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In the notice of deficiency, respondent disallowed the
deductions for meals and lodging expenses claimed for each year
in issue. According to the explanation in the notice,
petitioner’s “travel/living expenses while in Guam are not
deductible” because petitioner’s assignment to Guam was “for a
period of at least 24 months”. For 1996, respondent also imposed
a $100 addition to tax under section 6651(a) because petitioner’s
1996 return was filed more than 60 days late.
Discussion
I. Traveling Expense Deductions
Ordinarily, a taxpayer may not deduct personal expenses,
such as the costs of meals and lodging. See sec. 262. However,
traveling expenses, including meals and lodging, incurred by a
taxpayer during the taxable year while traveling away from home
in the pursuit of a trade or business are deductible. See sec.
162(a)(2). To qualify for deduction under section 162(a)(2), the
traveling expense must be: (1) Reasonable and necessary; (2)
incurred while the taxpayer was traveling “away from home”; and
(3) directly related to the conduct of the taxpayer’s trade or
business. Commissioner v. Flowers, 326 U.S. 465, 470 (1946).
The reference to “home” in section 162(a)(2) means the taxpayer’s
tax home. See Mitchell v. Commissioner, 74 T.C. 578, 581 (1980);
Foote v. Commissioner, 67 T.C. 1, 4 (1976); Kroll v.
Commissioner, 49 T.C. 557, 561-562 (1968).
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