A. A very interesting question. For once I agree that the CPA may be correct in his/her thinking!
I must point out that this is my personal interpretation.
IRS Publication 463, which deals with issues of deductible mileage, states –
“If you have an office in your home that qualifies as a principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business.”
Pub 463 does not state that in order to deduct mileage between a home office and another work location the office in your home must qualify for the home office deduction.
IRS Publication 587, which deals with the home office issue, states –
“To qualify to deduct expenses for business use of your home, you must use part of your home:
* Exclusively and regularly as your principal place of business (defined later)”
The publication then goes on to describe the three (3) individual tests for “exclusive use”, “regular use”, and “principal place of business” as three separate considerations.
In makes the following statement regarding the “principal place of business” test –
“Under the principal place of business test, your home must be your principal place of business for that trade or business. To determine whether your home is your principal place of business, you must consider:
* The relative importance of the activities performed at each place where you conduct business, and
* The amount of time spent at each place where you conduct business.”
Pub 587 also says, “Your home office will qualify as your principal place of business if you meet the following requirements.
* You use it exclusively and regularly for administrative or management activities of your trade or business.
* You have no other fixed location where you conduct substantial administrative or management activities of your trade or business.”
I take this to be an alternative test for “principal place of business”, and not as a strict definition of “principal place of business”. The instructions seem to say that if these two conditions are met than you will automatically have a “principal place of business”, but not, in my opinion, that these two conditions must be met in order to have a “principal place of business”.
I recall attending a tax conference years ago with a seminar that addressed this issue. If memory serves me the seminar instructors indicated back then that a home office did not need to qualify for a tax deduction (i.e. exclusive use) in order for one to be able to deduct mileage from the home office to another business location, as long as the home office was the “principal place of business”.
I would be interested in hearing what my fellow tax bloggers have to say on this issue.