Tax Court Denies Deduction for Expenses of Itinerant Pastor

Interesting Tax Court case released today:  Boyd v. Commissioner, T.C. Summary Opinion 2006-36 (3/2/06).  William Boyd is a Pentecostal evangelist and his wife is a singer who performs during his services.  The Boyds do not have a home church and instead travel throughout the country in a RV and conduct religious services at other churches.  Although the Boyds call Prentice, Mississippi their home, they do not own a home or rent an apartment there or anywhere else -- they live out of their RV.  In 1999, they reported:

$45,153 gross income - $61,219 expenses = $16,066 net loss

The Tax Court rejected the Boyds argument that the expenses were deductible as expenses incurred while away from home in pursuit of a trade or business under § 162(a)(2) because they lacked a home for tax purposes:

An employee without a principal place of business may treat a permanent place of residence at which he incurs substantial continuing living expenses as his tax home. Where the taxpayer has neither a principal place of business nor a permanent residence, he has no tax home from which he can be away. His home is wherever he happens to be....

[Section 162(a)(2)] is intended to mitigate the burden of a taxpayer who, because of the travel requirements of his trade or business, must maintain two places of abode and, therefore, incur additional living expenses....Section 162(a)(2) provides relief to a taxpayer who incurs “substantial continuing expenses” of a home which are duplicated by business travel away from home on a temporary basis by allowing a deduction for the expenses of such travel. A taxpayer has a “home” for this purpose only when it appears he has incurred substantial continued living expenses at the permanent place of residence....

Petitioners could not be “away from home” within the intent and meaning of section 162(a)(2) because they had no “home” to be away from.

Interestingly, the IRS did not challenge $47450 of the expenses claimed as a "per diem" -- $130 per day.