-9-
Income Tax Regs. The phrase “on the business premises” has been
construed to mean either (1) living quarters that constitute an
integral part of the business property or (2) premises on which
the employer carries on some of its business activities. See
Dole v. Commissioner, supra at 707.
Living quarters are generally an integral part of business
property if they are physically located on the employer’s
premises. Living quarters are also generally an integral part of
business property if the employee does enough work for the
employer at the living quarters so that the living quarters are
identified with the interests of the business and serve important
business functions. See Adams v. United States, 218 Ct. Cl. 322,
585 F.2d 1060, 1066-1067 (1978); Johnson v. Commissioner, T.C.
Memo. 1983-479.
The home of a high-ranking executive has been considered an
integral part of the employer’s business when the executive held
meetings and business social functions in his home, raising the
status of his company. Adams v. United States, supra.
Similarly, a hotel manager’s residence has been considered an
integral part of the employer’s business when the hotel manager
could observe the hotel from his home, worked from home in the
evenings, and also occasionally entertained important hotel
guests in his home. Lindeman v. Commissioner, 60 T.C. 609
(1973).
Conversely, living quarters physically located off the
worksite are not integral to the employer’s business unless the
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