Taxing Lessons Case Summaries

Case — Temporary vs. Indefinite Employment

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TL Case Summ


Is a job temporary or indefinite employment for purposes of deducting work related travel expenses?


Taxpayer Says: Vehicle expenses, lodging, meals and incidentals are deductible because he was traveling away from home to a temporary job.

Internal Revenue Service Says: The job was indefinite, not temporary, and the expenses are not deductible.


From Internal Revenue Code Section 262 and Federal Tax Regulation 1.262-1(b)(5): Generally, a taxpayer may not deduct personal, living, or family expenses, such as the costs of transportation, meals, and lodging while traveling away from home.

From Commissioner v. Flowers, 326 U.S. 465, 470 (1946): Travel expenses may be deducted under section 162(a)(2) if they are: (1) Reasonable and necessary; (2) incurred while the taxpayer was traveling “away from home”; and (3) incurred in pursuit of a trade or business.

From Mitchell v. Commissioner, 74 T.C. 578, 581 (1980): The reference to “home” in section 162(a)(2) means the taxpayer’s “tax home”. As a general rule, a taxpayer’s tax home is determined by the location of the taxpayer’s principal place of employment, regardless of where the taxpayer’s personal residence is located.

From Peurifoy v. Commissioner, 358 U.S. 59, 60 (1958): Under an exception to the general rule, a taxpayer’s personal residence may be his tax home where the taxpayer is away from home on a temporary rather than indefinite basis. (The exception is from Internal Revenue Code Section 162(a), which provides that a “taxpayer shall not be treated as being temporarily away from home during any period of employment if such period exceeds 1 year.”)

From Boone v. United States, 482 F.2d 417, 419 (5th Cir. 1973): Employment is defined as “temporary” only if the taxpayer can foresee its termination within a reasonably short period of time or it is for a fixed duration. Indefinite employment is employment where the prospect is that the work will continue for an indefinite and substantially long period.

From Tucker v. Commissioner, 55 T.C. 783, 786 (1971): A taxpayer’s subjective intent as to the length of time he may wish to remain in an indefinite position is not controlling but the ultimate question is whether the taxpayer’s decision not to move his residence while he works somewhere else is attributable to personal choice rather than to exigencies of his trade or business.


Whether or not you can deduct the expenses of traveling to your work depends on the location of your “tax home.” When your work is expected to last indefinitely (typically more than a year), your tax home is your principal place of employment. That means if you live in one town and work in another, the town where you work is considered your tax home, and you cannot deduct the expense of traveling to and from your residence. Instead, those expenses are personal.

However, when you expect your work to be temporary, which is generally defined as lasting one year or less, your tax home is your residence, and you may be able to deduct travel costs.

You make the determination of indefinite or temporary when you begin work. If facts change at a later date, so does the classification.

In this case, the taxpayer, an electrician, accepted a job in a town 200 miles from his residence. The position was permanent (after completing a six-month probationary period), but he intended to stay there only until he found work he preferred, either closer to his home or on a different type of project.

During the first five months of employment, he traveled to the job at the beginning of each week, stayed in a motel, then traveled home at week’s end. For the next ten months, until he found another job, he rented an apartment close to his work, maintaining the same travel schedule.

Because he intended the job to be a temporary, interim position while he pursued other employment opportunities, he deducted the costs of travel, lodging and meals on his 2006 tax return.

The IRS says the job was indefinite, not temporary, and the taxpayer’s tax home was the job location, not his residence. The IRS contends expenses do not qualify under the exception to the general rule, and they are not deductible.


Make your selection, then see “The Court’s Decision” below for a full explanation

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HL Carpenter, an experienced investor and a CPA, specializes in reader friendly articles on taxes and investing for individuals and small businesses, and publishes two newsletters: Taxing Lessons and Top Drawer Ink. Visit and

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For the IRS. The position was a permanent position with no foreseeable terminus. When the taxpayer accepted the job, he had a reasonable expectation that the position would, and it in fact did, last more than one year. Consequently, the job location was his tax home for the relevant period. Because the taxpayer was not “away from home” within the meaning of section 162(a)(2), he is not entitled to a deduction for vehicle expenses, lodging, meals and incidentals incurred as a result of the position. Instead, his costs were in the nature of personal or living expenses.