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:
Break in Service Rules: How long do I have to be away to restart the one year clock?
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 break is continuous employment: Reg 31.3402(h)(4)-1 30 day payroll break
7 months is preferred: IRS PLR 200026025 – 7 month break in service
12 months is more significant (Look in the 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
This is how the IRS treats per diems. Note: The term “substantiated” means roughly the same as “by receipt” or “supported”
Revenue Procedure 2011-47
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 of 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. It is 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 expenses for the RV are not deductible as business expenses (as opposed to the interest and taxes)
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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