References and Citations

Since I deal with an area of the tax code which is more prone to urban myth and opinions instead of the actual facts, I am providing some citations to show what the IRS really thinks:


Break in Service Rules: How long to I have to be away to restart the one year clock?

30 days is not enough: IRS PLR 200020055 – 1 month break disregarded

Less than 30 days breaks is continuous employment: Reg 31.3402(h)(4)-1 30 day payroll break

7 months is preferred: IRS PLR 200026025 – 7 month break in sevice

12 months is more significant (Look in last Section)   Chief Counsel Advisory 200025052 – 12 Months


Distance Rules – Overnight Stay Required to be “Away from Home. There is no “50 mile rule”

This is well established in case history so here are a few: Note: When reading court cases, “Petitioner” refers to the taxpayer and “Respondent” is the IRS.

Marple v Commissioner May 2007


Governing Document for Per Diem Method of Reimbursement

This is how the IRS treats per diems.  Note: The term “substantiated” means roughly the same as “by receipt” or “supported”

Revenue Procedure 2011-47

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The Standard by Which The IRS Determines a Tax Home / Residence 

The IRS uses Revenue Ruling 73-529 as its primary guideline for determining a taxpayers tax home status which I have linked below. In a nutshell, to have a fixed tax home (vs an itinerant tax home that goes wherever you work) you must maintain a regular job in one area, OR NOT have a place of regular income and duplicate living expenses in the form or rent/mortgage while maintaining a second residence for work.

Revenue Ruling 73-529



Per Diems as Treated as Wages

This DOL case shows the problems with low wages where the per diem is treated as a substitute for wages.

Gagnon v United Technisource


 

State Tax Reporting Thresholds

This is a good reference for employers to settle the confusion over whether an employee is liable for state taxes in a non-resident work state. It is a brief for a bill submitted in 2007 to Congress addressing the temporary workforce. Its a 2007 publication but a good starting point.

State Tax Withholding Thresholds


 

A Seasonal Assignment is a Permanent Job

If you work in the same place each year and earn significant income, unless there is income in another location that exceeds the income you earn in this place, the seasonal job is your tax residence

Revenue Ruling 75-432


Deductibility of RV Expenses as a 2nd travel residence 

Since an RV is generally used as a residence > 14 days, and its virtually impossible to have an exclusive carve out for an office, the expenses for the RV are not deductible as a business expenses (as opposed to the interest and taxes)

Jackson v Commissioner 2014.08.07


Nurses as Independent Contractors

PLR On Nurses as Contractors

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