Does living in your truck make you a tax turtle?
If you are an OTR truck driver who lives in the truck you may be a classified a "tax turtle" by IRS and unable to claim travel-related expenses.
There are frequent posts on trucker social media forums and even in trucking publications that suggest merely having a post office box will be sufficient to meet the IRS’ regulations for claiming travel-related expenses.
- Self-employed truck drivers subject to DOT hours of service regulations are entitled to claim meals and incidental expenses and other travel-related expense as a tax deduction[i].
- To claim travel expenses a trucker must have a tax home in a real and substantial sense.
- A trucker that fails to meet these criterion is considered a “tax turtle”, an itinerant or someone who has a home wherever he or she happens to be working[ii].
Would John be classified a "tax turtle"?
John was an OTR truck driver who for the year under audit was away from home for 358 days, exceeded the PO Box requirements and claimed to live with his mother[iii].
Tax Court inquiry
Whether John had a tax home and whether his mother’s house was indeed his permanent residence were factual questions:
- He made only one visit to stay with his mother during the year in question, and
- the visit lasted three days while he served jury duty.
- On the five other occasions on which John visited the Kansas City area, he slept in his truck parked in a casino parking lot.
- Additionally, John kept no belongings at his mother’s house; instead, he kept them in a rented storage locker.
- Most significantly, John bore no expenses in maintaining a home.
- He paid no money for rent, utilities, or any other household expenses during the year under audit.
Tax Court ruling
John was a “tax turtle” who was not entitled to claim per diem and travel-related expenses.
As this case demonstrates the PO Box gambit will not survive scrutiny in a tax audit. For a self-employed truck who lives in their truck to claim travel-related expenses, like per diem, some amount of expenses must be incurred at your declared tax home. It would also be wise to spend some time there lest you risk being classified a “tax turtle”.
Try Per Diem Plus for Owner Operators free for 30 days - no credit card required.
Available as a $7.99 monthly subscription on Google Play and App Store
Per Diem Plus is a proprietary mobile software application that was designed by truckers and built by tax pros. It is the only IRS-compliant mobile app that automatically tracks each qualifying day of travel in the USA & Canada and replaces ELD backups (logbooks) to substantiate away-from-home travel.
About the Author
Mark is tax counsel for Per Diem Plus. With nearly two decades of experience advising trucking companies on per diem issues, Mark was responsible for defining the Per Diem Plus software logic rules that automatically calculates trucker per diem in accordance with IRS regulations. He also previously served as the consulting per diem tax expert for Omnitracs.
In addition to his time working with Per Diem Plus, Mark works in private practice as an Enrolled Agent at Mark Sullivan Consulting, PLLC specializing in federal tax controversy representation and consulting. He also served as the consulting and expert witness for the Federal Defenders Office and private defense counsel in financial crimes cases in multiple federal district courts. Contact Mark W. Sullivan, EA
Please remember that everyone’s financial situation is different. This article does not give and is not intended to give specific accounting and/or tax advice. Please consult your own tax or accounting professional.
Copyright 2018 Per Diem Plus, LLC. All rights reserved
[i] IRS Rev. Proc. 2011-47 (most recently superseded by 2017-42) & IRC 162(a)(2); Reg 1.162-2) A tax deduction is allowed for ordinary and necessary traveling expenses incurred by a taxpayer while away from home in the conduct of a trade or business. A truck driver is not away from home unless his or her duties require the individual to be away from the general area of his or her tax home for a period substantially longer than an ordinary workday and it is reasonable to need rest or sleep.
[ii] Rev. Ruling 75-432
[iii] HATEM ELSAYED, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 8935-07S. Filed May 26, 2009