## Facts

- James O. Henderson, an individual taxpayer, worked in 1990 as a stage hand for Walt Disney’s World of Ice, a traveling show, and was hired on a tour-by-tour basis.
- The show traveled to numerous locations (including thirteen states and Japan), with each stop lasting days or weeks; Henderson received a per diem to cover expenses while on tour.
- Between tours, Henderson returned to Boise, Idaho, where his parents lived; he stayed at their home, kept belongings and his dog there, and used it as a mailing address.
- Henderson maintained personal and civic connections to Idaho, including voter registration, state income tax payments, an Idaho driver’s license, and an Idaho bank account.
- In 1990, he spent roughly two to three months in Boise between tours and did only minimal work there, including a single stagehand job for a concert and minor tasks at his parents’ home.
- On his 1990 federal income tax return, Henderson claimed deductions under I.R.C. § 162(a)(2) for travel-related living expenses, asserting Boise was his “tax home.”
- The Commissioner disallowed the deductions and determined a tax deficiency; the Tax Court upheld the disallowance, and Henderson appealed.

## Issues

1. Whether Boise, Idaho qualified as Henderson’s “tax home” under I.R.C. § 162(a)(2) when his 1990 employment had no substantial business connection to Boise.
2. Whether Henderson was an itinerant taxpayer with no tax home, making his 1990 travel-related living expenses nondeductible because he was not “away from home” within the meaning of § 162(a)(2).

## Decision

- The Ninth Circuit affirmed the Tax Court’s decision sustaining the Commissioner’s deficiency determination.
- The court held Boise was not Henderson’s tax home for § 162(a)(2) purposes because his choice to return there was personal, not business-driven.
- The court concluded Henderson had no tax home in 1990 and was an itinerant taxpayer; therefore, his travel-related living expenses were not deductible under § 162(a)(2).
- Judge Kozinski dissented.

## Legal Principles

- I.R.C. § 162(a)(2) allows deductions for ordinary and necessary travel expenses incurred “while away from home in the pursuit of a trade or business.”
- For § 162(a)(2), a taxpayer’s tax home is generally the principal place of business; in limited circumstances, it may be a residence where the taxpayer incurs substantial, continuing living expenses for business reasons.
- The statutory purpose is to mitigate duplicative living costs caused by business travel that requires maintaining both a permanent residence and temporary lodging elsewhere.
- A taxpayer whose work is continuously on the road, who lacks a business base, and who does not maintain substantial continuing residence expenses for business reasons is an itinerant with no tax home; such a taxpayer cannot satisfy the “away from home” requirement.

## Conclusion

Because Henderson’s employment in 1990 was effectively continuous travel with no meaningful business base in Boise and no substantial, ongoing residence expenses there attributable to business necessity, he was an itinerant without a tax home; his travel-related living expenses were therefore not deductible under I.R.C. § 162(a)(2).


Henderson v. Commissioner, 143 F.3d 497 (9th Cir. 1998)