Tax Article -Tax Court Allows Day-Trip Worker Away-From-Home Expenses Based On Sleep-Or-Rest Rule

Recently, the IRS lost on an attempt to restrict the definition of "away from home" meals and incidental expenses to those business trips requiring more than 24 hours to complete or for which a full night's sleep or rest is needed. The Tax Court recently held that a demanding 17-hour work day that included a mid-trip four hour snooze was enough to qualify meals and incidentals at the away-from-home location for a deduction. The Tax Court also found that the day was long enough that the standard per diem rate need not be pro-rated.

Usually, food and incidental expenses are deductible if incurred while traveling away from home on business trips requiring sleep or rest. Once sleep or rest is required, meals automatically are allowed, even though they are otherwise a personal expense if taken without a client and a business discussion. The taxpayer may take the standard per diem meals and incidental expense amount even though meals and incidental expenses are not actually incurred. In both cases, however, only a 50 percent deduction for meals is allowed under the usual business meal expense limitation.

The Tax Court found that the need for sleep or rest may be evaluated based on the particular taxpayer's age and physical condition, among other variables. 

Please contact Feeley & Driscoll's Boston Accounting Firm by Email or call us at 1 (888) 875-9770.

related links