Tax Court in Brief | Butterfield v. Comm’r | Travel Reimbursements and Itemized Deductions

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The Tax Court in Brief – August 29th – September 2nd, 2022

Freeman Law’s “The Tax Court in Brief” covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

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Tax Litigation:  The Week of August 29th, 2022, through September 2nd, 2022

Butterfield v. Comm’r, T.C. Summ. Op. 2022-16| August 30, 2022 | Carluzzo, Chief SJT | Dkt. No. 2608-21S


Short Summary:  George Butterfield (Butterfield) was employed as a construction superintendent.  His employment required that he travel to various locations in multiple states to build or remodel truck service stations.  In 2017, he spent 245 nights away from his home performing these services.  The company that Butterfield worked for provided reimbursement for many of his travel expenses.  In 2017, his company paid him a total of $18,375 as travel reimbursements based on a per diem method.  Butterfield’s tax preparer claimed $37,687 of unreimbursed employee expenses (after application of the 50% limitation under section 274(n)) on Butterfield’s 2017 tax return.  The IRS disallowed the unreimbursed employee expenses, and Butterfield sought Tax Court review.

Key Issues

Primary Holdings:

Key Points of Law:

Insight: The Butterfield summary opinion provides a reminder to taxpayers that maintaining records, even after a tax filing, is important.  Taxpayers should strive to keep their records for at least 3 years after the return is filed (but, ideally, six years, if possible).