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employee does significant work for the employer or the employer
conducts a significant portion of its business at the living
quarters. See Johnson v. Commissioner, supra. For example,
housing located 12 miles from the employee’s worksite on the
trans-Alaska pipeline was not integral to the employer’s business
where the employee only prepared some daily inspection reports at
home. Id. Also, proximity is not the standard. Living quarters
as close as a mile from the worksite are not integral to the
employer’s business even if the employee is periodically on call
to perform work for the employer unless the employee performs
significant work for the employer at the living quarters. See
Dole v. Commissioner, supra.
The homes where petitioners and their families lived in
Alice Springs were 22 miles from the defense facility. The
housing was in a separate town on a public road in the same areas
where nonbase employees lived. No TRW activities occurred at the
housing petitioners occupied in Alice Springs. No petitioner
performed any work for TRW at his or her home in Alice Springs.
Accordingly, the housing in Alice Springs was not an integral
part of TRW’s business and having petitioners occupy those
particular homes served no important TRW business functions.
We conclude that the living quarters TRW provided
petitioners were not integral to TRW’s business. The living
quarters therefore do not qualify for the exclusion under section
119, and petitioners are not entitled to exclude the costs of
their lodging from their income for the relevant years.
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