Car Expenses - Temporary Locations (multiple)
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Bob Parrish CPA PCIn most circumstances travel from one work location to another work location is deductible. Travel from home to a work location is under different rules.
The phrase "away from home" as used in Code Section 162(a)(2) has generated a great deal of litigation regarding both what is a taxpayer's home and when he is away from home. Generally, a taxpayer's tax home is considered by the IRS to be his main place of business or post of duty, regardless of where the taxpayer maintains his family home. If a taxpayer does not have a regular or main place of business because of the nature of his work, then either the tax home is the place where he regularly lives, or the taxpayer is considered homeless for tax purposes. Thus, the taxpayer is never away from home for traveling expense deduction purposes. The geographical scope of the tax home covers the entire city or general area in which the taxpayer's business or work is located. Rev. Rul. 56-49, 1956-1 C.B. 152.
A taxpayer whose residence is a substantial distance from the place of work cannot deduct the cost of traveling between home and work, regardless of which definition of home is correct.
A circumstance arises which, although not common, is not unusual. The taxpayer may have more then one location for performing identical services in his or her line of work. For example, a lawyer may have an office in two more more cities. The locations may be far distanced from one another. The travel between the offices should be deductible. The taxpayer is advised to leave from the office in the travel from office to the other. The establishment of the tax home is usually based upon the office for which the greater amount of business is conducted. Many times the offices are substantially equal.
You will need to establish several facts using documents from third party records and your records which will show that:
The trip was business only
You used your vehicle - if you plan to use the IRS standard mileage rate or actual expenses fro your car
Rental car payments if you used a rental car
Airline tickets if you flew - or tickets for other transportation methods
The dates of the trip (i. e. the government will want to see evidence of which tax year the expenses were incurred within)
Other documents you deem necessary
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Start of Revenue Procedures Section
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Revenue Ruling 90-23 |
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Code Secs. 162, 62, 262, 274 Status: Amplified & Clarified by 94-47, Modified & Superseded by 99-7
<<FULL TEXT>> 26 CFR 1.162-2: Traveling expenses. (Also Sectrons 62, 262, 274; 1.62-2T, 1.262-1, 1.274-5T.) Rev. Rul. 190 distinguished. This revenue ruling allows a taxpayer with one or more regular places of business a business expense deduction for transportation expenses paid or incurred by the taxpayer in going between the taxpayer's residence and a temporary work location, regardless of the distance traveled. Rev. Rul. 190 distinguished; Rev. Rul. 55-109 modified; Rev. Rul. 59-371 distinguishable.
REV. RUL. 90-23 ISSUES For a taxpayer with one or more regular places of business: (1) Are daily transportation expenses paid or incurred by the taxpayer in going between the taxpayer's residence and a temporary work location of the taxpayer deductible business expenses under section 162(a) of the Internal Revenue Code? (2) Are amounts paid as a reimbursement or other expense allowance for such daily transportation expenses excludable from the employee's gross income pursuant to section 62(a)(2)(A) of the Code and section 1.62-2T of the temporary Income Tax Regulations? (3) Is an employer required to report on an employee's Form W-2 or to withhold and pay employment taxes on, amounts paid as a reimbursement or other expense allowance for such daily transportation expenses?
LAW AND ANALYSIS ISSUE (1) Section 162 of the Code allows a deduction for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business. Under this provision, a taxpayer may deduct the daily transportation expenses paid or incurred in the taxpayer's trade or business. Section 262 of the Code, however, provides that no deduction is allowed for personal, living, or family expenses. Commuting expenses are specifically treated as nondeductible personal expenses under sections 1.162-2(e) and 1.262-1(b)(5) of the Income Tax Regulations. Section 67(a) of the Code provides that miscellaneous itemized deductions for any taxable year may be deducted only to the extent that the aggregate amount of such deductions exceeds 2 percent of adjusted gross income under section 62. Section 67(b) provides that the term "miscellaneous itemized deductions" means itemized deductions other than those specifically listed therein. A business expense deduction under section 162(a) is a miscellaneous itemized deduction because it is not one of the deductions specifically listed in section 62(b). Daily transportation expenses paid or incurred by a taxpayer in going between the taxpayer's residence and one or more regular places of business or employment are nondeductible personal commuting expenses under section 262 of the Code. However, daily transportation expenses paid or incurred by a taxpayer in going between two specific business locations (whether in the same business or different businesses) are deductible business expenses. See Rev. Rul. 55-109, 1955-1 C.B. 261. Rev. Rul. 190, 1953-2 C.B. 303, provides a limited exception to the general rule of commuting expense nondeductibility. It holds that, for a taxpayer who ordinarily works in a particular metropolitan area but who is not regularly employed at any specific work location, daily transportation expenses are deductible business expenses when paid or incurred by the taxpayer in going between the taxpayer's residence and a temporary work site outside that metropolitan area. However, such expenses are not deductible when paid or incurred in going between the taxpayer's residence and a temporary work site within such metropolitan area because that area is considered the taxpayer's regular place of business. A taxpayer who pays or incurs daily transportation expenses on trips between the taxpayer's residence and one or more regular places of business is like the taxpayer described in Rev. Rul. 190 who pays or incurs daily transportation expenses on trips between the taxpayer's residence and temporary work sites within the metropolitan area that is considered the taxpayer's regular place of business. Such daily transportation expenses are nondeductible commuting expenses. On the other hand, a taxpayer who has one or more regular places of business and who pays or incurs daily transportation expenses for trips between the taxpayer's residence and temporary work locations is like the taxpayer described in Rev. Rul. 190 who pays or incurs deductible daily transportation expenses for trips between the taxpayer's residence and temporary work sites outside the metropolitan area that is considered the taxpayer's regular place of business. Thus, for a taxpayer who has one or more regular places of business, daily transportation expenses paid or incurred in going between the taxpayer's residence and temporary work locations are deductible business expenses under section 162(a) of the Code regardless of the distance. For purposes of determining whether daily transportation expenses within the metropolitan area are deductible business expenses or nondeductible commuting expenses, a regular place of business is any location at which the taxpayer works or performs services on a regular basis, and a temporary place of business is any location at which the taxpayer performs services on an irregular or short-term (i.e., generally a matter of days or weeks) basis. A taxpayer may be considered as working or performing services at a particular location on a regular basis whether or not the taxpayer works or performs services at that location every week or on a set schedule. Thus, for example, daily transportation expenses incurred by a doctor in going between the doctor's residence and one or more offices, clinics, or hospitals at which the doctor works or performs services on a regular basis are nondeductible commuting expenses. However, daily transportation expenses incurred by the doctor in going between a clinic and a hospital or between the doctor's residence and a temporary work location are deductible business expenses. If it is determined upon examination that there is a clear pattern of abuse by the taxpayer in claiming a business expense deduction for daily transportation expenses paid or incurred in going between the taxpayer's residence and asserted temporary work locations without proof of a valid business purpose, the Service will disallow any deduction for such expenses and impose appropriate penalties.
ISSUES (2) AND (3) For purposes of determining "adjusted gross income," section 62(a)(2)(A) of the Code allows an employee a deduction from gross income for expenses allowed by Part VI (section 161 and following), subchapter B, chapter 1 of the Code, paid by an employee, in connection with the performance of services as an employee, under a reimbursement or other expense allowance arrangement with a payor (the employer, its agent, or a third party). Section 62(c) of the Code provides that an arrangement will not be treated as a reimbursement or other expense allowance arrangement for purposes of section 62(a)(2)(A) if (1) such arrangement does not require the employee to substantiate the expenses covered by the arrangement to the payor, or (2) such arrangement provides the employee the right to retain any amount in excess of the substantiated expenses covered under the arrangement. Under section 1.62-2T(c)(1) of the temporary regulations, a reimbursement or other expense allowance arrangement satisfies the requirements of section 62(c) of the Code if it meets the requirements of business connection, substantiation, and returning amounts in excess of expenses as specified in the regulations. If an arrangement meets these requirements, all amounts paid under the arrangement are treated as paid under an "accountable plan," except that any amounts retained in excess of the amounts substantiated are treated as paid under a "nonaccountable plan." See section 1.62-2T(c)(2) and (c)(3)(ii). If an arrangement does not satisfy one or more of these requirements, all amounts paid under the arrangement are treated as paid under a "nonaccountable plan." See section 1.62-2T(c)(3). Section 1.62-2T(c)(4) of the temporary regulations provides that amounts treated as paid under an accountable plan are excluded from the employee's gross income, are not required to be reported on the employee's Form W-2, and are exempt from the withholding and payment of employment taxes (FICA, FUTA, RRTA, RUTA, and income tax). Section 1.62-2T(c)(5) provides that amounts treated as paid under a nonaccountable plan are included in the employee's gross income, must be reported to the employee, and are subject to withholding and payment of employment taxes. For withholding and payment of employment tax requirements, see sections 31.3121(a)-2T, 31.3231(e)-3T, 31.3306(b)-2T, and 31.3401(a)-2T of the Employment Tax Regulations, which apply to payments made under reimbursement or other expense allowance arrangements received by an employee on or after July 1, 1990, with respect to expenses paid or incurred on or after July 1, 1990. For reporting requirements, see section 1.6041-3(i), which generally applies to payments made under reimbursement or other expense allowance arrangements received by an employee on or after January 1, 1989, with respect to expenses paid or incurred on or after January 1, 1989. Consistent with the position in this revenue ruling on Issue (1) providing for the deductibility of daily transportation expenses paid or incurred by a taxpayer with one or more regular places of business in going between the taxpayer's residence and a temporary work location, an employee is not required to include in gross income the portion of a reimbursement or other expense allowance for such daily transportation expenses that is treated as paid under an accountable plan pursuant to section 1.62-2T(c)(2) and (c)(4) of the temporary regulations. In addition, such portion of the reimbursement or allowance is not required to be reported on the employee's Form W-2 and is exempt from the withholding and payment of employment taxes. For purposes of meeting the accountable plan requirements, an employee may use any of the Service-specified deemed substantiation procedures (e.g., the business standard mileage rate) to substantiate the amount of the daily transportation expenses paid or incurred. See Rev. Proc. 89-66, 1989-2 C.B. 792. An employee is required to include in gross income only the portion of a reimbursement or other expense allowance for such daily transportation expenses that is treated as paid under a nonaccountable plan pursuant to section 1.62-2T(c)(3) and (c)(5) of the temporary regulations. In addition, the excess portion of the reimbursement or allowance is required to be reported on the employee's Form W-2 and is subject to withholding and payment of employment taxes.
HOLDINGS For a taxpayer with one or more regular places of business: (1) Daily transportation expenses paid or incurred by the taxpayer in going between the taxpayer's residence and a temporary work location of the taxpayer are deductible business expenses under section 162(a) of the Code. If the taxpayer is an employee, the taxpayer may deduct such daily transportation expenses only as a miscellaneous itemized deduction subject to the 2-percent floor provided in section 67 of the Code. However, see Holding (2) below for the treatment of those expenses reimbursed under an accountable plan. (2) An employee is not required to include in gross income the portion of amounts paid as a reimbursement or other expense allowance for such daily transportation expenses that is treated as paid under an accountable plan pursuant to section 1.62-2T(c)(2) and (c)(4). An employee is required to include in gross income the portion of amounts paid as a reimbursement or other expense allowance for such daily transportation expenses that is treated as paid under a nonaccountable plan pursuant to section 1.62-2T(c)(3) and (5). The employee may claim a miscellaneous itemized deduction for the amount by which the deductible daily transportation expenses exceed the portion of the amounts paid as a reimbursement or other expense allowance for such expenses that is treated as paid under an accountable plan, but such deduction is subject to the 2-percent floor provided in section 67 of the Code. (3) An employer is not required to report on the employee's Form W-2, or to withhold and pay employment taxes on, the portion of amounts paid as a reimbursement or other expense allowance for such daily transportation expenses that is treated as paid under an accountable plan pursuant to section 1.62-2T(c)(2) and (c)(4). An employer is required to report on the employee's Form W-2, and to withhold and pay employment taxes on, the portion of amounts paid as a reimbursement or other expense allowance for such daily transportation expenses that is treated as paid under a nonaccountable plan pursuant to section 1.62-2T(c)(3) and (5).
EFFECT ON OTHER REVENUE RULINGS Rev. Rul. 190 is distinguished because the employees in that revenue ruling were not regularly employed at any specific work location. The federal income tax treatment of taxpayers within the scope of Rev. Rul. 190 (I.e., those who are not regularly employed at any specific work location and who travel to temporary jobs outside the metropolitan area) remains unchanged. Rev. Rul. 59-371, 1959-2 C.B. 236, which in part sets forth rules concerning what is "temporary" employment for purposes of Rev. Rul. 190, is distinguishable. Rev. Rul. 55-109, which in part provides for the deductibility of daily transportation expenses paid or incurred by a taxpayer who is a member of an Armed Forces reserve unit in going between the taxpayer's residence and the regular meetings of the reserve unit that are held at a location outside the metropolitan area in which the taxpayer is regularly employed, is hereby modified to provide for the nondeductibility of such expenses paid or incurred on or after January 1, 1990. Rev. Rul. 55-109 also states that the regular place of business of a taxpayer is not limited to the office or building at which the taxpayer regularly works or performs services but includes the entire metropolitan area in which such site is located. Rev. Rul. 55-109 is hereby further modified by deleting such statement. <<END RULING>>
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Start of Revenue Rulings Section
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Revenue Ruling 99-7 |
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Code Secs. 162, 262 FULL TEXT 26 CFR 1.162-2: Traveling expenses. (Also sections 262; 1.262-1.) Deductibility of daily transportation expenses. This ruling provides the rules for determining whether daily transportation expenses incurred by a taxpayer in going between the taxpayer's residence and a work location are deductible business expenses under section 162(a) of the Code.
REV. RUL. 99-7 ISSUE Under what circumstances are daily transportation expenses incurred by a taxpayer in going between the taxpayer's residence and a work location deductible under section 162(a) of the Internal Revenue Code?
LAW AND ANALYSIS Section 162(a) allows a deduction for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business. Section 262, however, provides that no deduction is allowed for personal, living, or family expenses. A taxpayer's costs of commuting between the taxpayer's residence and the taxpayer's place of business or employment generally are nondeductible personal expenses under sections 1.162-2(e) and 1.262-1(b)(5) of the Income Tax Regulations. However, the costs of going between one business location and another business location generally are deductible under section 162(a). Rev. Rul. 55-109, 1955-1 C.B. 261. Section 280A(c)(1)(A) (as amended by section 932 of the Taxpayer Relief Act of 1997, Pub. L. No. 105-34, 111 Stat. 881, effective for taxable years beginning after December 31, 1998) provides, in part, that a taxpayer may deduct expenses for the business use of the portion of the taxpayer's personal residence that is exclusively used on a regular basis as the principal place of business for any trade or business of the taxpayer. (In the case of an employee, however, such expenses are deductible only if the exclusive and regular use of the portion of the residence is for the convenience of the employer.) In Curphey v. Commissioner, 73 T.C. 766 (1980), the Tax Court held that daily transportation expenses incurred in going between an office in a taxpayer's residence and other work locations were deductible where the home office was the taxpayer's principal place of business within the meaning of section 280A(c)(1)(A) for the trade or business conducted by the taxpayer at those other work locations. The court stated that "[w]e see no reason why the rule that local transportation expenses incurred in travel between one business location and another are deductible should not be equally applicable WHERE THE TAXPAYER'S PRINCIPAL PLACE OF BUSINESS WITH RESPECT TO THE ACTIVITIES INVOLVED IS HIS RESIDENCE." 73 T.C. at 777-778 (emphasis in original). Implicit in the court's analysis in Curphey is that the deductibility of daily transportation expenses is determined on a business-by-business basis. Rev. Rul. 190, 1953-2 C.B. 303, provides a limited exception to the general rule that the expenses of going between a taxpayer's residence and a work location are nondeductible commuting expenses. Rev. Rul. 190 deals with a taxpayer who lives and ordinarily works in a particular metropolitan area but who is not regularly employed at any specific work location. In such a case, the general rule is that daily transportation expenses are not deductible when paid or incurred by the taxpayer in going between the taxpayer's residence and a temporary work site inside that metropolitan area because that area is considered the taxpayer's regular place of business. However, Rev. Rul. 190 holds that daily transportation expenses are deductible business expenses when paid or incurred in going between the taxpayer's residence and a temporary work site outside that metropolitan area. Rev. Rul. 90-23, 1990-1 C.B. 28, distinguishes Rev. Rul. 190 and holds, in part, that, for a taxpayer who has one or more regular places of business, daily transportation expenses paid or incurred in going between the taxpayer's residence and temporary work locations are deductible business expenses under section 162(a), regardless of the distance. Rev. Rul. 94-47, 1994-2 C.B. 18, amplifies and clarifies Rev. Rul. 190 and Rev. Rul. 90-23, and provides several rules for determining whether daily transportation expenses are deductible business expenses under section 162(a). Under Rev. Rul. 94-47, a taxpayer generally may not deduct daily transportation expenses incurred in going between the taxpayer's residence and a work location. A taxpayer, however, may deduct daily transportation expenses incurred in going between the taxpayer's residence and a temporary work location outside the metropolitan area where the taxpayer lives and normally works. In addition, Rev. Rul. 94-47 clarifies Rev. Rul. 90-23 to provide that a taxpayer must have at least one regular place of business located "away from the taxpayer's residence" in order to deduct daily transportation expenses incurred in going between the taxpayer's residence and a temporary work location in the same trade or business, regardless of the distance. In this regard, Rev. Rul. 94-47 also states that the Service will not follow the decision in Walker v. Commissioner, 101 T.C. 537 (1993). Finally, Rev. Rul. 94-47 amplifies Rev. Rul. 190 and Rev. Rul. 90-23 to provide that, if the taxpayer's residence is the taxpayer's principal place of business within the meaning of section 280A(c)(1)(A), the taxpayer may deduct daily transportation expenses incurred in going between the taxpayer's residence and another work location in the same trade or business, regardless of whether the other work location is regular or temporary and regardless of the distance. For purposes of both Rev. Rul. 90-23 and Rev. Rul. 94-47, a temporary work location is defined as any location at which the taxpayer performs services on an irregular or short-term (i.e., generally a matter of days or weeks) basis. However, for purposes of determining whether daily transportation expense allowances and per diem travel allowances for meal and lodging expenses are subject to income tax withholding under section 3402, Rev. Rul. 59-371, 1959-2 C.B. 236, provides a 1-year standard to determine whether a work location is temporary. Similarly, for purposes of determining the deductibility of travel away-from-home expenses under section 162(a)(2), Rev. Rul. 93-86, 1993-2 C.B. 71, generally provides a 1-year standard to determine whether a work location will be treated as temporary. The Service has reconsidered the definition of a temporary work location in Rev. Rul. 90-23 and Rev. Rul. 94-47, and will replace the "irregular or short-term (i.e., generally a matter of days or weeks) basis" standard in those rulings with a 1-year standard similar to the rules set forth in Rev. Rul. 59-371 and Rev. Rul. 93-86. If an office in the taxpayer's residence satisfies the principal place of business requirements of section 280A(c)(1)(A), then the residence is considered a business location for purposes of Rev. Rul. 90-23 or Rev. Rul. 94-47. In these circumstances, the daily transportation expenses incurred in going between the residence and other work locations in the same trade or business are ordinary and necessary business expenses (deductible under section 162(a)). See Curphey; see also Wisconsin Psychiatric Services v. Commissioner, 76 T.C. 839 (1981). In contrast, if an office in the taxpayer's residence does not satisfy the principal place of business requirements of section 280A(c)(1)(A), then the business activity there (if any) is not sufficient to overcome the inherently personal nature of the residence and the daily transportation expenses incurred in going between the residence and regular work locations. In these circumstances, the residence is not considered a business location for purposes of Rev. Rul. 90-23 or Rev. Rul. 94-47, and the daily transportation expenses incurred in going between the residence and regular work locations are personal expenses (nondeductible under sections 1.162-2(e) and 1.262-1(b)(5)). See Green v. Commissioner, 59 T.C. 456 (1972); Fryer v. Commissioner, T.C.M. 1974-77. For purposes of determining the deductibility of travel-away-from-home expenses under section 162(a)(2), Rev. Rul. 93-86 defines "home" as the "taxpayer's regular or principal (if more than one regular) place of business." See Daly v. Commissioner, 72 T.C. 190 (1979), aff'd, 662 F.2d 253 (4th Cir. 1981); Flowers v. Commissioner, 326 U.S. 465 (1946), 1946-1 C.B. 57.
HOLDING In general, daily transportation expenses incurred in going between a taxpayer's residence and a work location are nondeductible commuting expenses. However, such expenses are deductible under the circumstances described in paragraph (1), (2), or (3) below. (1) A taxpayer may deduct daily transportation expenses incurred in going between the taxpayer's residence and a temporary work location outside the metropolitan area where the taxpayer lives and normally works. However, unless paragraph (2) or (3) below applies, daily transportation expenses incurred in going between the taxpayer's residence and a temporary work location within that metropolitan area are nondeductible commuting expenses. (2) If a taxpayer has one or more regular work locations away from the taxpayer's residence, the taxpayer may deduct daily transportation expenses incurred in going between the taxpayer's residence and a temporary work location in the same trade or business, regardless of the distance. (The Service will continue not to follow the Walker decision.) (3) If a taxpayer's residence is the taxpayer's principal place of business within the meaning of section 280A(c)(1)(A), the taxpayer may deduct daily transportation expenses incurred in going between the residence and another work location in the same trade or business, regardless of whether the other work location is regular or temporary and regardless of the distance. For purposes of paragraphs (1), (2), and (3), the following rules apply in determining whether a work location is temporary. If employment at a work location is realistically expected to last (and does in fact last) for 1 year or less, the employment is temporary in the absence of facts and circumstances indicating otherwise. If employment at a work location is realistically expected to last for more than 1 year or there is no realistic expectation that the employment will last for 1 year or less, the employment is not temporary, regardless of whether it actually exceeds 1 year. If employment at a work location initially is realistically expected to last for 1 year or less, but at some later date the employment is realistically expected to exceed 1 year, that employment will be treated as temporary (in the absence of facts and circumstances indicating otherwise) until the date that the taxpayer's realistic expectation changes, and will be treated as not temporary after that date. The determination that a taxpayer's residence is the taxpayer's principal place of business within the meaning of section 280A(c)(1)(A) is not necessarily determinative of whether the residence is the taxpayer's tax home for other purposes, including the travel-away-from-home deduction under section 162(a)(2).
EFFECT ON OTHER DOCUMENTS Rev. Rul. 190 and Rev. Rul. 59-371 are obsoleted. Rev. Rul. 90-23 and Rev. Rul. 94-47 are modified (regarding the definition of temporary work location) and superseded. With respect to issues (2) and (3) in Rev. Rul. 90-23 (regarding the gross income and employment tax treatment of reimbursements for employee daily transportation expenses), see section 1.62-2 regarding reimbursements in general, and Rev. Proc. 97-58 (particularly sections 3, 9, and 10), 1997-2 C.B. 587 (or any successor), regarding reimbursements using the optional business standard mileage rate. Rev. Rul. 93-86 is distinguished.
DRAFTING INFORMATION The principal author of this revenue ruling is Edwin B. Cleverdon of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Cleverdon at (202) 622-4920 (not a toll-free call). <<END RULING>>
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Start of Revenue Rulings Section
LTR 9806007 UIL Number(s) 0162.00-00 Summary Travel Between Home and Temporary Work Location Are Deductible The Service has ruled that transportation expenses incurred by an
individual traveling between his residence and a work location are
deductible because the work location is temporary. An employee spends about 75 percent of his time working at various
sites that are not business locations of the employer. The employee spends
about two to three weeks, once every two years, at each nonbusiness
location. The Service said that nonbusiness locations qualified as temporary work
locations and as such the travel expenses between the employee's home and
sites were deductible under section 162(a). Full Text Date: November 6, 1997 Refer Reply To: CC:DOM:IT&A:2 -- PLR-111532-97 LEGEND: Taxpayer A = * * * Taxpayer A's TIN = * * * B = * * * K = * * * L = * * * City X = * * * City Y = * * * State Z = * * * Dear * * * [1] This is in response to your request dated June 13,
1997, for a ruling that certain local transportation expenses are
deductible. FACTS [2] A is employed as a K by B. A spends approximately
75% of his working days at Ls, which are not business locations of B and
are located in various cities in Z. A works at each L for approximately
two to three weeks once every two years. [3] In 1996, A spent 26.7% of his working days at B's
field office located in Y. In the first half of 1997 A spent 25% of his
working days at Y. While at B's field office in Y, A prepares for
assignment to an L, reviews information related to work by other Ks at an
L, or prepares reports concerning a completed assignment to an L. [4] A resides in X, which is more than 60 air miles
from Y. X and Y are both located in Z, but are in different metropolitan
areas. For the most part, X and the Ls are located in different
metropolitan areas. [5] A uses his personal vehicle to travel between his
home in X and the Ls. B reimburses A (as well as other Ks) for A's
automobile expenses at the mileage rate specified in Rev Proc. 96-63,
1996-2 C.B. 420. B does not reimburse A for using his personal automobile
in going between his residence in X and B's field office in Y. LAW [6] Section 162(a) of the Internal Revenue Code allows
a deduction for all the ordinary and necessary expenses paid or incurred
during the taxable year in carrying on a trade or business, including
daily local business transportation expenses. Section 262, however,
provides that no deduction is allowed for personal, living, or family
expenses. [7] In general, a taxpayer's daily transportation
expenses incurred in going between the taxpayer's home and a work location
have long been considered nondeductible personal expenses. See sections
1.162-2(e) and 1.262-1(b)(5) of the Income Tax Regulations and Rev. Rul.
94-47, 1994-2 C.B. 18. However, the costs of daily transportation in going
from one business location to another business location generally are
deductible under section 162(a). Rev. Rul. 55-109, 1955-1 C.B. 261. [8] Rev. Rul. 190, [sic] 1953-2 C.B. 302, holds that,
if a taxpayer has no regular work location, the entire metropolitan area
in which the taxpayer normally is employed is considered the taxpayer's
regular place of employment. Such a taxpayer may deduct daily
transportation expenses only between the taxpayer's residence and a
temporary work location outside the metropolitan area. [9] However, a taxpayer who has one or more regular
work locations away from the taxpayer's residence may deduct daily
transportation expenses incurred in going between the taxpayer's residence
and a temporary work location in the same trade or business, whether or
not the temporary work location is in the same metropolitan area as the
taxpayer's regular work location. Rev. Rul. 90-23, 1990-1 C.B. 28; Rev.
Rul. 94-47. [10] Whether a work location is temporary or regular
depends on the particular facts and circumstances. Rev. Rul. 94-47, citing
Rev. Rul. 90-23, defines a "temporary" work location as one at
which the taxpayer performs services on an irregular or short-term (i.e.
generally a matter of days or weeks) basis. Rev. Rul. 90-23 indicates that
a taxpayer may be considered as working or performing services at a
particular location on a regular basis whether or not the taxpayer works
or performs services at that location every week or on a set schedule.
Thus, for example, daily transportation expenses incurred by a doctor in
going between the doctor's residence and one or more offices, clinics, or
hospitals at which the doctor works or performs services on a regular
basis are nondeductible commuting expenses. ANALYSIS [11] In 1996 and the first half of 1997, A spent 25-27%
of his working days at Y. We conclude that Y is a regular place of
business of A. Since A has a regular place of business, A may deduct daily
transportation expenses incurred between his residence at X and temporary
work locations, whether or not the temporary work locations are located
within the same metropolitan area as X or Y. [12] In general, whether a work location is temporary
or regular depends on two circumstances: (1) whether the taxpayer works at
the location repeatedly, and (2) the amount of time the taxpayer spends at
the work location on an occasion. A work location may be regular if the
taxpayer works at the location repeatedly, even if infrequently, or if the
taxpayer's assignment at the location is not short term. [13] Every two years, A works for two to three weeks at
each L. We conclude that a two year interval is too infrequent to consider
the work location a "regular" place of business. Additionally,
the work duration of two to three weeks meets the definition of
"temporary" ("a matter of days or weeks") in Rev. Rul.
94-47. Therefore we conclude that each L is a temporary work location of
A. HOLDING [14] A's daily transportation expenses between his
residence in X and each L are deductible under section 162(a) (subject to
the 2% floor of section 67(a)). [15] A copy of this letter ruling must be attached to
any income tax return to which it is relevant. We enclose a copy for that
purpose. [16] This ruling is directed only to the taxpayer
requesting it. Section 6110(j)(3) of the Internal Revenue Code provides
that it may not be used or cited as precedent. Sincerely, Assistant Chief Counsel (Income Tax & Accounting) By: George Baker Assistant to the Branch Chief Branch 2 cc: * * *
Section 162(a)(2) -- Travel Expenses
Start of Private Letter Rulings Section
Tax
Killers 
From Bob Parrish CPA PC
This is about Activity Based Taxplanning - maximizing deductions, minimizing cash outlay and maximizing the amount of cash retained and the net worth. Activity Based Taxplanning (ABT) is a methodology developed by Bob Parrish CPA, that assists people with the tax issues by focusing on the activity (or actions - events) that are being undertaken or contemplated (or have already taken place). The, research is compiled from the myriad of sources to help you complete the activity with the least tax cost, while maintaining compliance the tax laws, other laws and regulations and place yourself in a position to protect your objectives.
Tax is a subject that many view in order to cut costs. Taxes are a cost just as any other cost. It happens this cost is somewhat intangible and is defined by legislation without a tangible item to view and control. The money is spent and the control of the expenditure is more appropriately administered by someone trained in the law.
Cost
Killers 
From Bob Parrish CPA PC
This is about Activity Based Costing - methods to cut costs, management accounting, management information systems, decision support systems - in general about being a manager.
Preparing for your CPA, attorney, or preparing to start
your own What to gather - From Bob Parrish CPA PC
Entrance Interview
Exit Interview
From Banking Records
From Customer Records
From Signed Documents
From Your Other Business, or Financial Records
From Corporation or Organization Records (meetings, etc.)
What to do
Start of Preparing For You CPA Section
Forms - checklists, time-line to do, etc. Assistance - What
To Do - From Bob Parrish CPA PCAssistance - What to do
Forms - Checklists - Etc.
Spreadsheets & Computations From Bob
Parrish CPA PC 
Spreadsheet #1
Contracts, Trusts, etc. From Bob Parrish CPA PCAgreement #1
Reports
Required From Bob Parrish CPA PCReport #1
Checklists for Deployment From Bob Parrish CPA PCChecklist #1
Checklist for Monitoring From Bob Parrish CPA PCChecklist #1
Financial Accounting: Bookkeeping & Financials From
Bob Parrish CPA PCFinancial Statement Presentation
Notes to Financial Statements
How to Make Entries
What Kind of Records to Keep
Bookkeeping Methods - Cash, Accrual and Other
How the Business Entity Affects the Recording
Sole Proprietor
Corporation - C & S
Partnerships - General, Limited, Limited Liability Company, Registered Limited Liability Partnership or Company
Trusts
Tax Exempt
Compliance - what is required for protection, defense, etc.
From Bob Parrish CPA PCCompliance Checklist
Alerts
& Dangers - Risks, Asset Protection, IRS Defense From Bob
Parrish CPA PCAction Checklist
Alerts & Dangers - Risks
Asset Protection
Your Defense
car_2work_areas.htm
