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:

The One Year Rule. A temporary assignment cannot be expected to last beyond 12 months (1 year)

one day left

Remember that Corporate compliance is a lower threshold than PERSONAL compliance

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

Revenue Procedure 2019-48

Previous: Revenue Procedure 2011-47


Wage Recharacterization in Healthcare Staffing and Other Industries

The IRS released this Ruling during the peak of the agency audits in 2012

Revenue Ruling 2012-25

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 acquisition expenses for the RV are not deductible as a business expense (as opposed to the interest and taxes)

Jackson v Commissioner 2014.08.07

Nurses as Independent Contractors

These citations do not mean that it is impossible to be an IC. There are a few agencies that have successfully defended their model.

PLR On Nurses as Contractors


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