The IRS uses 3 tests to determine whether a taxpayer is considered to have a tax home, or a "regular place of abode," for determining travel expenses.

1. Whether the taxpayer performs a portion of his/her business in the vicinity of his/her claimed residence and uses the residence for lodging while performing such business there

2. Whether the taxpayer incurs duplicate living expenses while on business travel.

3. Whether the taxpayer:
a. Has not abandoned the vicinity in which his/her historical place of lodging and his/her claimed residence are both located, or
b. Has family members currently residing at his/her claimed residence, or
c. Taxpayer frequently uses the claimed residence for lodging.

If all three of the tests are satisfied, the IRS will assume there is a tax home and the taxpayer's away from home travel expenses will be deductible.

If only two of the three tests are satisfied, the IRS will closely examine the facts and circumstances to determine whether there is a qualified tax home.

If only one or none of the tests are satisfied, none of the taxpayer's travel expenses will be allowed by the IRS.

In addition, while expenses for TEMPORARY employment away from home are deductible, expenses from INDEFINITE employment are not. If a taxpayer is away from home at a single location for more than one year, the travel will be considered indefinite, not temporary, regardless of the circumstances. Employer reimbursements for any nondeductible expenses must be included in the employee's gross income.

Remember that a taxpayer can deduct travel expenses when business is conducted away from the taxpayer's tax home. The tax home is the entire city or general area where the taxpayer's place of business, employment, or post of duty is located. The location of the family home does not matter, although in most cases the tax home will be the same as the family home. The only way that one can have travel expenses is to first have a tax home.

If you have any additional questions on how the issues of a tax home impact travel expenses, contact the IRS at 1-800-TAX-FORM and request Publication 463,"Travel, Entertainment, and Gift Expenses." Or you can download the document at the IRS website: http://www.irs.ustreas.gov/plain.

- Article 25

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