Mileage

[LdiJ]

What is the name of your state (only U.S. law)? NA for this question, its federal

I am not the tax professional who handled the original returns.

Taxpayer is a skiller laborer, who belongs to a Union, who is sent out on jobs by the Union. Those jobs can be local, or they can be as much as three hours away from home and in another state. These jobs are long term some less than a year, some more than a year. No matter what the distance is, he commutes back and forth from home every day. He does not stop at the Union hall first, as its an hour away from his home and often in a different direction than the job. He does no administrative or management work at home.

For the last 15 years he has been deducting his mileage from home to the job and back on form 2106. He recently got audited for 2010 and the IRS has denied the mileage deduction stating that it was commuting miles. He was at that particular site for more than a year.

I cannot think of anything that would mitigate this for him. Anybody else have any ideas?

 

[Zigner]

What is the name of your state (only U.S. law)? NA for this question, its federal

I am not the tax professional who handled the original returns.

Taxpayer is a skiller laborer, who belongs to a Union, who is sent out on jobs by the Union. Those jobs can be local, or they can be as much as three hours away from home and in another state. These jobs are long term some less than a year, some more than a year. No matter what the distance is, he commutes back and forth from home every day. He does not stop at the Union hall first, as its an hour away from his home and often in a different direction than the job. He does no administrative or management work at home.

For the last 15 years he has been deducting his mileage from home to the job and back on form 2106. He recently got audited for 2010 and the IRS has denied the mileage deduction stating that it was commuting miles. He was at that particular site for more than a year.

I cannot think of anything that would mitigate this for him. Anybody else have any ideas?

This is a pretty clear-cut example of commuting, IMO

 

[latigo]

What is the name of your state (only U.S. law)? NA for this question, its federal

I am not the tax professional who handled the original returns.

Taxpayer is a skiller laborer, who belongs to a Union, who is sent out on jobs by the Union. Those jobs can be local, or they can be as much as three hours away from home and in another state. These jobs are long term some less than a year, some more than a year. No matter what the distance is, he commutes back and forth from home every day. He does not stop at the Union hall first, as its an hour away from his home and often in a different direction than the job. He does no administrative or management work at home.

For the last 15 years he has been deducting his mileage from home to the job and back on form 2106. He recently got audited for 2010 and the IRS has denied the mileage deduction stating that it was commuting miles. He was at that particular site for more than a year.

I cannot think of anything that would mitigate this for him. Anybody else have any ideas?

To "mitigate" is not one of IRS's favorite pastimes. In fact they treat it as two four letter words.

 

[tranquility]

What is the name of your state (only U.S. law)? NA for this question, its federal

I am not the tax professional who handled the original returns.

Taxpayer is a skiller laborer, who belongs to a Union, who is sent out on jobs by the Union. Those jobs can be local, or they can be as much as three hours away from home and in another state. These jobs are long term some less than a year, some more than a year. No matter what the distance is, he commutes back and forth from home every day. He does not stop at the Union hall first, as its an hour away from his home and often in a different direction than the job. He does no administrative or management work at home.

For the last 15 years he has been deducting his mileage from home to the job and back on form 2106. He recently got audited for 2010 and the IRS has denied the mileage deduction stating that it was commuting miles. He was at that particular site for more than a year.

I cannot think of anything that would mitigate this for him. Anybody else have any ideas?

Obviously, "commuting" mileage is generally not deductible. However, when the workplace changes, commuting means in the same metropolitan area where you normally work. While I don't think it would fly, you might argue some of the jobs (while long term) are not where he normally works so is temporary and outside of his metro area. In other words, the purported commuting is to a temporary work site outside the metropolitan area where he lives and normally works.

 

[Silverplum]

Obviously, "commuting" mileage is generally not deductible. However, when the workplace changes, commuting means in the same metropolitan area where you normally work. While I don't think it would fly, you might argue some of the jobs (while long term) are not where he normally works so is temporary and outside of his metro area. In other words, the purported commuting is to a temporary work site outside the metropolitan area where he lives and normally works.

An article discussing your (excellent) point: http://traveltax.com/TaxEdArticles/TravellingTaxRelated/Commuting vs Transportation.pdf. They refer, among others, to "Rule 99-7." Sounds mysterious to me.

Do note, everyone: the article is from 2008.

 

[LdiJ]

Obviously, "commuting" mileage is generally not deductible. However, when the workplace changes, commuting means in the same metropolitan area where you normally work. While I don't think it would fly, you might argue some of the jobs (while long term) are not where he normally works so is temporary and outside of his metro area. In other words, the purported commuting is to a temporary work site outside the metropolitan area where he lives and normally works.

That works for other years...but he was at the same jobsite for the last part of 2009, all of 2010, and the first part of 2011...so more than a year. So far the IRS has not brought up any year but 2010.

 

[tranquility]

That works for other years...but he was at the same jobsite for the last part of 2009, all of 2010, and the first part of 2011...so more than a year. So far the IRS has not brought up any year but 2010.

The last cite kills it for more than a year.


Peurifoy v. Commissioner, 358 US 59 (1958)

Resolution of this case as presented to us turns, therefore, upon a narrow question of fact—Was the petitioners' 61*61 employment "temporary" or "indefinite"? The Tax Court, stating that "each case must be decided upon the basis of its own facts and circumstances." 27 T. C., at 157, found that their employment was temporary. The Court of Appeals, also recognizing that the question was "one of fact," held that on the record the Tax Court's finding of temporary employment was "clearly erroneous." 254 F. 2d, at 487.

Harry F. Schurer v. Commissioner of Internal Revenue, 3 TC 544 (1944)
Leach v. Commissioner of Internal Revenue, 12 TC 20 (1949)
Albert v. Commissioner of Internal Revenue, 13 TC 129 (1949)

This case is not distinguishable in principle from the early case of Mort L. Bixler, 5 B. T. A. 1181. The petitioner in that case was the husband, while here the wife is the petitioner, but in each the alleged traveler was, so far as the record shows, the only one in the family gainfully employed. The employment in each case lacked permanence, but, on the other hand, was indefinite in duration rather than obviously temporary, in that it was not the sort of employment in which termination within a short period could be foreseen, as was the situation in Harry F. Schurer, 3 T. C. 544, and E. G. Leach, 12 T. C. 20. The suggestion or warning that there might be a change of station upon short notice does not justify extensive discussion, since the evidence fails to show how probable this possibility was, except for the fact that the petitioner actually remained on duty in Lowell from 1943 until the end of 1945. Other cases similar to this one involving employment for a limited, indefinite period are Ney v. United States, 171 Fed. (2d) 449; certiorari denied, 336 U.S. 967; George W. Lindsay, 34 B. T. A. 840; John D. Johnson, 8 T. C. 303; and Robert F. Green, 12 T. C. 656.

Deltoro v. COMMISSIONER OF INTERNAL REVENUE, 2010 TC Summary Opinion 123

Employment is temporary if its termination can be foreseen within a fixed or reasonably short period of time. Mitchell v. 9*9 Commissioner, supra at 581; Stricker v. Commissioner, 54 T.C. 355, 361 (1970), affd. per curiam 438 F.2d 1216 (6th Cir. 1971). Employment that merely lacks permanence is indefinite unless termination is foreseeable within a short period of time. Norwood v. Commissioner, 66 T.C. 467, 470 (1976); Kroll v. Commissioner, supra at 562. Section 162(a) further provides that the taxpayer shall not be treated as being temporarily away from home during any period of employment if such period exceeds 1 year.

 

[tranquility]

Also, with that kind of mileage being denied, you might start thinking about penalty abatement. Is this going to rise to substantial understatement? If so, burn the prior preparer.

 

[LdiJ]

Also, with that kind of mileage being denied, you might start thinking about penalty abatement. Is this going to rise to substantial understatement? If so, burn the prior preparer.

Yep, its substantial understatement. Unfortunately, the preparer is someone else in our firm...sigh...who is now 75 years old and only works during the tax season. Good times all around...I haven't had much luck with penalty abatement in the last couple of years, but I am going to have to give it a solid try.

 

[tranquility]

Tough times. While you must represent your client, loyalty to workmates is a conflicting issue. We both know the most ethical course, however. Pity.

 

[davew128]

Yep, its substantial understatement. Unfortunately, the preparer is someone else in our firm...sigh...who is now 75 years old and only works during the tax season.

Thankfully I was able to persuade a similar person to do the same in my firm. Too many wink wink deals on long time clients to help them out (paying yourself a management fee for Sch C on your own Sch E rental activity to build up SS credits for example). A lof of small preparers around here like that have approached me either to help them or buy their practices and I almost always determine the liability from their low competence to be a dealbreaker.