Help with Employee Business Expenses

[David1980]

I don't even think you can or need to get to that test. She has a regular job, so unless there's other missing info, that regular job would be her tax home. Also, based on what we know so far, this isn't a temporary assignment.

Yes, once it was established that she had a second job the tax home could be established. Up until that point, we were basically at step 1: Establish the tax home.

[Gary2]

...I am more convinced than ever that she meets the 2 out of 3 test that I quoted earlier, and that facts & circumstances favor deducting travel, meals, and lodging. If she were my client, I would certainly go for it!

I don't even think you can or need to get to that test. She has a regular job, so unless there's other missing info, that regular job would be her tax home. Also, based on what we know so far, this isn't a temporary assignment.

So the remaining questions, for me, are a) can the taxpayer make a case that it's reasonable to stay overnight (or unreasonable to drive back and forth); and b) can the taxpayer and/or the IRS make any other arguments about the work area.

For the overnight stay, I'd want to know how much time the drive takes, what the weekday hours are, and whether there are any other factors that would argue for or against the overnight stay having a business necessity. For the work area question, I'd want to know how far she drives to get to the regular job, whether there's any pattern or practice of teachers or other workers driving further, whether there's any practice of teachers being sent to more distant schools (either permanently or for temporary assignment), etc.

[appelman]

After reading RFK's clarification...

...I am more convinced than ever that she meets the 2 out of 3 test that I quoted earlier, and that facts & circumstances favor deducting travel, meals, and lodging. If she were my client, I would certainly go for it!

[Uncle Sam]

Employee Business Expenses

Would you latecomers to this thread - please go back to the beginning and get the full facts that have been disclosed?

The facts were - the lady commutes to this part-time weekend job from her residence area 80 miles one way, does her duties both days during the weekend and stays in a motel (sometimes 2 nights) three times a month, sometimes eats meals while on duty in the prison, sometimes not. The clergy'/prison job is for the state government unrelated to her full time week job.

The OP's question was - are there any legitimate Employee Form 2106 expenses?

[David1980]

http://www.taxalmanac.org/index.php/Discussion:Employee_Travel_Expenses_for_Second_Job

Discusses a similar set of facts.

[rfk]

Employee Business Expense From Poster

Hi folks,

Dynamic conversations.

This clergy job is done with the state, but I know I said that already. No expenses reimbursed by agreement with the employer.

The taxpayer has a regular job at a school during the week - teacher of sorts.
She is "chaplain" (certain denomination) to a women's prison facility in central CA.

She does this State work because she enjoys helping women with their situation if you will religiously. So she is essentially a chaplain doing part time work (on weekends as needed). Not related to the teaching work she does regularly.

She and I were wondering about the costs that she incurs as being a W-2 employee, what could potentially be deductible for the chaplain work.

My opinion was that the "commuting" expense was not; but thought that any expenses out of pocket for prison oriented work might be - whatever can be "labeled" as oriented towards prison out of pocket expense, not reimbursed, if anything.

Hope the above makes more sense.

rfk

[Gretel]

rfk

...would you please clarify what exactly the circumstances are? No matter, if your are still interested or not?

This is more than an interesting thread for the general always confusing issue but it would be nice to know what the situation is..

[Gary2]

The OP never clarified whether this was the clergy's one and only job. It hinges on whether the TP has employment in the clergy field as a regular occupation, and whether the travel is outside the general metropolitan area (it seems as if it is.)

Agreed. I have one point to elaborate: On the one hand, the handful of cases that I've read that discuss actually mileage suggest that 80 miles is likely to be enough to be considered outside the work area. On the other hand, it's clearly a fact and circumstances issue, and there are situations in this country where 80 miles would be considered a common commute.

[Burke]

The OP never clarified whether this was the clergy's one and only job. It hinges on whether the TP has employment in the clergy field as a regular occupation, and whether the travel is outside the general metropolitan area (it seems as if it is.)

[David1980]

In summary, based on the fact pattern presented here, the taxpayer in the original post still has no deductions.

(Right?)

[Gary2]

Married Couple Had Separate Tax Homes Where Each Spouse Was Employed

(Caution: tangent alert!) Fifteen days a month is three shy of 183. The wife had best be careful lest she be declared a NY resident and be taxed on everything; I assume NY is already taxing her wages.

Hawaii is a bit more generous, requiring 200 days, and even then it's rebuttable.

[Burke]

I agree with this 100%. And that means that Appelman's scenario of living in SF and travelling to Chicago periodically after he retired, AND presuming there was not a then-current working scenario in SF of whatever sort, his commuting would not have been deductible either. Whether or not the employer chose to reimburse has nothing to do with the tax law. Look at it from a larger view: Congress enacted a special allowance as a legitimate deductible job expense for certain employees who were required to travel away from their regular work area. It was not intended to be applicable to any and all workers who commute to a job. And not for persons who live in one area and regularly work in another. I had a client a few years ago whose company closed their office in this town. He had 2 years to go to retirement, so chose to commute to another location 3 states away for those 2 years because he did not want to move.. None of that expense was deductible. He didn't like it, but that's the way it is.

[Lion]

CCH's Practical Tax Bulletin

From CCH's Practical Tax Bulletin, Issue 16, 08/02/2011

Married Couple Had Separate Tax Homes Where Each Spouse Was Employed

A married couple who were separately employed in different cities for an indefinite period of time were denied various Schedule A itemized deductions claimed for travel and incidental expenses incurred while away from home (Baker v. Commissioner, T.C. Summary 2011-95). Their respective tax homes were their duty stations where they were permanently employed, not the marital residence in Seattle, Washington.

The husband was a tug master for an interisland cargo services provider based out of Honolulu, Hawaii. He commuted from Seattle to Honolulu for each multi-day shift that he worked. Typically, a shift would last a month, and he would get one month off between shifts. Commuting expenses were not reimbursed by the husband’s employer.

While he was working in Hawaii, the husband was allowed to sleep aboard the vessel on which he worked. When the boat was docked at Honolulu, the husband had to provide all of his own meals. However, when the boat was at sea or docked in another port, the husband’s meals were provided by his employer.

The tax home of the husband was in Honolulu. He presented no evidence that there was a business reason for his personal residence being in a different state from his principal place of business. Consequently, the husband was not entitled to deductions for travel and incidental expenses incurred while he was in his home port. However, he was entitled to deductions for meal expenses incurred while traveling away from home that he adequately substantiated for two years in issue.

The wife was employed as a flight attendant for a U.S.-based carrier that flew international routes; she worked entirely European routes. Her base station, where she was required to report for work, was JFK International Airport in New York, New York. She flew from Seattle to New York to begin each flight rotation, which would typically last from the 1st to the 15th of each month. She had an apartment in New York that she shared with nine other people.

The wife received time away from base pay (roughly equivalent to a per diem) beginning when she signed in for her shift at JFK and ending when she returned to New York. She was not reimbursed for commuting expenses from Seattle to New York. When she was in New York, she had to provide her own meals and transportation to JFK. At her layover destinations in Europe, the airline provided her with hotels, meals and transportation to and from the airport.

The tax home of the wife, an airline flight attendant, was her base station, the location of her principal place of business. Deductions claimed by the wife for travel expenses incurred in excess of her employer's per diem were disallowed. She failed to provide adequate substantiation for the expenses or file Form 2106, Employee Business Expenses, with her federal income tax returns for any of the years in issue.

Reference: PTE §9,510.05

[appelman]

I would say she meets two out of three.

As I see it, she meets the 2nd and 3rd condition regardless of what she does at home, as I would have in my hypothetical case as a retiree. I.e. her business "requires her to be away." Which brings us back to facts and circumstances.

Gary2: my apologies. I misconstrued your syntax and thought you were excluding self-employment. I guess it was getting late!

[Gary2]

I think it just clicked for me.

The rules for having a tax home without a regular or main place of business require that you have at least two of the three factors listed. Two of those factors require actually having a business activity. So clearly, a person living solely on retirement income (pensions, etc.) doesn't have a tax home by this rule, because they can only satisfy one of the factors. But in that case, we wouldn't even be having this discussion - since a person with 100% of their income coming from retirement doesn't have that odd job in some other place.

But then I agree with David. If that retired person does have one and only one job elsewhere (whether employee or self-employed), then that other location is the tax home.

In the current case, we just don't know whether there's other work. If this is the only work, then the work location is the tax home and there is no deduction. If there is other work, then we get into the "work area" discussion.