Academic journal article Journal of Accountancy

Defining the Temporary Workplace

Academic journal article Journal of Accountancy

Defining the Temporary Workplace

Article excerpt

For most taxpayers getting to and from work--no matter how arduous, frustrating or costly their daily commute--is a nondeductible personal expense.

Taxpayers whose residences are their principal places of business, however, may deduct daily transportation expenses between a home office and other temporary or regular work locations related to their trade or business. A home office qualifies as a principal place of business even if it is used only for administrative or managerial activities.

In the past, the IRS defined a "temporary" location as any location at which the taxpayer performed services on an irregular or short-term (days or weeks) basis.

In Walker v. Commissioner (101 TC 597, 1993), the Tax Court held a lumberjack could deduct daily transportation expenses even though his only regular place of work was his home and the home did not qualify as his principal place of business.

Taxpayers following Walker could thus deduct the costs of commuting to temporary work sites even if they didn't have a home office.

In revenue ruling 99-7 (1999-5 IRB), however, the IRS has redefined the meaning of "temporary employment" illustrated in Walker.

According to the new ruling, employment is temporary only if

* It is realistically expected to last (and does, in fact, last) for one year or less.

* It is initially expected to last for one year or less, but at some later date it becomes apparent the work will exceed one year (the work is temporary only until the date of the changed expectation).

If employment at a certain location is realistically expected to last for more than one year and is completed in less than a year, the employment is not considered temporary under the new ruling. …

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