Tax Home

[Gretel]

Never ending confusion.

If clients employer is 120 miles away (B)(outside his vicinity) and client doesn't report to this location every day, only once in a while, but is sent to different locations: is this considered away from his tax home?

Is B his tax home, even if he never really works at this location?

He also does work were he lives(A), so he is not a transient worker. If B is considered his tax home how do I account for mileage then? Count mileage from B to tempory locations even if he doesn't drive them because job site is closer to A and not in same direction as B? (Somehow I think that can not be and I must have a knot in my brain).

[Bucky]

Does he have office in home. If this was so almost all travel could be deducted. It seems that it would be for the convenience of the employer. What kind of work does the client do? Good luck.

[jainen]

tax home

Don't overlook the possibility that he does not have a tax home. That is not the same as being a transient worker. Clients who have a lot of business related travel and commute naturally want to deduct it, but the tax code doesn't necessarily allow it.

[Gretel]

Tax Home

Bucky and Jainen, thank you.

Client is in construction industry and since he meets all three tests he has a tax home. Since he almost always starts out from home and does some work in his home his home place should be his tax home.

But it's the same employer and sometimes he has to go there so I am not sure if this should be his tax home.

I think I confuse "same employer" with "job site". His jobs last some months and then he moves on to next. He comes back home almost every weekend. So his tax home should be were he lives, right?

[jainen]

The tax home

The tax home is not where he lives. It is the general metropolitan area where he works. Since it is an area, changing job sites within that area will not create deductible travel. When he leaves his normal work area overnight to work someplace else, that can go on Form 2106.

There is no specific definition of how big the tax home area is--that depends on the local economy. Where I live people commonly commute across a major mountain range with drive times of up to three hours or more and distances of over 100 miles. Nobody even asks me if that is out of the area.

[Gretel]

Jainen

I appreciate all your thoughts. My area is kind of the same as yours but the next real town is 50 miles away. Distances over 70 miles have been established through audits to be acceptable as outside the metropolitan area.

Would you still say his tax home is were he works even if the job sites are all over the place and he doesn't have to report to the place of his employer?

[jainen]

most of his jobs

That's what a tax home is--where you work. It's not where you live and it's not where your employer is. It's a general area, not a specific job site. Not everyone has a tax home, but your construction worker probably does most of his jobs in the area where he does most of his jobs.

[Snaggletooth]

No Tax Home

Going out on a limb here - and being very liberal in favor of the taxpayer.

The designation of having "no tax home" is more often than not unfair. I've never heard of a preparer deciding that a client has no tax home. In fact, the only time I've heard of this is when an auditor is faced with mileage deductions no matter where he tries to fix where a taxpayer works, and designates "no tax home" so he can disallow all deductions. Under this theory, if a taxpayer has no tax home, he cannot ever be away from his tax home, therefore no mileage allowed.

Gabriele, as bad as this is, the auditor can make it stick if your client truly is so nomadic that his tax home is ill-defined. If you can designate a place where your client does most of his work, you can defeat this "no tax home" mentality.

Another thing working against the taxpayer in some areas is this idea of an entire "metropolitan area" being designated as a "tax home." I was once taught that a landmark court case upheld an IRS designation of the entirety of the Philadelphia metro area being declared the "tax home" for a construction worker who proved he was averaging driving 75 miles a day. This area includes part of Pennsylvania 35 miles wide and 50 miles long, as well as 25% of the state of New Jersey. Imagine, this poor guy drove the equivalent of to Billings and back (in your area) and was not able to deduct a single mile.

I am aggressive in claiming miles for my customers, because I don't think the IRS tactics described above are fair. But I make sure there is a tax home and trips to the tax home are treated as commuting. Example: a customer works for a Nashville employer 75 miles away from his home in rural Tennessee, but the Nashville office sends him out to oil rigs in the Gulf of Mexico using his own truck. He is in the Nashville office maybe 20 days annually, and I make sure he does not deduct the 150-mile round trip from his home. I allow him to deduct his trips to Houma, LA and TX. He drives down there 5 or 6 times a year, and often spends 3 weeks on a platform without seeing land.

Good Luck - Ron

[rosieea]

I am aggressive in claiming miles for my customers, because I don't think the IRS tactics described above are fair. But I make sure there is a tax home and trips to the tax home are treated as commuting. Example: a customer works for a Nashville employer 75 miles away from his home in rural Tennessee, but the Nashville office sends him out to oil rigs in the Gulf of Mexico using his own truck. He is in the Nashville office maybe 20 days annually, and I make sure he does not deduct the 150-mile round trip from his home. I allow him to deduct his trips to Houma, LA and TX. He drives down there 5 or 6 times a year, and often spends 3 weeks on a platform without seeing land.

Good Luck - Ron

What if the company he works for had an office in Houma?

[Snaggletooth]

Doesn't Change

His company DOES in fact have an office in Houma. But his tax home is Nashville, thus mileage to Nashville is commuting, and mileage to Houma are deductible.

In fact, someone could work for McDonald's, who has a presence in almost every town..

[Gretel]

Tax Home

Ron and Jainen, thank you for your thoughts.

Ron, I kind of came to the same conclusion as you, that his employer's office is his tax home. But if he starts his trips from home then, is this all deductible miles? Somehow I tought then we had to figure the distance from his tax home to the job sites.

Of course that would mean sometimes is less mileage, sometimes more. Am I totally off with this thought?

[Donanita]

[QUOTE=
I am aggressive in claiming miles for my customers, because I don't think the IRS tactics described above are fair. But I make sure there is a tax home and trips to the tax home are treated as commuting. Example: a customer works for a Nashville employer 75 miles away from his home in rural Tennessee, but the Nashville office sends him out to oil rigs in the Gulf of Mexico using his own truck. He is in the Nashville office maybe 20 days annually, and I make sure he does not deduct the 150-mile round trip from his home. I allow him to deduct his trips to Houma, LA and TX. He drives down there 5 or 6 times a year, and often spends 3 weeks on a platform without seeing land.

Good Luck - Ron[/QUOTE]

Be careful on the mileage for a offshore client. Several years ago we used to deduct the mileage from where the taxpayer lived(in north Louisiana)to south Louisiana or Texas.The IRS did a LOT of audits on these taxpayers and disallowed the mileage stating the tax home was at the location where the taxpayer left to go to the offshore rig.The only mileage that could be deducted was from land to the offshore rig,which the employer covered.

[rosieea]

His company DOES in fact have an office in Houma. But his tax home is Nashville, thus mileage to Nashville is commuting, and mileage to Houma are deductible.

In fact, someone could work for McDonald's, who has a presence in almost every town..

Seems to me it's a commute to Houma; unless, of course, he goes to the Nashville office first, then trucks on down to Houma - work site to work site.

[Snaggletooth]

Thank You

Thanks Donation for your insight - I believe you practice close to this geographical area and I appreciate your experience. If my client had mileage to Houma disallowed because Houma was his tax home, he could then deduct his 20 trips from home to Nashville. Because Nashville is no longer his tax home.