Brown v. Commissioner, T.C. Memo. 2019-30, is a U.S. Tax Court case issued on April 8, 2019.
This case involved the IRC §162 business deduction for travel expense, where the couple were denied a deduction for the husband’s weekly travel expenses from his residence to an out-of-state business location, as he failed to prove that his residence was his “tax home.” An interesting fact is that the husband, who prepared the tax return, was a CPA with years of experience and training; likely indicating that these travel rules can be complex in some situations.
Deductible Travel Expenses for Business
IRC Section 162 allows a deduction for “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” Ordinary and necessary
business expenses include “traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while
away from home in the pursuit of a trade or business.” For example, travel fares, meals and lodging, and expenses incident to travel are treated as qualified business expenses. In order to
determine whether a taxpayer is “away from home,” the “tax home” must first be determined.1