## Facts

- Marc G. Bissonnette, a ferryboat captain, worked voyages departing from and returning to Seattle, Washington (his tax home), traveling to Victoria, British Columbia.
- He routinely worked extended turnaround runs completed within 24 hours, typically lasting 15 to 17 hours.
- The runs included layovers in Victoria: about six hours in the off-season and about one-half hour to one hour during peak season.
- Although he was not formally “off duty,” the employer assigned a second captain during layovers so Bissonnette could rest.
- During longer layovers, Bissonnette generally ate and then slept for several hours aboard the vessel before the return trip.
- For tax years 2001–2003, Bissonnette paid his own meals and incidental expenses (M&IE) and claimed deductions under I.R.C. § 162(a)(2), computing amounts using federal M&IE per diem rates under applicable revenue procedures.
- The IRS disallowed the deductions, asserting the travel was not “away from home” because it did not require sleep or rest under the governing standard.

## Issues

1. Whether extended, same-day turnaround travel completed within 24 hours can satisfy the “away from home” requirement of I.R.C. § 162(a)(2) when the work schedule requires substantial sleep or rest at the destination.
2. Whether, if the taxpayer is “away from home,” M&IE incurred during the layover is deductible as a travel expense.
3. Whether the taxpayer may substantiate the amount of deductible M&IE using federal per diem rates when time, place, and business purpose are established.

## Decision

- The Tax Court held that Bissonnette’s turnaround runs required substantial sleep or rest during the Victoria layovers and therefore constituted travel “away from home” under § 162(a)(2).
- The court allowed deductions for M&IE attributable to the qualifying travel.
- The court permitted use of federal M&IE per diem rates to substantiate the amount of the deduction, subject to applicable substantiation rules and limitations.

## Legal Principles

- I.R.C. § 162(a)(2) allows deductions for ordinary and necessary travel expenses, including meals, incurred “while away from home” in the pursuit of a trade or business.
- Under the Supreme Court’s “sleep or rest” standard, a taxpayer is “away from home” only for trips that require a stop for substantial sleep or rest; the analysis is functional rather than determined by whether the trip crosses midnight.
- Same-day travel can qualify when work demands and the travel schedule impose a real need for substantial sleep or rest at a location away from the tax home.
- When “away from home” status is established, federal M&IE per diem rates may be used to substantiate amounts in lieu of detailed meal receipts if the taxpayer substantiates time, place, and business purpose and otherwise satisfies applicable rules.

## Conclusion

The Tax Court concluded that unusually long, same-day turnaround voyages requiring substantial sleep or rest at an away port meet § 162(a)(2)’s “away from home” requirement, allowing M&IE deductions substantiated using federal per diem rates when substantiation requirements are met.


Bissonnette v. Commissioner, 127 T.C. 124 (2006)