Andrews v. Commissioner
931 F.2d 132 (1st Cir. 1991)
Andrews owned a swimming pool
construction business in New England. He also owned a horse breeding
business in Florida.
He owned a house in both
locations, and spent 6 months of the year in each place.
Andrews filed his taxes,
claiming an exemption for qualified meals and lodging for the entire time he was in Florida.
26 U.S.C. §162(a)(2) allows a deduction for unreimbursed expenses
for meals and lodging incurred "while away from home or in the
pursuit of a trade of business."
Andrews claimed he lived in
New England, and the time he spent in Florida was 100% business related.
The IRS denied the deduction.
The IRS argued that Andrews
was living in Florida for those 6 months, and so he couldn't claim a §162(a)(2) deduction because he was at home.
26 U.S.C. §262 specifies that personal living expenses are not
The Tax Court found for the
IRS. Andrews appealed.
The Trial Court found that §162(a)(2) only allows for a deduction while the
taxpayer is "away from home," and Andrews was not away from
home while living in Florida.
The Tax Court found that
Andrews had two homes, at least as far as §162(a)(2) was concerned, so he could never claim a
deduction under §162(a)(2)
no matter which of his two houses he was living in.
The Appellate Court vacated
The Appellate Court
overturned the Tax Court's finding that Andrews had two "tax
The Court found that
Andrews's "tax home" was near his primary place of business
(aka his "major post of duty"), and when he is at his other
place of business (aka his "minor post of duty"), he was
entitled to take a deduction under §162(a)(2).
The Court remanded back to
the Tax Court to determine which of Andrews' businesses was his primary
place of business.
The basic idea behind §162(a)(2) is that if a person has to duplicate their living
expenses because of business, they are entitled to deduct the cost of the
second set of living expenses.
So if you have a house, but
are forced to also pay for a hotel because you are traveling for work,
that's a duplicate living expense.
By the same logic, Andrews'
two businesses required him to have duplicate houses, so he gets to
deduct the expenses for one of them.