How to Qualify Exec Training Programs as “Away From Home” - Keep Records

Sep 28, 2026

Uploaded by Mimi

Report outlines how corporate executive training programs with temporary assignments can be treated for tax purposes as being “away from home.” It describes participant recordkeeping steps, including maintaining housing and personal obligations, and corporate reimbursement mechanics using a per diem tied to cost of living with accounting requirements. It then explains IRS criteria for determining a taxpayer’s home under Code sections 162 and 274, applying objective factors to decide whether per diem reimbursements are excluded from gross income.

LanguageEnglish

CategoryExam

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Pages9

Reading Time23 min

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How to Qualify Exec Training Programs as “Away From Home” - Keep Records

Program structure and assignments

What one participant did - recordkeeping actions

What the corporation did - per diem and accounting

When is a taxpayer away from home

Objective tests for a “regular place of abode”

What IRS did - applying the tests

10000 EYECUTTVECoMPENSATIONREPORT Volume 7,Number 2 October 1980 # How to Qualify Exec Training Programs as“Away From Home”—Keep Records Corporations increasingly conduct training pro-grams under which both current and potentialexecutives are given extensive classroom and on-the-job training at various offices of the corpora-tion throughout the United States. ing program,the participating individuals were tobe given a permanent assignment to fill an exec-utive vacancy in one of the corporation's offices.This assignment was almost always at a locationdifferent from where the individual was workingwhen selected to join the program. One corporation that inaugurated such a pro-gram relieved those individuals who were partic-ipating in the training program of their job re-sponsibilities immediately after they were selectedto participate.Their former positions were re-filled,and they were assigned to 12 months oftraining.After satisfactorily completing the train- What one participant did.One individual inthe program followed this course of conduct whileparticipating in the program: □ He kept the apartment he had been rentingin the city where he worked before being selectedfor the program,even though after his assignmentto the training program he did not perform anyduties in that city or its vicinity.He had no rea-sonable expectation that he would return to workin that area. | ALSO IN THIS ISSUE...
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Compensation Briefs | | --- | □ During the training program,he traveled tonumerous offices of the corporation throughoutthe country for short temporary periods to ob-serve the various functions that were performedin those offices.He lived in motels and ate allmeals in restaurants wuile in those cities. □ During the training program,he returned tohis apartment at various times,visited with hisfriends,and attended to personal business matters.He kept a post office box and bank account in —From a Declaration of Principles jointly adoptedby a Committee of the American Bar Associa-tion and a Committee of Publishers. Copyright 1980 by Warren,Gorham&Lamont,Ine.,210 SouthStreet,Boston,Massachusetts 02111.Published Monthly.Second-Class Postage Paid at Boston,Massachusetts.Subscription:$56.00per year.(ISSN 0162-7503)Postmaster:Send address changes toWarren,Gorham &Lamont,Inc.,210 South St.,Boston,MA02111. that city and kept his driver's license and voterregistration in the state in which the apartmentwas located.Finally,he purchased insurance andfiled tax returns in that state. What the corporation did.While the individualwas in the program,the corporation paid him aper diem amount based on the cost of living in thetraining program area.He was required to pro-vide an adequate accounting for all expenses.The per diem amounts did not exceed the expen-ditures. The Internal Revenue Service was faced withthe question of whether the individual was “awayfrom home”during the visits to various cities.Ifso,the employee would not have to report thereimbursements in his gross income since all theother requirements of Section 1.274-5(e)(2)would have been met. When is a taxpayer away from home?A tax-payer's home for purposes of the business expenseprovisions of the Code(Sections 162 and 274)isusually considered to be his regular or principalplace of business or,if he has no regular or prin-cipal place of business because of the nature ofhis trade or business,then his regular

FAQs

What records or actions did the participant keep during the executive training program?

The participant kept the apartment, a post office box, and a bank account in the original city and also maintained a driver’s license and voter registration there. He purchased insurance and filed tax returns in that state.

How did the corporation reimburse participants during the training program?

The corporation paid a per diem amount based on the cost of living in the training area and required adequate accounting for all expenses. The per diem amounts did not exceed the expenditures.

How does IRS determine whether a taxpayer is “away from home” for these visits?

A taxpayer’s home is usually the regular or principal place of business, or if none exists, the regular place of abode. If neither applies, there is no “home,” and the taxpayer cannot be “away.” IRS then applies objective factors, including whether business is performed in the vicinity, duplicated living expenses due to travel, and whether the vicinity was not abandoned or family members reside there or the abode is used frequently for lodging.

Sep 28, 2026

Uploaded by Mimi