## Facts

- Edward W. Andrews and his wife filed a joint 1984 federal income tax return; the dispute concerned Edward Andrews’ deductions.
- Andrews lived year-round in Lynnfield, Massachusetts, while serving as president and CEO of a Massachusetts swimming-pool construction company with seasonal operations.
- In addition, Andrews operated a substantial standardbred horse racing and breeding business that had moved its base of operations to the Pompano Beach, Florida area.
- A related Florida division of his Massachusetts company maintained horses in Florida; Andrews managed and trained horses for both the sole proprietorship and the division, with the division effectively covering certain travel costs.
- To conduct the Florida horse business during the Florida racing season, Andrews maintained a Florida residence (initially a condominium, later a single-family home in Lighthouse Point) while keeping the Massachusetts home.
- Andrews typically spent roughly six months per year in Florida for the horse business and the remainder in Massachusetts for the pool business.
- On his 1984 return, Andrews deducted meals and costs associated with maintaining the Florida home as “traveling expenses … while away from home” under I.R.C. § 162(a)(2).
- The Commissioner disallowed the Florida living-expense deductions as nondeductible personal living expenses under I.R.C. § 262, asserting Andrews was not “away from home.”
- The Tax Court sustained the disallowance of the § 162(a)(2) living-expense deductions on the theory that Andrews was not “away from home” during his Florida stays.
- Andrews appealed to the First Circuit.

## Issues

1. Whether, for purposes of I.R.C. § 162(a)(2), Andrews could be considered “away from home” when living in Florida to conduct a separate, substantial horse-racing business while maintaining his Massachusetts residence and business.
2. Whether the Tax Court used an impermissibly restrictive approach to “home” that foreclosed deductions for business-caused duplicate living expenses.
3. Whether Andrews’ Florida meals and living expenses could qualify as deductible traveling expenses under § 162(a)(2) rather than nondeductible personal expenses under § 262.

## Decision

- The First Circuit vacated the Tax Court’s judgment as to the disallowed living-expense travel deductions and remanded.
- The court held the Tax Court’s analysis treated “home” too mechanically and did not properly account for the function of § 162(a)(2) in cases involving duplicate living expenses compelled by business.
- The court concluded that, on the record, Andrews’ Florida living expenses incurred in carrying on the horse business could qualify as deductible business travel expenses, at least in part, if they reflected duplicated living costs caused by business demands.

## Legal Principles

- I.R.C. § 162(a)(2) permits deductions for ordinary and necessary traveling expenses, including meals and lodging, incurred “while away from home” in the pursuit of a trade or business.
- I.R.C. § 262 generally bars deductions for personal living expenses; the core classification question is whether claimed living costs are personal consumption or business-caused additional costs of earning income.
- For § 162(a)(2), “home” is generally tied to the taxpayer’s principal place of business, not merely a chosen personal residence or a location where the taxpayer happens to be living for a period.
- When business requirements force a taxpayer to maintain more than one abode and thereby incur duplicate living expenses, those additional expenses may be deductible under § 162(a)(2) if otherwise ordinary, necessary, and incurred in carrying on a trade or business.
- A categorical denial based solely on the taxpayer’s extended presence in the temporary work location is improper where the taxpayer’s overall business situation supports treating the expenses as business-caused duplication rather than personal choice.

## Conclusion

The First Circuit set aside the Tax Court’s blanket disallowance of Andrews’ Florida living-expense deductions and remanded for further proceedings, recognizing that a taxpayer who maintains two residences because two substantial businesses in different locations require it may deduct the resulting duplicate living expenses under § 162(a)(2) to the extent they are ordinary, necessary, and incurred in carrying on the business.


Andrews v. Commissioner, 931 F.2d 132 (1st Cir. 1991)