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Focus on Transportation and Dealerships: No Tax Homes for Long-Haul Truck Drivers

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The United States Tax Court recently upheld the Internal Revenue Service’s (IRS) determination that a long-haul truck driver could not deduct unreimbursed travel expenses because he was not away from home, as he did not have a tax home.
April 28, 2015

The United States Tax Court recently upheld the Internal Revenue Service’s (IRS) determination that a long-haul truck driver could not deduct unreimbursed travel expenses because he was not away from home, as he did not have a tax home.

The truck driver claimed residence in Missouri at his mother’s address, however; he spent less than 10 days during the entire 2009 tax year at this residence.  He did not pay rent or any of his mother’s housing expenses and kept his personal belongings in storage.  The remaining days were spent on the road where he slept in his truck or stayed in a hotel.  

The driver claimed a deduction for unreimbursed  employee business expenses on his 2009 tax return.  These expenses included travel expenses while away from home, which were per diem expenses while on the road and hotel expenses.  The IRS disallowed all of these deductions.  

The driver argued the per diem and hotel expenses were incurred while he was traveling away from home for business purposes and should be deductible.  The IRS determined that he did not have a tax home therefore the expenses were not incurred whlie traveling away from home.  The Tax Court agreed with the IRS, in that for a home to qualify as a tax home, a taxpayer is required to incur expenses to maintain the home while on the road.  Since the driver did not incur expenses to maintain a home,  the Tax Court upheld the IRS ruling and also determined the driver was liable for a penalty for his underpayment of tax for the 2009 tax year.

 

Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.

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