8738 / Can a taxpayer deduct business travel expenses if the taxpayer travels so frequently that the taxpayer has no “tax home”?

Yes. If a taxpayer travels constantly for business, it is possible that he or she may have no tax home for purposes of determining the deductibility of business travel expenses under Section 162.

For example, in McNeill v. Commissioner, the taxpayer was a truck driver who was travelling so frequently that the Tax Court found he had no principal place of business. Further, no significant expenses were incurred in connection with maintaining a principal residence, as he paid approximately $1,000 a year for a mobile home until he owned it in full and, for the tax years in question, the taxpayer only spent approximately twenty days per year in the mobile home. Though the taxpayer attempted to deduct all travel and meal expenses while he was “on the road,” the Tax Court denied the deductions, finding that, in a case like this, the taxpayer was never “away from home” for tax purposes and, therefore, was not entitled to deduct any business travel expenses.¹

Similarly, in James v. United States, the taxpayer was a traveling salesperson who spent so much time traveling that the Ninth Circuit found there were insufficient contacts with any location to determine a tax home. In this case, the court discussed whether a taxpayer was required to maintain a physical residence in order to ever be considered “away from home” for purposes of Section 162. Because the intent of Congress in allowing the deduction was to prevent the taxpayer from incurring duplicate (lodging) or higher (meal and lodging expenses tend to be higher in travel) expenses during business travel, the court found that the deduction should only apply in cases where the taxpayer has a “home” and must expend funds to maintain this home.Further, if a taxpayer has no permanent home, and must therefore obtain food and shelter in public restaurants and hotels whether or not the taxpayer is traveling, there is no justification for allowing the deduction for business travel expenses.²

Therefore, in rare cases, it is possible that the taxpayer will never be allowed to deduct business travel expenses whether or not they are incurred in the pursuit of a trade or business, because the taxpayer will never actually be “away from home.” In other words, if a taxpayer is constantly on the move due to his work, he is never “away” from home.³