What is a "metropolitan area" for transportation cost purposes?While commuting expenses are generally nondeductible non·de·duct·i·ble adj. Not deductible, especially for income-tax purposes. Adj. 1. nondeductible - not allowable as a deduction deductible - acceptable as a deduction (especially as a tax deduction) under Sec. 262, transportation casts to a work location are deductible, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Rev. Rul. 99-7, if the taxpayer travels between his or her residence and: 1. A temporary work location outside the metropolitan area where the taxpayer lives and normally works. 2. A temporary work location, regardless of distance, if the taxpayer has one or more work locations away from his or her residence. 3. Another work location, if the taxpayer's residence is his or her principal place of business under Sec. 280A(c)(1)(A). In Corey L. Wheir, TC Summ. Op. 2004-117, the Tax Court considered, for the first time, the definition of "metropolitan area," to determine if the taxpayer's transportation expenses were deductible. Facts The taxpayer was a union boilermaker boil·er·mak·er n. 1. One that makes or repairs boilers. 2. Slang A drink of whiskey with a beer chaser. boilermaker Noun a person who works with metal in heavy industry living and working in Wisconsin Rapids Wisconsin Rapids, city (1990 pop. 18,245), seat of Wood co., central Wis., on the Wisconsin River; inc. 1869. Paper, heating equipment, plastics, chemicals, paint, and iron and steel are produced. , WI. He received assignments from the union office and was dispatched on jobs ranging from one day to several months, located throughout Wisconsin. He did not report to any union office, had no other fixed place of business and was not allowed, under union rules, to reject any assignments. Most of the assignments did not require overnight travel. The taxpayer deducted travel expenses for jobs greater than 35 miles from his home. The IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. disallowed all the claimed travel expenses; it contended that, because Wisconsin Rapids is not a metropolitan area as defined by the U.S. Census Bureau Noun 1. Census Bureau - the bureau of the Commerce Department responsible for taking the census; provides demographic information and analyses about the population of the United States Bureau of the Census , the entire stale was the taxpayer's normal work area in applying Rev. Rul. 99-7. Tax Court's Decision The court disagreed with the Service's interpretation, holding that Rev. Rul. 99-7 does not define "metropolitan area" or refer to another official standard (i.e., the Census Bureau definition). By following the IRS'S interpretation, the court reasoned that taxpayers living outside such areas would be at a disadvantage vis-a-vis taxpayers living within metropolitan boundaries. As a result, it sustained the taxpayer's position of deducting transportation expenses for assignments more then 35 miles from his home. Conclusion Tax advisers need to be aware that Wheir, a Tax Court Summary Opinion, cannot be cited as authority. However, it does provide some practical guidance for deductions claimed under Rev. Rul. 99-7 when the taxpayer's metropolitan area may not be clear. Vinay S Vinay may erfer to:
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion