andrews v. Comm’r, 931 F.2d 132, 138 (1st Cir. 1991) (“The guiding policy must be that the taxpayer is reasonably expected to locate his ‘home,’ for tax purposes, at his ‘major post of duty’ so as to minimize the amount of business travel away from home that is required; a decision to do otherwise is motivated not by business necessity but by personal considerations, and should not give rise to greater business travel deductions.”); see also Ovsak, supra note 23, at 440 (“The [principal place of business rule] assumes that an employee will locate the employee’s residence as close as possible to his or her workplace.”).

139 See Ovsak, supra note 23, at 440 (“That assumption [that an employee can live close to work] becomes complicated, however, when the employee cannot locate his or her residence near the workplace, such as where the employee’s work-site is physically situated or restricted in such a way that the employee is literally precluded from living in close proximity to the work-site.”); Popkin, supra note 136, at 43–45 (arguing that taxpayers have a third personality concerned with group redistribution of wealth).

140 See Edward J. McCaffery, Slouching Towards Equality: Gender Discrimination, Market Efficiency, and Social Change, 103 Yale L.J. 595, 653 (1993) (arguing that women can only effectively enter the work force when they begin to act like men).

141Li Li Swain & Steven Garasky, Migration Decisions of Dual-earner Families: An Application of Multilevel Modeling, 28 J. Fam. Econ. Issues 151, 167 (2007) (concluding that “a family’s decision to move is affected by many economic and non-economic factors”).

142Lueck & Hofmeister, supra note 103, at 4.

143 See John T. Schuring, Detroit’s Renaissance Zones: The Economics of Tax Incentives in Metropolitan Location Decisions, the Results of the Zones to Date, and Thoughts on the Future, 83 U. Det. Mercy L. Rev. 329, 349 (2006) (stating that a taxpayer’s choice of location includes non-economic factors such as “the quality of educational opportunities, crime, access to cultural resources, and overall municipal services”).

144 See Lynch, supra note 15, at 777 (“This evolution [of § 162(a)(2) case law] has entailed a rigid presumption that when spouses work in two places they do so as a matter of personal choice, whatever the facts may be.”).

145 See, e.g., Comm’r v. Flowers, 326 U.S. 465, 478 (1946) (Rutledge, J., dissenting) (“The only stated purpose, and it is clearly stated, not in words of art, is to relieve the tax burden when one is away from home on business.”); Schurer v. Comm’r, 3 T.C. 544, 546 (1944) (noting that § 162(a)(2) will help commercial travelers).

146 E.g., In re Bechtelheimer, 239 B.R. 616, 621 (Bankr. M.D. Fla. 1999); see also Brown v. Comm’r, 13 B.T.A. 832, 834 (1928) (“Congress undoubtedly intended that the taxpayer’s personal expenditures in maintaining his usual place of abode should not be deducted, but that all expenditures made by the taxpayer in addition to those amounts if incurred in carrying on a trade or business should be deducted in determining net income.”); supra note 11 and accompanying text.

147 See Van Riper, supra note 96 (“Newly married couples also tend to purchase a house or condo within a couple of years. This allows them to accrue equity—a positive thing—but also forces them to incur big expenses, like household maintenance, homeowners and life insurance, and furniture.”).

148 Compare Wallace v. Comm’r, 144 F.2d 407, 411 (9th Cir. 1944) (wife who maintained marital residence in San Francisco obtained deduction for expenses incurred while working in Los Angeles), and Stairwalt v. Comm’r, 11 T.C.M. (CCH) 902 (1952) (wife who maintained marital residence in New York City and worked in Wilmington, Delaware obtained deduction), with Comm’r v. Flowers, 326 U.S. 465, 473 (1946) (taxpayer who maintained personal residence in Jackson, Mississippi, and worked in Mobile, Alabama, was denied deduction because expenses were “incurred solely as the result of the taxpayer’s desire to maintain a home in Jackson while working in Mobile”). Compare Schurer, 3 T.C. at 546–7 (husband who maintained marital residence in Pittsburgh and worked temporarily in different cities obtained deduction), and Dennett v. Comm’r, 7 B.T.A. 1173, 1173–75 (1927) (wife who maintained marital residence in Washington, D.C. and worked temporarily in Seattle obtained deduction), with Hantzis v. Comm’r, 638 F.2d 248, 255 (1st Cir. 1981) (wife who maintained marital residence in Boston and worked one summer in New York City was denied deduction because she had “no business ties to Boston that would bring her within the temporary employment doctrine”).

149 See, e.g., York v. Comm’r, 160 F.2d 385 (D.C. Cir. 1947) (disallowing deduction for taxpayer who relocated and moved his family as soon as possible); Hammond v. Comm’r, 20 T.C. 285, 287−88 (1953) (disallowing deduction where both spouses worked in different cities); Johnson v. Comm’r, 8 T.C. 303, 308−09 (1947) (disallowing deduction for taxpayer who was promised by his employer that he would be able to return home the following year).

150

151 See Van Riper, supra note 96 (finding that married couples are more likely to incur substantial expenses, like household maintenance, property taxes, and homeowners’ insurance, and single taxpayers who own a home stand to benefit more than married couples because single taxpayers have a lower standard deduction and can obtain the benefit of itemized deductions like mortgage interest and property taxes). “Once children enter the picture, married couples are really in financial trouble: The costs to raise and educate children are staggering.” Id. Married couples with children can spend three times more on monthly living costs than what the childless couple spends. Id.

152 Id.; cf. Richard Fry & D’Vera Cohn, Pew Research Center, Women, Men and the New Economics of Marriage 1 (2010) (discussing the economic benefits of marriage).

153Mann, supra note 122, at 589–90.

154 E.g., Schoen, supra note 129, at 106.

155 E.g., Anemona Hartocollis, City’s Health Commissioner, in a Medical Journal Article, Calls for a Tax on Soda, N.Y. Times, Apr. 9, 2009, at A22 (citing Kelly D. Brownell et al., The Public Health and Economic Benefits of Taxing Sugar-Sweetened Beverages, 361 New Eng. J. Med. 1599 (2009)).

156R. Elder et al., The Effectiveness of Tax Policy Interventions for Reducing Excessive Alcohol Consumption and Related Harms, 38 Am. J. Preventive Med. 217, 217 (2010) (concluding that there is “strong evidence that raising alcohol excise taxes is an effective strategy for reducing excessive alcohol consumption and related harms”).

157 See, e.g., McCaffery, supra note 16, at 988–1035 (providing “a positive description of the adverse effects on work and family structure generated by current tax law”).

158Dagan, supra note 102, at 244.

159 See, e.g., Mann, supra note 122, at 590 (“The federal tax system influences urban transportation choices by failing to account for negative externality costs, and in some instances, actually subsidizing choices that result in significant environmental and social cost.”); McCaffery, supra note 16, at 1059 (arguing that the interaction of “tax law and real-world conditions pushes towards a traditional, gendered division of labor”).

160 See Lynch, supra note 15, at 772 (noting that in cases where the husband and wife work in different places but maintain a place of residence together, the court’s denial of the deduction is “[p]erhaps the most galling and high-handed application” of § 162(a)(2)).

161 See id.

162Hantzis v. Comm’r, 638 F.2d 248, 249 (1st Cir. 1981).

163 Id. at 255−56.

164 See id. at 257 (“Her expenses associated with maintaining her New York residence arose from personal interests that led her to maintain two residences rather than a single residence close to her work.”).

165 See supra Part II.A.

166Marjorie E. Kornhauser, Love, Money, and the IRS: Family, Income-Sharing, and the Joint Income Tax Return, 45 Hastings L.J. 63, 66 (1993); see also Steven Greenhouse, Back to the Grind, N.Y. Times, Sept. 19, 2009, at B1 (arguing that the recession is driving highly-educated women who had left work to stay at home with their children to return to the workplace).

167 See McCaffery, supra note 16, at 994 (“[M]arried women are at the margins of the workforce—in terms of wages, power, and costs—and the tax laws contribute to this marginalization by putting the wife’s income at the margins of the family’s.”).

168 See, e.g., id. (“Men are more than five times more likely to be the single earner in single-earner households.”). However, married women are increasingly earning the title of the primary bread winner. See, e.g., Fry & Cohn, supra note 152, at 2 (“[O]nly 4% of husbands had wives who brought home more income than they did in 1970, a share that rose to 22% in 2007 . . . .”).

169 See, e.g., U.S. Bureau of Labor Statistics, U.S. Dep’t of Labor, Women in the Labor Force: A Databook 1 (2009) [hereinafter Databook] (“Unmarried mothers have higher participation rates [in the labor force] than married mothers. In 2008, 76 percent of unmarried mothers were in the labor force, compared with 69 percent of married mothers.”); Virginia Postrel, The U.S. Tax System Is Discouraging Married Women from Working, N.Y. Times, Nov. 2, 2000, at C2 (arguing that the relationship between taxes and labor-force participation is strongest for married women).

170Davis, supra note 16, at 210.

171 See William T. Bielby & Denise D. Bielby, I Will Follow Him: Family Ties, Gender-Role Beliefs, and Reluctance to Relocate for a Better Job, 97 Am. J. Soc. 1241, 1243 (1992) (“[T]he labor market is structured such that husbands’ gains from opportunities elsewhere tend to exceed wives’ losses from moving, so tied movers are disproportionately female.”).

172 See Davis, supra note 16, at 210 (“A taxpayer will enter the labor force only if it is to his or her economic advantage.”).

173 See Bielby & Bielby, supra note 171, at 1243.

174 See supra Part II.C–D.

175 See Carol J. Gaumer et al., Enhancing Organizational Competitiveness: Causes and Effects of Stress on Women, 21 J. Workplace Behav. Health 31, 33 (2005) (noting that women assume seventy percent of all household responsibilities).

176 See supra Part II.B.

177 See McCaffery, supra note 16, at 1059 (arguing that interaction of “tax law and real-world conditions pushes towards a traditional, gendered division of labor”).

178 See, e.g., U.S. Bureau of Labor Statistics, U.S. Dep’t of Labor, News: Employment Characteristics of Families in 2008, at 2, available at http://www.bls.gov/news.release/archives/famee_05272009.pdf (concluding that in 2008, the husband and wife were both employed in 51.4% of married-couple families and in 62.1% of married-couple families with children); Greenhouse, supra note 166 (arguing that the recession is driving highly-educated women who had left work to stay at home with their children to return to the workplace); McCaffery, supra note 140, at 601 (“[A] massive number of women, especially married women, have entered the paid labor force.”).

179 Databook, supra note 169, at 3.

180 See, e.g., McCaffery, supra note 140, at 600 (“Almost all of the existing wage gap is between married men and ever-married women; remove them from the analysis, and women and men receive virtually equal pay.”).

181 See supra note 16 and accompanying text.

182 See, e.g., McCaffery, supra note 16, at 995.

183 See e.g., id. at 1002–03 (“Virtually all of the services that the spouse who stays at home performs constitute untaxed imputed income. . . . By performing these services herself, the wife obtains a tax benefit for the family: it is precisely as though she were receiving a discount of her marginal tax rate.”).

184Wallace v. Comm’r, 144 F.2d 407, 411 (9th Cir. 1944) (emphasis in original).

185 See Leathers v. Medlock, 499 U.S. 439, 451 (1991) (“Inherent in the power to tax is the power to discriminate in taxation.”); Leo P. Martinez, The Trouble with Taxes: Fairness, Tax Policy, and the Constitution, 31 Hastings Const. L.Q. 413, 427–28 (2004) (commenting that in the area of taxation, “[t]he Equal Protection Clause, the Privileges and Immunities Clause, the dormant Commerce Clause, and other constitutional doctrines have had minimal effect”).

186Martinez, supra note 185, at 445−46 (arguing further that “the Supreme Court has been reluctant to incorporate the notion of fairness in its review of taxation”); see also Katz, supra note 132, at 91−92 (arguing that although education expenses are treated unfairly under the Tax Code, courts have “consistently upheld the validity of these regulations, making it unlikely that any court will declare them void”).

187 Cf. Gerhardt, supra note 9, at 4 (arguing that defining “home” as “place of residence” is inconsistent with the goals of the statute).

188 See supra Part II.A (arguing that the adoption of the principal-place-of-business rule is particularly harmful to married taxpayers who are not able to relocate).

189 See supra Part II.D (demonstrating that Flowers substantially limited the availability of § 162(a)(2) for married taxpayers by focusing on an inappropriate personal-versus-business distinction).

190 See supra Part II.C (discussing why the temporary exception applied by the courts is based on assumptions that are unrealistic for families in today’s economy).

191 See supra Part III.A (explaining why the courts’ denials of § 162(a)(2) for dual wage earners is particularly unjust because it creates an untenable catch-22).

192 See supra Part II.B (arguing that female taxpayers are the primary victims of the § 162(a)(2) marriage penalty).

193 See supra Part II.E (arguing that the § 162(a)(2) marriage penalty should be rejected because married taxpayers are the intended beneficiaries of § 162(a)(2)).

194One potential concern is that the overnight requirement may be too restrictive for a married women who tend to undertake more daily commutes. However, the overnight requirement will not be too restrictive because a married woman generally works close to her place of residence and travels significantly less than her husband. The husband is more likely travel; however, both taxpayers will benefit from the deduction. See Bureau of Transp. Statistics, U.S. Dep’t of Transp., Transportation Statistics Annual Report 76 (2005), available at http://www.bts.gov/publications/transportation_statistics_annual_report/2005/html/chapter_02/long_distance_travel_by_women.html (noting that men make almost 8 out of every 10 of long-distance business trips and long distance business travel constitutes 21% of males’ long-distance trips compared with 9% for females).

195A review conducted for this Comment examined thirty-three case decisions from 1927 to 2008 in which married taxpayers were denied the deduction and concluded that married taxpayers would have obtained the deduction in the majority of these cases (eighteen cases) under the place of residence rule.

196 See Katz, supra note 132, at 91–95 (arguing that educational expenses should be deductible but complete overhaul of the statute is unlikely because substantial deductions would then be available to taxpayers).

197 See Leach v. Comm’r, 12 T.C. 20, 21 (1949) (allowing deduction for a construction worker who maintained a place of residence in Florence, Alabama, but traveled forty-nine weeks during the year); Gustafson v. Comm’r, 3 T.C. 998, 999−1000 (1944), nonacq. in result, I.R.S. Announcement, 1973-2 C.B. 1, 1973 WL 157513 (allowing deduction for a salesman who claimed that his residence was with his married sister in Greenville, Iowa, and spent fifty-two weeks traveling for business); see also supra note 43 and accompanying text.

198 See Andrews v. Comm’r, 931 F.2d 132, 137 (1st Cir. 1991) (explaining that, with regard to itinerant and temporary workers, “[t]he courts and the Commissioner have agreed that a taxpayer cannot be expected to relocate her primary residence to a place of temporary employment”).

199 E.g., In re Bechtelheimer, 239 B.R. 616, 622 (Bankr. M.D. Fla. 1999) (citing James v. United States, 308 F.2d 204, 207 (9th Cir. 1962)).

200Military Family Tax Relief Act of 2003, 26 U.S.C. §§ 101−140 (2006). The Act also provides members of the Armed Forces with tax breaks for death benefits, sale of a principal residence, and education costs. Id. §§ 102, 121, 127.

20126 U.S.C. § 162(p) (2006). The statute reads as follows:For purposes of subsection (a)(2), in the case of an individual who performs services as a member of a reserve component of the Armed Forces of the United States at any time during the taxable year, such individual shall be deemed to be away from home in the pursuit of a trade or business for any period during which such individual is away from home in connection with such service.Id.

202149 Cong. Rec. H10364-02, H10370 (daily ed. Nov. 5, 2003) (statement of Sen. Cardin) (“[Congress] should recognize the fact that [military families] have additional expenses that should be treated fairly in our tax code, and . . . I hope the provisions in this bill are a starting point, not an ending point for dealing with these tax issues. So we can try to provide some appropriate relief to our military families.”).

20326 U.S.C. § 162(a) (2006) provides, in relevant part:For purposes of paragraph (2) [which allows a taxpayer to deduct traveling expenses incurred while away from home in the pursuit of a trade or business], the taxpayer shall not be treated as being temporarily away from home during any period of employment if such period exceeds 1 year. The preceding sentence shall not apply to any Federal employee during any period for which such employee is certified by the Attorney General (or the designee thereof) as traveling on behalf of the United States in temporary duty status to investigate or prosecute, or provide support services for the investigation or prosecution of, a Federal crime.

20426 U.S.C. § 162(a) also provides:For purposes of the preceding sentence [which allows a taxpayer to deduct traveling expenses incurred while away from home in the pursuit of a trade or business], the place of residence of a Member of Congress (including any Delegate and Resident Commissioner) within the State, congressional district, or possession which he represents in Congress shall be considered his home, but amounts expended by such Members within each taxable year for living expenses shall not be deductible for income tax purposes in excess of $3,000.

205Peurifoy v. Comm’r, 358 U.S. 59, 62 (1958) (Douglas, J., dissenting).

206 See Hantzis v. Comm’r, 638 F.2d 248, 249 (1st Cir. 1981) (denying taxpayer deduction for travel expenses that she incurred while working in New York for ten weeks on the grounds that her husband, the primary wage earner, was located in Boston).

207 See supra notes 120–29 and accompanying text.

208 See supra Part II.A–D (arguing that courts and the IRS have created a § 162(a)(2) marriage penalty because a married taxpayer is more likely to be constrained in decision making).

209Equal Pay Act of 1963, 29 U.S.C. § 206(d) (2006).

210Family and Medical Leave Act of 1993, 29 U.S.C. § 2601(b)(1) (2006).

21129 U.S.C. § 2601(a) (2006).

212American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat 115 (2009). The “Making Work Pay” tax credit will provide up to $500 per person, or $1,000 per working family, and will completely eliminate income taxes for ten million Americans. BarackObama.com, Barack Obama’s Comprehensive Tax Plan, http://www.barackobama.com/pdf/taxes/Factsheet_Tax_Plan_FINAL.pdf (last visited Jan. 27, 2010). The Child and Dependent Care Tax Credit allows low-income families to receive up to a fifty-percent credit for their child care expenses. Id.

213Martinez, supra note 185, at 445.

J.D., With Honors, Emory University School of Law, Atlanta, Georgia (2010); B.B.A., Emory University (2005). I would like to thank Professor Dorothy A. Brown for her guidance and support, as well as members of the Emory Law Journal for their assistance in writing this Comment. I would also like to thank my family and friends for their endless encouragement and support.