John J. TYNE, Jr., Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent, 385 F.2d 40

DUFFY, Senior Circuit Judge. This is a petition by taxpayer to review a decision of the Tax Court. The question at issue is whether the taxpayer can deduct as an ordinary and necessary business expense, within the meaning of

Section 162, Internal Revenue Code of 1954, the cost of transporting his trade tools in his automobile and truck to his place of employment. The taxpayer claims the deduction in the taxable years 1957, 1958 and 1960. It is undisputed that he transported approximately 200 pounds of tools which were essential in fulfilling his job requirements. During 1957, 1958 and 1960, petitioner was employed by several companies involved in heavy construction and road-building work. Taxpayer was an apprentice operating engineer.

Although petitioner worked principally as a machine oiler, he, at times, worked as a machine operator and as a pump operator. He never left his tools at job sites over night for fear the tools might be stolen. Petitioner’s on-the-job daily travel requirements varied from short distances to distances in excess of five miles. On his income tax return for the taxable years in question, petitioner claimed, as a business deduction, 100% of his automobile and truck expenses, including depreciation of his truck in 1958 and 1960.

The Tax Court allowed 20% of the claimed expenses as being attributable to on-the-job requirements. It disallowed the balance by finding that since the taxpayer was a commuter while using his automobile to get to work on each of the days involved, the transportation expenses involved constituted in toto nondeductible expenses. The Tax Court relied upon its prior decision in Sullivan v. Commissioner, 45 T.C. 217 (1965). The Commissioner of Internal Revenue contends that the Tax Court applied an erroneous legal test in this case.

The Commissioner argues that the deduction of transportation expense which serves a dual purpose, one, commuting and two, business such as transportation of tools, should depend on which purpose is primary. ■ The Commissioner argues for the rule that such dual purpose transportation expenses can be deducted only upon a showing that they were occasioned primarily by the necessity to transport the taxpayer’s tools. It is, of course, well established that commuting expenses — the cost of traveling to and from home to an established place of business — are non-deductible personal expenses.

Commissioner of Internal Revenue v. Flowers, 326 U.S. 465, 66 S.Ct. 250, 90 L.Ed. 203. The difficulty arises when there is a dual personal-business purpose for the expenditure. When that occurs, the Commissioner has ruled that a deduction will be allowed only if the expenditure is incurred primarily for a

Section 162 business purpose. To illustrate, the Commissioner has ruled in Rev. Rule 63-100 (1963-1) CUM. Bull. 34, that a musician may deduct the cost of using his car to transport his musical instruments between home and the business only if the expense is occasioned primarily by business necessity. On the other hand, petitioner contends that 100% of his expense should be deductible because his job required him to have his tools with him daily. Since the tools were on the job only because taxpayer incurred automobile and truck expense to transport them, the expense ought to be deductible.

Taxpayer’s argument goes too far since it would impliedly overrule Commissioner of Internal Revenue v. Flowers, supra. In Sullivan v. Commissioner of Internal Revenue, supra, the Court of Appeals recognized the dual purpose in incurring transportation expenses in a case such as ours. However, it rejected the test urged by the Commissioner and also that urged by the taxpayer. It chose to apply what has been called the allocation rule.

The Court stated at page 1008, “Even if taxpayer would have driven to and from work had it not been necessary to transport his tools, he ought to be allowed to deduct that portion of his reasonable driving expenses which is allocable to the transportation of tools.” If storage were feasible, he would only be allowed ta deduct its cost. Both parties to the case at bar strongly urge that the allocation rule should not be followed; that it would require difficult ad hoc allocations between transportation expenses attributable to carrying the taxpayer’s person and the transportation of the tools of his trade.

The Commissioner urges the practical impossibility of implementing the allocation test laid down in the Sullivan case. It seems clear to us that a taxpayer should not be permitted to evade the Commuter Rule by throwing a hammer, wrench and a screwdriver into his automobile as he drives to work.

Yet, if the taxpayer is required by his type of work to bring with him daily, tools of such size and weight that they cannot be readily carried by the taxpayer, we agree with the Second Circuit Court of Appeals in Sullivan — “Even if taxpayer would have driven to and from work had it not been necessary to transport his tools, he ought to be allowed to deduct that portion of his reasonable driving expenses which is allocable to the transportation of tools.” Granted such allocations cannot be made with a mathematical nicety.

However, we doubt the argument of both the Commissioner and taxpayer that it is practically impossible to make such an allocation. It seems to us that such an allocation should not be more difficult than decisions with reference to musicians taking musical instruments to their work in automobiles. We think such a rule will operate more fairly than putting the burden on a taxpayer to prove what the Commissioner might decide is the primary purpose of the transportation of tools by a taxpayer. The allocation rule was first adopted by the Tax Court.

Charles Crowther, 28 T.C. 1293 (1957), rev’d on another ground, 269 F.2d 292 (9 Cir., 1959); Francis Eaton, 17 T.C.M. 60 (1958). In Sullivan v. Commissioner, 45 T.C. 217 (1965), the Tax Court reversed itself, but the Second Circuit reversed the Tax Court, 368 F.2d 1007, and reinstated the old allocation rule. The judgment of the Tax Court is reversed and remanded with instructions to the Commissioner to determine the allocation of the proportion of driving expenses which is a reasonable cost of doing business under

Section 162. Reversed and remanded. . The decision of the Tax Court in Sullivan was reversed by the United States Court of Appeals for the Second Circuit. Sullivan v. Commissioner of Internal Revenue, 2 Cir. (1966), 368 F.2d 1007. . The first holding of the Second Circuit’s Sullivan decision was that the taxpayer may deduct 100% of liis reasonable driving expenses if the taxpayer would not have driven his automobile to work but for the necessity of bringing his tools with him.