O'Hare v. Commissioner

James M. O'Hare, Petitioner v. Commissioner of Internal Revenue, Respondent O'Hare v. Commissioner Docket No. 2953-69SC United States Tax Court 54 T.C. 874; 1970 U.S. Tax Ct. LEXIS 151; April 28, 1970, Filed *151 Decision will be entered for the respondent. Held: 1. The petitioner, a physician, may not deduct the costs incurred by him in traveling between his home and the hospital where he was employed, in connection with his extra duty at the hospital. 2. Gift certificates transferred by the petitioner to several physicians in appreciation for services performed for him and his family are not deductible as medical expenses. James M. O'Hare, pro se. Joel Gerber, for the respondent. Simpson, Judge. SIMPSON *874 *152 The respondent determined a deficiency in the petitioner's 1966 income tax in the amount of $ 153.11. The issues for decision in this case are: (1) Whether the petitioner is entitled to deduct expenses incurred by him in traveling between his home and his place of employment for special duty; and (2) whether the petitioner may deduct as medical expenses the value of certain gift certificates transferred by him to doctors who had provided him and his family with medical services. FINDINGS OF FACT Some of the facts have been stipulated, and those facts are so found. The petitioner, James M. O'Hare, had his legal residence in Quincy, Mass., at the time the petition was filed in this case. He and his wife, Margaret M. O'Hare, filed their 1966 joint Federal income tax return with the district director of internal revenue in Boston, Mass. During 1966, the petitioner was employed as a staff physician at the Veterans' Administration Hospital in West Roxbury, Mass. Along with two other doctors, he cared for approximately 120 paraplegic patients. The terms of the petitioner's employment required him to be on call 7 days a week, 24 hours a day. During 1966, his regular duty hours were from*153 8:30 a.m. to 4:30 p.m., Monday through Friday. In addition, he was specifically required to work every third evening and every third weekend on "extra-duty patient care." The petitioner received a fixed annual salary and was aware that the fixed amount included compensation for his regular hours and his extra duty. *875 During 1966, the petitioner made 160 round trips from his residence to the hospital to fulfill his responsibility for "extra-duty patient care." The distance of each round trip was approximately 36 miles, and the petitioner computed his automobile expenses in making such trips at $ 576. During 1966, the petitioner purchased $ 120 worth of gift certificates from various retail stores and transferred them to seven doctors who had provided professional services for him and his family. The value of the services rendered substantially exceeded the amount of the gift certificates. In accordance with the customary practice among doctors, the petitioner was not billed for any of such services and was not expected to pay for them in any way. However, because of the nature of his practice, the petitioner was unable to provide referrals or reciprocal services to the *154 doctors who cared for him and his family, and therefore, he gave them the gift certificates as tokens of his appreciation for their services. OPINION The first issue for decision is whether the petitioner may deduct his cost of traveling from his residence to his place of employment for his extra duty. The petitioner does not contend that his commuting expenses in connection with his regular-duty hours are deductible; however, he argues that his traveling expenses in connection with his extra duty had a business purpose and should therefore be deductible under section 162 of the Internal Revenue Code of 1954. 1 It is well established that amounts incurred in traveling between one's residence and regular place of employment are nondeductible personal expenses of commuting. Secs. 1.162-2(e), 1.262-1(b)(5), Income Tax Regs.; Commissioner v. Flowers, 326 U.S. 465 (1946). Although commuting expenses are incurred in*155 order to reach one's place of employment, they are treated as nonbusiness expenses since their amount depends upon the place where one chooses to reside -- a choice which results from personal and family considerations. This reasoning applies equally to the expenses of commuting for regular duty or for extra duty. Margaret Galotta Sheldon, 50 T.C. 24 (1968); Lenke Marot, 36 T.C. 238 (1961). We recognize that to make the additional trips required by his extra-duty care of the patients imposed a hardship upon the petitioner, and we appreciate the fact that he and his colleagues were willing to perform such services. However, if the petitioner is to receive any relief for these additional services, it must come in the form of additional compensation or allowances from the Veterans' Administration. The circumstances do not warrant or justify *876 relief in the form of judicially determined exceptions to the general rules of taxation. We must apply the general rules and hold that all the petitioner's commuting expenses are personal and not deductible. The second issue for decision is whether the petitioner may deduct*156 as medical expenses, under section 213, the value of gift certificates transferred by him to several doctors who performed services for him and his family. Section 213(a)(1) provides for the deduction of expenses for medical care. Medical care is defined in section 213(e)(1) as amounts paid for various forms of medical treatment. In our view, the gift certificates were not transferred as payments for medical services within the meaning of section 213. In our society, there are many occasions when one person performs a kindness for another without any expectation of receiving compensation or other reward for his services; he is motivated primarily by the wish to bestow a favor upon another person. Yet, the beneficiary may wish to express his thanks in some tangible manner. So-called gifts are often made under such circumstances, and both the donor and the donee consider them to be gifts -- the donor does not consider that he has paid value for services received, and the donee does not treat the payment as compensation or consideration for services rendered. Such situations are distinguishable from those in which an employee receives a bonus since the business has prospered, in*157 which a waiter receives a tip for having rendered good service, in which a widow is paid an allowance by the employer of her deceased husband in recognition of his services to the employer, or in which in return for a substantial business favor, there is a so-called gift of valuable property. Commissioner v. Duberstein, 363 U.S. 278 (1960). Those are arrangements for compensation, and they are treated as such for tax purposes. However, in applying the tax law, we should recognize the essential difference between those situations and the kind that we have before us. The petitioner was not billed and was not expected or obligated to pay for any of the services rendered him and his family, and the payments he did make were significantly less than the value of such services. According to his testimony, the petitioner gave the gift certificates as only token remuneration for the services performed. In light of these facts, we have concluded that the payments were motivated by the petitioner's wish to demonstrate his appreciation to the doctors whom he and his family had consulted. As such, the payments were to satisfy the personal desires of the *158 petitioner to make a gift, and were not paid for medical care within the meaning of the statute. Accordingly, such payments are not deductible. Sec. 262. Decision will be entered for the respondent. Footnotes 1. All statutory references are to the Internal Revenue Code of 1954.↩