Travel Expenses

[MAMalody]

I was reading a tax book and the author said,

"A traveling evangelist or conference speaker with a permanent tax home will incur deductible travel expenses for lodging and meals while on the road and use parsonage allowance exclusion for his permanent home. If he lives in a motor home or travel trailer and does not have a permanent home, he is considered a transient or itinerant. His tax home for tax purposes is wherever he "hangs his hat." His lodging and meal expenses will not be deductible as business expenses. He may treat the motor home as his parsonage but his meals will not be deductible. The cost of transportation between engagements does qualify as business travel expense."

I wrote and asked about this and their response was,

"The cost of transportation between engagements does qualify as business travel expense. It is considered a business expense even for a transient because it is a part of doing business."

I don’t understand. I have never come across this before and it seems to violate the general rule that says a transient or itinerant does not qualify for travel expenses. Maybe it is late…what am I missing? Are they saying that transportation expenses are not part of travel expenses? I have never made that distinction before.

What say you?

Mike

[kcjenkins]

I agree with them, that the cost of traveling is clearly a reasonable and necessary business expense of being a traveling evangelist. Transportation expenses and travel expenses are two different things, in the tax code, even though they are very similar. So while he can not deduct the cost of his personal travel to and from his personal home to his job, he certainly can deduct the cost of travel between jobs.

[MAMalody]

I agree with them, that the cost of traveling is clearly a reasonable and necessary business expense of being a traveling evangelist. Transportation expenses and travel expenses are two different things, in the tax code, even though they are very similar. So while he can not deduct the cost of his personal travel to and from his personal home to his job, he certainly can deduct the cost of travel between jobs.

Interesting distinction. So my surmise of the distinction was correct. Is there any cites that might endorse this? I posted the same info on another board of tax professionals and they seemed to think there would be major problems. I can see both sides of this quarter, but must be doing poor research because I am unable to find anything (RR, Court Cases, PLR, etc) that touches on this. I guess I will have to go and take a more systematic approach to researching this. My request for a cite in not due to lack of respect but clear knowledge trail for future reference.

Mike

[kcjenkins]

Refer to IRS Tax Topic 514 and you will see this, which may make it clearer.

Although commuting costs are not deductible, some local transportation expenses are. Deductible local transportation expenses include the ordinary and necessary expenses of going from one workplace to another.

So even if the client is considered an itinerant, so that he does not have 'travel away from home' expenses, he still can deduct the reasonable and necessary expenses of his business, which would include going from one workplace [job] to another. Don't have time to look up a cite right now, but if no one else does, I'll look into it for you tomorrow.

[So and So]

Diagree. If there is no tax home, there are no deductible travel or transportation expenses.

[Wayne Brasch]

Diagree. If there is no tax home, there are no deductible travel or transportation expenses.

So and So,

It's not clear at all with whom or what you are disagreeing. Are you taking exception to the publication referenced by MAMalody or his further thoughts or kcjenkins? The tax book refenced above makes a statement about a tax home.

Wayne

[So and So]

In the first post, the author refers to a permanent tax home. I read this to mean if the evangelist had a permanent home, that alone created a tax home therfore making the deduction away from home deductible. But, just because the worker has a permament home, it may not be a tax home. And since most traveling evangelists earn the majority of their income traveling, it might be hard to establish a tax home for them.

If there is no tax home, then no travel or transportation expenses can be deducted. Transportation expenses would be for local expenses between workplaces. But. I don't see how an evangelist would incur transportation expenses between workplaces. Maybe if he went to one church in the a.m. and from there to another church. But, I think most miles would be commuting miles.

That's my take on it.

[MAMalody]

Refer to IRS Tax Topic 514 and you will see this, which may make it clearer.

Although commuting costs are not deductible, some local transportation expenses are. Deductible local transportation expenses include the ordinary and necessary expenses of going from one workplace to another.

So even if the client is considered an itinerant, so that he does not have 'travel away from home' expenses, he still can deduct the reasonable and necessary expenses of his business, which would include going from one workplace [job] to another. Don't have time to look up a cite right now, but if no one else does, I'll look into it for you tomorrow.

For local transportation, I would agree. A prior posted indicated maybe the evangelist is in one church in the AM and a different one in the PM, which happens frequently. However, that begs the issue of traveling from Boston to Seattle. The inference I received from the book and the response when questioned, is that the transporation is deductible whether across town or across the country.

A response from another tax board:

Travel and transportation expenses are identical if it is out of town.

Travel is disallowed if it is in town. Transportation expenses in town are allowed if it is job to job, including office in home to another job site.

You have to decide whether it is out of town or in town before you can apply the rules.

This may be what you meant, KC, however, I was not able to determine that. I would be interested in any cite that can settle this. I really struggle to think that the Boston to Seattle trip is deductible for the transient/itinerant evangelist....but, I have been wrong before.

[PapaJoe]

Mike, you stated that you wrote the author of the book and asked a question. Can you not contact the author again and ask for a citation?

[OldJack]

I agree with So and So. If the taxpayer is a transient or itinerant their tax home is where they are and that makes it they do not qualify for moving expenses or travel expenses when going from town to town. Of course I would probably try to find and argue that they had a tax home somewhere.

[jainen]

>>If the taxpayer is a transient or itinerant their tax home is where they are<<

This was my initial reaction to this thread too, but I hesitated to post it. There is an alternative viewpoint (Revenue Ruling 73-529) by which, given certain facts & circumstances including the lack of a main place of business, the taxpayer's main home IS their tax home.

I was thinking of the traveling nurses, sent by an agency to various cities for short assignments. The ones who lost their IRS case actually moved repeatedly, instead of maintaining a home base and duplicating living expenses.

But itinerant preachers typically have a regular home including a significant church membership. So in the end I think I would look to the facts & circumstances expecting to allow such travel expenses.

[MAMalody]

>>If the taxpayer is a transient or itinerant their tax home is where they are<<

This was my initial reaction to this thread too, but I hesitated to post it. There is an alternative viewpoint (Revenue Ruling 73-529) by which, given certain facts & circumstances including the lack of a main place of business, the taxpayer's main home IS their tax home.

I was thinking of the traveling nurses, sent by an agency to various cities for short assignments. The ones who lost their IRS case actually moved repeatedly, instead of maintaining a home base and duplicating living expenses.

But itinerant preachers typically have a regular home including a significant church membership. So in the end I think I would look to the facts & circumstances expecting to allow such travel expenses.

A cite has appeared on the other tax board. I have not had time to research it yet, however, here it is:

"The Tax Court in Johnson 115 TC 210 lays out the concept of tax home. Citations omitted.

We disagree with respondent's assertion that petitioner had no tax home. This Court's jurisprudence holds that an individual's tax home is generally the location of his or her principal place of employment. .... If an individual does not have a principal place of employment, we generally deem the situs of the individual's permanent residence to be his or her tax home. ....We consider a person who has neither a permanent residence nor a principal place of employment to be an itinerant without a tax home."

Can you argue from this that if the evangelist has not permanent place of residence,

that the vairous preaching places are his places of employment

that his tax home is his RV

therefore, the travel expenses between preaching places (ex. Boston to Seattle) would qaulify?

Mike

[MAMalody]

Mike, you stated that you wrote the author of the book and asked a question. Can you not contact the author again and ask for a citation?

I have done this and will post any reply that answers the question.

Mike

[jainen]

>>his tax home is his RV therefore, the travel expenses between preaching places (ex. Boston to Seattle) would qaulify?<<

I would not agree. It is the opposite of the revenue ruling I cited and the court case you quoted. If his tax home is an RV, then whether he is in Boston or Seattle all he has is local commute because he is never away from his tax home.

[MAMalody]

>>his tax home is his RV therefore, the travel expenses between preaching places (ex. Boston to Seattle) would qaulify?<<

I would not agree. It is the opposite of the revenue ruling I cited and the court case you quoted. If his tax home is an RV, then whether he is in Boston or Seattle all he has is local commute because he is never away from his tax home.

Duh!

[joanmcq]

The other tax board's original question had to do with an itinerant traveling and working out of an RV. they had no tax home. This quote relates to a traveling preacher and considering the RV as his parsonage and being able to take the parsonage allowance for the RV, and transportation expenses. The two discussions are apples and oranges.

[MAMalody]

The other tax board's original question had to do with an itinerant traveling and working out of an RV. they had no tax home. This quote relates to a traveling preacher and considering the RV as his parsonage and being able to take the parsonage allowance for the RV, and transportation expenses. The two discussions are apples and oranges.

That is partially correct. When I posted the tax issue in reference to clergy it was NOT dealing with parsonage allowance. It was specifically looking at the fact that the evangelist was classified as a transient or itinerant and the clergy tax book indicating that while not qualifying for travel expenses, the evangelist would still be able to deduct the transportation from one job site to another - which could also be from Seattle to Boston, etc. That is clearyly pointed out in the OP of this questions on this cite and also on the other cite. It is an apples to apples comparison. The discussion had nothing to do with the parsonage allowance.

I do agree it looks difference, but that is only because I posted the entire paragraph from the tax book and the response from the author's web site.

[jainen]

>>the clergy tax book indicating that while not qualifying for travel expenses, the evangelist would still be able to deduct the transportation from one job site to another - which could also be from Seattle to Boston<<

Don't be silly. There are no special rules about clergy travel. Like any other worker, they deduct transportation away from their tax home and local travel between jobs. That means if he preaches in three churches on Sunday, travel from #1 to #2 and #3. It doesn't mean across the continent, even if he flies in a single day.

I notice you didn't identify the source of your quote, nor any authority the author may cite. Many on this forum are professionals who require something more substantial than "I read it somewhere." There is a large number of IRS and court rulings on a topic as common as business mileage; if you can back up your author's opinions we would all appreciate it.

[MAMalody]

Don't be silly. There are no special rules about clergy travel. Like any other worker, they deduct transportation away from their tax home and local travel between jobs. That means if he preaches in three churches on Sunday, travel from #1 to #2 and #3. It doesn't mean across the continent, even if he flies in a single day.

I never said they could. Although, since you don't give many specifics, I suspect that if he walked out a church door, into a cab to the airport, into a plane, into a cab to another church door we could make an argument that he went directly from one job site to another job site.

I notice you didn't identify the source of your quote, nor any authority the author may cite. Many on this forum are professionals who require something more substantial than "I read it somewhere." There is a large number of IRS and court rulings on a topic as common as business mileage; if you can back up your author's opinions we would all appreciate it.

You might try reading the OP. You have posted two or three times to this thread on this question and as far as I remember you have not yet posted a cite that refutes or endorses the authors contention. (I probably should go back and check before I say that.) When I made the posting I saw no reason to identify the book and I did not say "I read somewhere," I quoted the book itself. There is a distinction. Also, I was never trying to back up the author's opinion. In fact, I was actually posting it here because I questioned the author's conclusion. I also never said the author gave a cite. In fact, in the thread I indicated that I had written back looking for an authority of some type.

Just as a point of fact, there have been a number of postings about "I read it somewhere." They were probably posted when you were not monitoring the board.

I have not yet received a response back from the author with any authority for his position.

Mike

[MAMalody]

This link was posted on the other tax board.

http://www.lesemanncpa.com/news_details.asp?newsid=8

[TAXBILLY]

Thanx for the link, Mike.

taxbilly

[jainen]

>>his tax home is his RV<<

Chief Counsel Advice 200750017 summarizes older rulings that their ship itself is the tax home for the crew of a Navy vessel (unless it is in dry dock). It's a bit of a stretch to equate a warship with an itinerant worker's vehicle, but at least it shows that "tax home" is not limited to a specific geographical location.

[DANRVAN]

I agree with KC, there is a distinction between “travel” expenses and “transportation” expenses in the case of the itinerant worker, but had to take time to research. Also found an itinerant taxpayer might be able to deduct the extra cost of meals and lodging while traveling.

The “itinerant rule” found in Rev Rul 73-529 is specific to meals and lodging:

“the taxpayer in Situation 2, not having satisfied any of the objective factors set forth herein, is an itinerant having his “home” wherever he happens to work. Thus, since he is not “away from home,” the cost of his meals and lodging are not deductible as traveling expenses under section 162(a)(2).”

The issue with meals and lodging is duplicating of expenses; they would not have occurred if the taxpayer had been at home. Transportation is a matter of getting from point A to point B for business purposes. If a sales rep or business consultant has to fly from Boston to Seattle, why would it make any difference if he has a tax home or not in deducting the actual transportation expenses? Why would it matter if he chose to travel by car or motor home?

There are many court cases out there, but I found none which match the facts and circumstances here. MCNEIL was a truck driver trying to deduct travel expenses and meals. Certainly transportation expense was not an issue.

The case of HENDERSON which also focuses on meals and lodging, refers to Barone v. Commissioner: “The duplication of expenses is a primary raison d'être for the deduction under section 162(a)(2).”

HENDERSON, in a footnote, also refers to James v. United States: “taxpayer (without a tax home) might be able to deduct that portion of his traveling expenses attributable to the increase cost of meals and lodging associated with travel”.

JOHNSON has nothing to do with this situation; his issue was incidental travel expneses. The issue in FLOWERS was living expenses.

I found nothing to prevent itinerant taxpayers from deducting ordinary and necessary business transportation expenses. Also, per James v U.S., they might be able to deduct the “extra cost” of living on the road for business travel.