In Uncategorized on 09/21/2011 at 16:34

Woody Guthrie’s Depression-era ballad comes to the rescue of hard-working Gary A. Lyseng in 2011 T.C. Mem. 226, filed 9/21/11. Gary’s case was tried March 31, 2010; we now get the decision.

Gary will get a 6662(a) accuracy penalty on his unsubstantiated deductions after the Rule 155 computation, but that’s not anything special. What’s of interest is the determination of Gary’s tax home.

Gary was born and raised in Bemidji, Minnesota, and lives with fiancée and Papa in the house he bought years before the year at issue. Like the narrator in Dion’s famous song, The Wanderer, he roamed around around around, working as a laborer in nuclear power plants at inspection time, in Minnesota and other States.

IRS claimed that, since all Gary’s gigs were temporary and in different places, he had no tax home and therefore no travel expenses from Bemidji to wherever. Bemidji might be his domicile and principal place of residence, but that was for his convenience.

But Gary was a staunch union man, and got all his gigs, both in and out of Minnesota, from the Laborer’s Union local in Bemidji.

Judge Swift follows Gary’s wanderings, and then deals with the key issue: “Section 162(a)(2) allows taxpayers to deduct travel expenses incurred while away from home in pursuit of a trade or business. In order to deduct travel expenses a taxpayer generally must show that he or she was away from home overnight when the expenses were incurred. The purpose of the deduction is to alleviate the burden on taxpayers whose business or employment require them to incur duplicate living expenses. For purposes of section 162(a)(2) the word ‘home’ generally means the vicinity of a taxpayer’s principal place of work or employment, not the taxpayer’s personal residence. A taxpayer may be treated as having no principal place of work when the location of his work is always temporary.

“However, when a taxpayer has no principal place of work, and when the taxpayer maintains a personal residence or family home remote from his temporary jobsite, the taxpayer’s home may be treated as his tax home if: (1) The taxpayer incurs duplicate living expenses while traveling and maintaining the home; (2) the taxpayer has personal and historical connections to the home; and (3) the taxpayer has a business justification for maintaining the home.”  2011 T. C. Mem. 226, at pp. 6-7.

Gary has duplicate living expenses (some at least substantiated), and a personal and historical connection to his Bemidji homestead, but what about business reasons?

Judge Swift answers the question: “Petitioner’s union has helped him find work in Minnesota, and it appears reasonable that he will continue to use his union and his address in Bemidji to obtain work in Minnesota…. Petitioner had an adequate business justification for maintaining a home in Bemidji.” 2011 T.C. Mem. 226, at p. 7-8. (Citation omitted)

So Gary prevails as to his tax home. Of course, he still has to substantiate his allowable expenses, where he finds difficulties. But he can join in, with full voice, in Woody Guthrie’s immortal words, “Oh you cain’t scare me, I’m stickin’ to th’ Union….”


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