Temporary Work Assignment

You may regularly work at your tax home and also work at another location. It may not be practical to return to your tax home from this other location at the end of each work day.

Temporary assignment vs. indefinite assignment. If your assignment or job away from your main place of work is temporary, your tax home does not change. You are considered to be away from home for the whole period you are away from your main place of work. You can deduct your travel expenses, if they otherwise qualify for deduction. Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for one year or less.

However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than one year, whether or not it actually lasts for more than one year.

If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. You may be able to deduct the cost of relocating to your new tax home as a moving expense.

Notes About the IRS Position

This is information for you to understand the position of the IRS. The information does not mean you are prohibited from taking a position contrary to the IRS with adequate bases. Your specific circumstances may require a different position and it may be to your advantage!

First consider the fact IRS makes its own and Court supported definition of "home":

Tax Home
Homeless for Tax purposes
Family Home

The IRS will define the "Home" location to be used for computing the travel or temporary assignment expenses. If the worker is defined, by the IRS, to be away from "Home" -- then there may be travel and travel expenses. However the IRS has published the following statement:

"You are traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away. Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home."

Please consider this is the position of the IRS: The Tax Home or the "Homeless for Tax purposes" is the "Home" to use for determining whether there is any travel away from "Home".

The next hurdle: The following three factors must be met for initial determination of the tax home:

Business must be conducted in the area of the main home and that home must be used for lodging while doing business in the area
There are living expenses at the main home which are duplicated because of the business requires there be absence from that home
The are for the historical place of lodging and main home has not been abandoned, there are members of the family living at the main/historical place of lodging; and/or the employee often uses that home for lodging.

The next hurdle: All the travel expenses must be-

Reasonable
Necessary
Paid and paid during the tax year
Incurred in conducting business
Directly attributable to the business
The trip must be more business than pleasure
The expenses must be documented as enumerated in the Law and Regulations

The distance from the family home to the work location is not a part of the fact pattern to use in defining "Tax Home". The definition centers more on where the work is performed.

What is Temporary? Revenue Ruling 93-86 Also,

Temporary Work Assignment Ltr Rul 200026025

Temporary Work Assignment Rev Rul 99-7

Determining temporary or indefinite. You must determine whether your assignment is temporary or indefinite when you start work. If you expect an assignment or job to last for one year or less, it is temporary unless there are facts and circumstances that indicate otherwise. An assignment or job that is initially temporary may become indefinite due to changed circumstances. A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment.

The following examples illustrate whether an assignment or job is temporary or indefinite.

Examples

Example 1. You are a construction worker. You live and regularly work in Los Angeles. You are a member of a trade union in Los Angeles that helps you get work in the Los Angeles area. Because of a shortage of work, you took a job on a construction project in Fresno. Your job was scheduled to end in 8 months. The job actually lasted 10 months.

You realistically expected the job in Fresno to last 8 months. The job actually did last less than 1 year. The job is temporary and your tax home is still in Los Angeles.

Example 2. The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 18 months. The job actually was completed in 10 months.

Your job in Fresno is indefinite because you realistically expected the work to last longer than 1 year, even though it actually lasted less than 1 year. You cannot deduct any travel expenses you had in Fresno because Fresno became your tax home.

Example 3. The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 9 months. After 8 months, however, you were asked to remain for 7 more months (for a total actual stay of 15 months).

Initially, you realistically expected the job in Fresno to last for only 9 months. However, due to changed circumstances occurring after 8 months, it was no longer realistic for you to expect that the job in Fresno would last for one year or less. You can only deduct your travel expenses for the first 8 months. You cannot deduct any travel expenses you had after that time because Fresno became your tax home when the job became indefinite.

Going home on days off. If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. You cannot deduct the cost of your meals and lodging there. However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work.

If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work.

Probationary work period. If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. You cannot deduct any of your expenses for meals and lodging during the probationary period.

Temporary Work Assignments & Deductible Travel Expenses

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