Key point. Travel expenses (transportation, meals, lodging) are deductible only if the taxpayer incurs these expenses while traveling "away from home" for business purposes.
Boyd v. Commissioner, T.C. Summary Opinion 2006-36.
The United States Tax Court ruled that an itinerant evangelist was not able to deduct his travel expenses since he was never "away from home."
A full-time evangelist did not have a church or a fixed base of operation for the conduct of his ministry. He and his spouse travel throughout the United States in a recreational vehicle and conduct religious services at churches for either a few days or a few weeks. The couple does not own or rent a residence. All of their mail is sent to their daughter. Whatever mail she receives, she mails it to her parents wherever they happen to be. Most of the mail is from churches inviting the couple to conduct religious services.
The couple's 1999 federal tax return was audited by the IRS. On Schedule C (Form 1040), the couple reported the income and expenses of their ministerial activity. Their income was $45,000, and their expenses (almost all of which were travel expenses) were $61,000, resulting in a net loss of $16,000. The IRS denied any deduction for the couple's travel expenses, and the couple appealed.
The Tax Court began its opinion by noting that section 162 of the tax code allows deductions for traveling expenses, including amounts expended for transportation, meals, and lodging, if the expenses are (1) ordinary and necessary, (2) incurred while "away from home", and (3) incurred in pursuit of a trade or business. The IRS insisted that the travel expenses were not incurred while the couple was "away from home," since they did not have a home, and therefore the expenses were not deductible.
The court agreed: "As a general rule, a taxpayer's principal place of employment is his tax home. Where the taxpayer has neither a principal place of business nor a permanent residence, he has no tax home from which he can be away. His home is wherever he happens to be." The court rejected the couple's claim that their "home" was in Mississippi. It concluded: "Whether the couple had a tax home is a question that is easily resolved in this case by the fact that they made only three visits to Mississippi during the year in question, and, on each visit, they stayed at the local church rectory and, perhaps, with their daughter. While the length of those visits was not established, the record indicates that the visits were not for prolonged periods. Most significantly, however, they bore no expenses in maintaining a home there in addition to their recreational vehicle.
Thus, they could not be away from home within the intent and meaning of section 162 because they had no home to be away from. Where the taxpayer does not have a permanent residence, he has no tax home from which he can be away. The home is wherever the taxpayer happens to be."