F. E. Smith and v. K. Smith v. Neal S. Warren, District Director of Internal Revenue Service

Appellant pilots ships in the Puget Sound area, including Seattle and various other ports located from one hundred miles north to sixty miles south of that city. He used his personal automobile in traveling between his residence and the waterfronts of these ports to undertake pilotage assignments and to return to his home from such assignments. He contends that the costs of all such transportation were ordinary and necessary business expenses deductible under section 162(a) of the Internal Revenue Code of 1954, 26 U.S.C. § 162 (a) (1964).

The District Director allowed appellant to deduct costs incurred in traveling between his home and piers other than those located in Seattle, and in traveling from one work assignment to another. However, he disallowed costs incurred by appellant in traveling between appellant’s home and the Seattle waterfront, on the ground that Seattle was appellant’s principal place of employment and costs of transportation between that city and his residence were therefore “commuting” costs, which have long been classified as non-deductible under section 262 of the Code, 26 U.S.C. § 262 (1964), as “living and personal expenses lacking the necessary direct…