COMMUTING OR BUSINESS TRAVEL?

[BLACK BART]

New guy's former preparer retired/ got extension-came to me/ has contract labor janitor service (1099s from all)/ drives pickup truck 25 miles from home every day/ goes to about four or five different business locations/ services each one/ drives to another (several miles apart) until all are finished/ drives back home.  Former tax prepper gave him 100% of many thousands of miles (home to biz/ biz to biz/ biz to home).  What about the commuting? I once read that IRS argues the job has to be 85 miles away from home to be considered "out of (what is it?) your metropolitan area" and thus eligible to deduct the mileage to the jobs.  I also read that one audit case bargained them down to 35 miles. 

I'm thinking an agent would allow him the biz to biz travel, but would kill him on audit by disallowing commuting from home (also claimed 100% business truck use-has no other vehicles).  Sometimes we allow the mileage to construction guys who work lots of places without prying too much into where the work was done because they move around so much, but this case is pretty well nailed down to just one town and that's that. 

I know I'm not doing 100% business use (75% generally), but about the rest, metro area, home drive, etc. what do you think and what would you do? Opinions, please.

 

P.S. I'm thinking about giving it back 'cause they'll scream loudly (standard miles are the biggest deduction). They're audit-bait as it stands and you know who gets the blame for that no matter who does it now/what was done in the past. On the other hand, there's a very good fee and I might get away with it (they've probably been doing it for years - doesn't that set a precedent ). 

[Lee B]

Knee Jerk Response - Home to first job or first business related stop commuting, same for last job or last business related stop to home.

Exception to this would be qualified home office for more than admin related tasks,

for example, he buys his own cleaning supplies and equipment and uses his garage to store them

then carries them in his vehicle from job to job.

[BLACK BART]

21 hours ago, cbslee said:

Knee Jerk Response - Home to first job or first business related stop commuting, same for last job or last business related stop to home.

Exception to this would be qualified home office for more than admin related tasks,

for example, he buys his own cleaning supplies and equipment and uses his garage to store them

then carries them in his vehicle from job to job.

Disregard what I said about the "metro area" rules, etc. - I was thinking about construction workers (most of mine work far off and out of state).

Just checked his '15 return and they did do a $500 home office expense form for him.  You say "admin-related tasks" which is the bookkeeping I assume.  But if he did not furnish and store his own cleaning supplies at home, are you saying that would kill off the home office being viewed as his principal and regular place of business (which allows him to deduct ALL the miles)? 

[Lee B]

It needs to be more than admin, like meeting customers on a regular basis, which is unlikely in his business.

There are lots of court cases etc out there on this subject.

[BLACK BART]

33 minutes ago, cbslee said:

It needs to be more than admin, like meeting customers on a regular basis, which is unlikely in his business.

I agree since the only customers are 25 miles away and none will be coming to his house. 

35 minutes ago, cbslee said:

There are lots of court cases etc out there on this subject.

Yeah, I know.  Most are decided on a case by case basis and, as a practical matter, at the auditor's discretion.

Still, I just wondered if you had read about a case in which the in-home supply storage was a material factor.  I've found some items that suggest he does buy his own supplies and it's likely he keeps them at home.  

Thanks (and I'll stop bothering you ).

[DANRVAN]

On ‎05‎/‎11‎/‎2017 at 1:06 PM, cbslee said:

Knee Jerk Response - Home to first job or first business related stop commuting, same for last job or last business related stop to home.

Exception to this would be qualified home office for more than admin related tasks,

for example, he buys his own cleaning supplies and equipment and uses his garage to store them

then carries them in his vehicle from job to job.

That was the law prior to 1999 (Soliman, supreme court 1993). Tax Relief Act of 1997 relaxed Code Sec. 280A(c)(1). :

"For purposes of subparagraph (A) , the term “principal place of business” includes a place of business which is used by the taxpayer for the administrative or management activities of any trade or business of the taxpayer if there is no other fixed location of such trade or business where the taxpayer conducts substantial administrative or management activities of such trade or business."

 

[BLACK BART]

 

4 hours ago, DANRVAN said:

That was the law prior to 1999 (Soliman, supreme court 1993). Tax Relief Act of 1997 relaxed Code Sec. 280A(c)(1). :

"For purposes of subparagraph (A) , the term “principal place of business” includes a place of business which is used by the taxpayer for the administrative or management activities of any trade or business of the taxpayer if there is no other fixed location of such trade or business where the taxpayer conducts substantial administrative or management activities of such trade or business."

 

Thanks Dan, I think maybe you just saved this case (believe he meets that test) for me since you're a couple of decades more up-to-date than I generally am. 

Also many thanks to you cbslee for getting me started on the right track and reminding me of stuff I'd forgotten.

Nice helpful board, isn't it, folks?