Leyh v. Commissioner: a clean log earns benefit of the doubt

By Max Medvedev · 6 Aug 2026

Leyh v. Commissioner, T.C. Summ. Op. 2015-27, is a taxpayer win. A clean log kept as the work happened earned the taxpayer the benefit of the doubt on travel time the log had left out. The lesson is not really about travel: doubt gets resolved in favor of a record that has already earned it.

What happened

The participation record was a log kept in real time, and it was clean. Travel time was omitted from it. The court gave the taxpayer the benefit of the doubt on that omission, and the taxpayer won.

One structural note before anything else. This is a Summary Opinion, issued under the small tax case procedures of IRC §7463 — and §7463(b) provides that such opinions are not treated as precedent for any other case. Leyh is not authority anyone can lean on. It is evidence of how a judge reads a credible record, which is a different and still valuable thing.

What the court held

The holding worth extracting is about the direction doubt runs.

Every participation case contains gaps. Nobody's record is complete: an entry gets missed, a duration is approximate, a category is arguable. What changes between cases is what the court does at those gaps. In Leyh the log had earned enough credibility that the missing piece was resolved the taxpayer's way.

Compare the other direction. In Hairston, T.C. Memo 2019-104, padding — trivial one-hour entries, vague supervisory descriptions, weekly rather than daily logging — tainted the whole log, not merely the padded lines. In Mirch, T.C. Memo 2025-128, roughly 920 claimed hours collapsed to credible participation under 100 once the flat seven-hour turnovers and the 744.5 on-call hours came out. In Penley, T.C. Memo 2017-65, the whole total went.

That is the same mechanism as Leyh, run in reverse. A court reads a log as a single object and forms a view of the person who kept it. Once that view exists, it applies to every ambiguous line.

The tell

The tell in Leyh is that the win came from a category the taxpayer never needed to argue about.

Travel is the weakest ground in this area. The Passive Activity Loss Audit Technique Guide tells examiners travel time "generally should not be considered." Lucero, T.C. Memo 2020-136, disallowed it for a distant, manager-run rental and the participation case failed. Being on call fails too, in Moss v. Commissioner, 135 T.C. 365 (2010) and again in Mirch: being available is not work performed.

So the taxpayer in Leyh got a favorable answer on the shakiest possible category, and got it because everything else in the file was solid. Reversed, that is the operating rule for anybody keeping a log today. The fragile hours are the ones you win only when you did not need them. A position whose margin depends on travel time, on-call time, or investor-type reading of statements is a position built on the categories courts remove first.

What this means for your records

The practical rule: build the margin out of hours nobody has to interpret, and let the fragile ones be surplus.

That has a specific shape. The 100-hour route in Reg. §1.469-5T(a) is a comparison — more than 100 hours and more than any other single individual — so the margin is the distance between your countable hours and the highest single vendor's. A three-hour lead built partly on drive time is not a margin. Cleaning turnovers you performed, guest messages you answered, and supply runs with receipts attached are.

A log kept as the work happens is what produces that surplus. Entries are dated the day the work occurred, sized to the task, and evidence-backed only when they cite an outside record — a message thread, an invoice, a receipt; a bare reminder is refused as evidence. Travel entries are flagged rather than silently counted, so the position never rests on them without the owner knowing. When more than half of the countable minutes are still estimates, the log says so. And when the lead over the highest other individual falls under ten hours while the year depends on clearing the 100-hour floor, that thin margin is raised as a finding — because a race won by a few contested hours is a race a single disallowed category loses.

Retention matters here too, since credibility is only useful if the record still exists: participation logs are worth keeping seven years, against an ordinary three-year statute of limitations and six years where income is understated by more than 25%.

Where this fits

Leyh is the mirror image of the losing cases. Same regulation, same kind of gap, opposite result — because of what the log had already demonstrated by the time anyone looked at it. The rest of the method is in the hub guide on how to prove short-term rental hours.

To see how much margin a given year actually has before any fragile category is counted, run the hours and reservation mix through the estimator — it applies all seven tests in Reg. §1.469-5T(a) and shows the lead over the highest other person, with the rule cited behind each number.