Oil Field Worker

[jainen]

Metropolitan Area

Metropolitan Area is not such a vague term. It is defined in demographic and economic usage as a large population center with surrounding communities sharing a high degree of social and economic integration with the center. The Census Bureau publishes a list of them all, if you can believe it! A labor camp is a housing project, not a principle place of work, so I think this client is an itinerant with no tax home and no travel deductions. On the other hand, I post pretty often on this and some other forums, and hardly anybody ever agrees with me.

[Gretel]

Jainen

I partly agree with you, a housing project is not a priciple place of work. But somewhere where the housing project is located the worker needs to report to work to get paid. So this reporting "agency" is his principle place of work then.

I find it interesting that you you disqualify someone from having a tax home if they don't do business in their vicinity. QF pg. 9-7 states that if you meet two out of three requirements you have a possible tax home. If you meet three you have a tax home.

So, lets say, someone has a house, family members and all social contact in place A (which will make him meet No.2 and 3 of the list on pg. 9-7) and travels to place B to constantly switching assignments, so he is never just in one metropolitan area, would you call him "transient", no questions asked? Or what would make you consider him being away from home?

[Snaggletooth]

Safe Harbors

Defining specific numbers is not something IRS likes to do in situations where enjoy arbitrary privelege of disallowing expenses.

Let's take the Gabriele example. Metropolitan Missoula, MT is barely 4 miles long.
Suppose the IRS sets a statutory amount of 30 miles, which sounds maybe reasonable to some snaggletooth hillbilly like me. However, 30 miles will not get you halfway through metropolitan Philadelphia -- and remember the "metropolitan" language is a great part of what defines a tax home. So the IRS loses out by defining 30 miles for some guy like **** Clark from Philly.

OK, so now they go back and set a statutory amount of 125 miles. Then some guy from Winslow AZ drives to Gallup, NM and thus can't deduct. So he takes IRS to court because the distance transcends BOTH metropolitan areas, and IRS gets beat.

IRS is not going to create a "safe harbor" for this issue. Because they have not painted themselves into a corner with a statutory limit, they also have not painted taxpayers into a corner either. But by leaving their disallowance power virtually unlimited, it becomes most difficult for a taxpayer to win if the area is the least bit grey.

There are literally DOZENS of areas where a safe harbor would do wonders and clear things up, but they simply won't do it.

[Gretel]

No Wonder

... lots of people are confused on this issue. I bet if IRS audited all 2106's they would disallow a lot of the travel expenses.

I know so many long standing good preparers who give the away from home expenses easily not asking too many questions. If at least there would be a safe harbor on facts in a scenario where you don't have a regular work place. But no, it's all up in the air.

As far as the mileage goes I know that going to Billings (50 miles) is withing the metropolitan area since lots of people have to go there for work. Don't know how they are doing it with the gas prices.

[JG EA]

Billings

As far as the mileage goes I know that going to Billings (50 miles) is withing the metropolitan area since lots of people have to go there for work. Don't know how they are doing it with the gas prices.

Gabriele,
There was just an article in TaxPro (NATP) about someone who worked all over his state. He also regularly worked around his home area. But often he would travel from home, sometimes staying overnight. The IRS wanted to count the whole state as his "metropolitan area". They lost. The court said that was not reasonable just because he did not live in a metropolis. The court figured if he traveled over 35 miles he could reasonably be said to be away from home.

For people who work in Billings, 50 miles away, I think the issue is not how many miles it is, but are they on temporary assignments, perhaps away from home where they work regularly (or have worked regularly to estabish a home base so to speak), or do they commute.

As you are aware commuting is not allowed even if they commute to Texas. But, if they have established a tax home in your "metropolitan area" they can take miles when they occationally work out of that area. Or if they are away from home working on a temporary assignment (less than a year/or is it one year or less, I always have to look that point up) then they can take those expenses.

[Gretel]

Agressive

Oh, my I don't know what....

Next thing will be to count all of USA as one metropolitan area. We will have to become as agressive as the IRS. I guess the case where an auditor established the distance in my area for an out of town worker could have been fought. It didn't happen in my office but I kind of took it as a guideline.

[dmj4]

My area

We are about 40 miles or so from Nashville. Lots of people work in Nashville every day and lots of people never go to Nashville for anything. People from smaller towns in other counties come to out city to shop and eat. To them, we are their metropolitan area. We have a hospital, Walmart, K-Mart, chain restaurants, chain clothing stores, and large grocery stores. I don't consider us metropolitan, but those people do.

What kind of arguments would validate a city as being "metropolitan"?

[JG EA]

Clark Kent and The Daily Planet.

What kind of arguments would validate a city as being "metropolitan"?

That was the point. Since there was no metropolitan area then 35 miles away from where that guy worked could be called away from...

Most of the time it is just the city where one lives and normally works (or previously worked to establish tax home).