Academic journal article Journal of Accountancy

Some Daily Transportation Expenses Still Are Deductible

Academic journal article Journal of Accountancy

Some Daily Transportation Expenses Still Are Deductible

Article excerpt

The cost of driving to and from work every day is not deductible, but the cost of going from one business location to another is, according to IRC section 162(a). However, there are some very important exceptions to the general rules.

In Curphey v. Commissioner (73 T.C. 766 [1980]), the Tax Court said daily transportation expenses incurred by a taxpayer traveling between an office in his or her residence and other work locations were deductible if the home office qualified as the taxpayer's principal place of business under IRC section 280A(c)(1)(A).

Last year, in Walker v. Commissioner (101 T.C. 537 [1993]), the Tax Court allowed a self-employed tree cutter to deduct daily transportation expenses between his residence and numerous temporary work sites, even though Walker's home did not qualify as a principal place of business.

Revenue ruling 94-47 (1994-29 IRB) rejects the Tax Court's decision in Walker and says, as a general rule, daily transportation between a taxpayer's residence and another work location is a nondeductible commuting expense.

The ruling gives three examples of when such expenses can be deducted:

1. A taxpayer may deduct daily transportation expenses incurred between his or her residence and a temporary work location outside the metropolitan area where he or she lives and normally works. …

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