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20 houses. All of petitioners’ neighbors worked at the base.
The closest gas station was 1 mile away, and the closest grocery
store was farther away in town.
Petitioners did not pay any rent or utility expenses with
respect to the lodging.4 Generally, Mr. Abeyta would commute by
public bus from Alice Springs to the base. On occasion, he would
commute by his own privately owned automobile to the base or to
offsite locations for meetings.
For the taxable year 2000, the Department of the Air Force
issued to Mr. Abeyta a Form 1099-MISC, Miscellaneous Income,
reporting $7,506 as the value of lodging furnished to Mr. Abeyta.
Petitioners timely filed a 2000 Federal income tax return,
which their certified public accountant of 19 years prepared.5
In preparing this return, petitioners submitted the raw data to
their accountant; petitioners met with their accountant to “go
through the details and figure out what we’re going to put down
on our taxes”; and petitioners paid their accountant to research
and advise them concerning excluding the value of lodging
4 We note that utilities furnished by the employer to make
a lodging habitable constitute lodging for purposes of sec. 119.
Turner v. Commissioner, 68 T.C. 48, 50 (1977); accord Rev. Rul.
68-579, 1968-2 C.B. 61. Respondent, however, did not raise the
issue whether the value of utilities furnished to Mr. Abeyta
should be included in petitioners’ gross income. Therefore, we
need not address the matter.
5 In 1998, petitioners provided their accountant with a
copy of the closing agreement.
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