The Home Office Deduction
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As a result of a recent Supreme Court decision, Commissioner v. Soliman, stricter guidelines have been imposed upon taxpayers regarding their eligibility to take a home office deduction under the "principle place of business" election. As a result of Soliman, determining a taxpayer's principal place of business went from a "facts and circumstances" test, tailored to each individual case, to tests that consider only two factors. Several pronouncements and publications have prescribed guidelines and examples that explain this decision. Soliman, however, has been subject to criticism by the tax profession. Some professionals believe these tests are too strict. The pronouncements have also been subject to scrutiny for being vague. The purpose of this thesis was to gather information from the practicing tax profession to determine what its views were regarding Soliman and the subsequent pronouncements. Surveys were given to fifteen tax professionals. The purpose of the surveys was to determine whether Soliman provided adequate guidelines for determining a taxpayer's principal place of business, as well as to analyze whether the recent IRS pronouncements are consistently interpreted and applied. Survey results support the finding that the effects of Soliman are not universally accepted, and that interpretation of its guidelines do not always produce consistent and dependable conclusions. Therefore, it is proposed that the courts revert to the "facts and circumstances" test that was used prior to Soliman.