Summer Job Expenses Not Deductible; Foreign Students Not “Away from Home” (Liljeberg, TC)

In a case of first impression, nonresident alien students, who participated in the U.S. State Department’s Summer Work Travel Program (SWTP) were not entitled to deduct as unreimbursed employee expenses amounts paid in connection with their participation in SWTP because they were not “away from home” in pursuit of a trade or business. The taxpayers were fulltime students who came to the U.S. to work for a single summer before returning to their home countries.

Two of the taxpayers had no business connections with their home countries and the third terminated his employment before arriving in the U.S. and did not resume it on his return. Since the taxpayers did not have any business connections with their home countries, they could not have been “away from home” during the tax year at issue. There was no requirement that an SWTP participant maintain a second abode in his home country. Nor was there any evidence to corroborate a contractual requirement to that effect imposed on them by their sponsors, employers, or any other party. Since no business exigency dictated the location of the taxpayers’ usual residence, then the mere fact they took temporary employment elsewhere cannot supply a compelling business reason for continuing to maintain that residence.

Moreover, notwithstanding that health insurance was required as a condition of the students’ participation in the SWTP, insuring against the costs of maintaining a taxpayer’s health is primarily a personal concern, not merely a business concern and that the expense of such insurance is deductible only under Code Sec. 213.

S. Hantzis, CA-1, 81-1 ustc ¶9144, followed.

R. Liljeberg, 148 TC —, No. 6, Dec. 60,849

Other References:

Code Sec. 162

CCH Reference – 2017FED ¶8570.1252

Code Sec. 213

CCH Reference – 2017FED ¶12,543.77

Tax Research Consultant

CCH Reference – TRC INDIV: 42,052

CCH Reference – TRC BUSEXP: 24,152



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