• Key point. Expenses incurred in commuting to and from work are a nondeductible personal expense. This includes expenses incurred by ministers between their home and a pastoral assignment.
The Tax Court ruled that miles driven by a minister from his home to a pastoral call are commuting miles that cannot be deducted or reimbursed as a business expense. A taxpayer performed services as a minister for approximately 6 months each year, during the winter and spring. He was not affiliated with a particular church. His ministerial activity consisted of serving as a chaplain to a mobile home community located approximately 35 miles from his home in Florida. That community consisted of people the minister referred to as "snowbirds," which he defined as people from the northern United States who came to Florida each year for the winter and spring months. The minister conducted services there twice weekly. He also taught a weekly class at a local church and occasionally preached at various churches. On his federal income tax returns for 1993 and 1994, the minister claimed deductions for the business use of his car. The IRS audited the minister, and reduced the minister's car expense deduction. The IRS claimed that the minister improperly treated miles driven from his home to pastoral responsibilities as business miles rather than as nondeductible commuting miles. The minister appealed to the Tax Court.
The Tax Court began its opinion by noting that "as a general rule, the expenses of traveling between one's home and his place of business or employment constitute commuting expenses which are nondeductible, personal expenses." The court acknowledged that a taxpayer's cost of transportation "between his residence and local job sites may be deductible if his residence serves as his principal place of business and the travel is in the nature of normal and deductible business travel." In other words, if the minister's principal place of business had been his home office, then all miles that he drove from home to any pastoral assignment would qualify as a deductible business expense. However, the court concluded that the minister did not qualify for this rule since his home office was not his principal place of business. Therefore, miles driven from his home to pastoral assignments and meetings were nondeductible personal expenses rather than deductible business expenses.
Application. The vast majority of ministers do not qualify for a home office deduction. This case demonstrates that these ministers cannot deduct the miles they drive from their home to a pastoral call, assignment, or meeting. This includes trips from home to the hospital, an evening meeting at church, or to visit a church member. Since these trips are personal commuting rather than business-related, it is important to understand that ministers cannot claim a deduction for these miles on their tax return, and churches must not reimburse such trips under an accountable expense reimbursement arrangement.
Some ministers do have a home office that qualifies for a home office deduction. This is more likely now than in the past because of a liberalization in the law that took effect this year. Such ministers can treat any trip from their home to a pastoral call, assignment, or meeting as a business trip. But note that not every home office qualifies. It must be used regularly and exclusively as a minister's principal place of business. And, in the case of an employee, it must be "for the convenience of the employer." In general, this means that the minister does not have an office that is available at the church. Walter R. Strohmaier v. Commissioner, 113 TC 250 (1999).
