Do you live in your truck?
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]. However, to claim them a trucker must have a tax home in a real and substantial sense. If a trucker fails to meet this criterion they are considered a “Tax Turtle”, an itinerant or someone who has a home wherever he or she happens to be working[ii]. In the following example the driver exceeded the PO Box requirements and, yet the U.S. Tax Court disallowed his travel expenses.
John was an OTR truck driver who for the year under audit was away from home for 358 days. He claimed to live with his mother[iii].
Inquiry: Whether John had a tax home and whether his mother’s house was indeed his permanent residence were factual questions resolved by the fact that 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”.
This article was written by Mark W. Sullivan, EA, who has been providing taxpayer advocacy, consulting, and litigation services since 1998. Prior to starting a private practice, Mr. Sullivan was an Internal Revenue Officer with the New York, NY, Saint Louis, MO and Washington, D.C. offices of the Internal Revenue Service. He has over a decade of experience advising transportation industry clients with respect to per diem issues.
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.
[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