An independent contractor\u2019s legitmiate travel costs were found by the IRS to be nondeductible commuting costs and not work-related, resulting in his self-prepared returns being very expensive.<\/p>\n
The contractor lived in New Jersey and renovated properties in Philadelphia and the surrounding metropolitan area. He typically worked at the job site for several months. When the job was completed, he moved on to another jobsite. The taxpayer claimed deductions for transportation costs between his residence and the jobsites, including truck expenses, tolls, and insurance. The IRS disallowed the deductions, determining that they were nondeductible commuting expenses.\u00a0The IRS found that the contractor was working within the metropolitan area and that he had no regular place of business.<\/p>\n
The taxpayer decided to take his case to Tax Court. Unfortunately for the taxpayer, the Tax Court upheld the IRS\u2019s denial of these expenses. Whereas the IRS does allow a taxpayer to deduct travel costs between the taxpayer\u2019s residence and a temporary<\/em> work location outside the metropolitan area<\/em> where the taxpayer lives and normally works, such expenses are not<\/em> deductible if the temporary work location is inside<\/em> the metropolitan area where the taxpayer lives and normally works. The exception to the disallowance is (1) that the taxpayer has one or more regular work locations away from the taxpayer\u2019s residence; or (2) the taxpayer\u2019s residence is his principal place of business (i.e., taxpayer has a home office).<\/p>\n The taxpayer appealed this decision to the Third Circuit which rejected the taxpayer\u2019s lame argument that a building supply store or bank he patronized should be treated as regular work locations for him. The taxpayer\u2019s argument, the court found, would strain the meaning of regular work location. The taxpayer was at the building supply store and the bank as a customer and not as a worker. Thus, the taxpayer was not successful in showing that he had one or more work locations.<\/p>\n The Third Circuit noted that the taxpayer did not raise the home office exception on appeal, and, therefore, he was deemed to have waived it. This case illustrates that self-preparation of tax returns and self-representation during IRS audits are not always the least expensive alternatives. The taxpayer\u2019s actions converted normally legitimate tax deductions to non-deductible expenses.<\/p>\n If you want to discuss your business or personal tax planning<\/a>, tax preparation<\/a> and other financial concerns with an experienced tax professional, we invite you to call 610-594-2601<\/a> today to make an appointment at our Exton PA CPA office<\/a> to discuss your situation. You can also schedule a consultation at Click Here<\/a>.<\/p>\n An independent contractor\u2019s legitmiate travel costs were found by the IRS to be nondeductible commuting costs and not work-related, resulting in his self-prepared returns being very expensive. The contractor lived in New Jersey and renovated properties in Philadelphia and the surrounding metropolitan area. He typically worked at the job site for several months. When the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[3],"tags":[],"class_list":{"0":"post-2154","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-irs-tax-planning-ideas-tips-news","7":"entry"},"aioseo_notices":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9W9tf-yK","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/2154","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/comments?post=2154"}],"version-history":[{"count":7,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/2154\/revisions"}],"predecessor-version":[{"id":2197,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/2154\/revisions\/2197"}],"wp:attachment":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/media?parent=2154"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/categories?post=2154"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/tags?post=2154"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Copyright \u00a9 2017 Keystone Financial Solutions, P.C.\u00a0 All rights reserved.\u00a0 BE SURE TO READ THE DISCLAIMER PAGE: Content in this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher of this blog makes no representations as to the accuracy or completeness of any information herein, will not be liable for any errors or omissions, and shall not assume liability for any losses, injuries, or damages from the display or use of this information.<\/strong><\/h6>\n","protected":false},"excerpt":{"rendered":"