unusual overnight stay deduction


G

Gary Goodman

A friend has an unusual situation. She is Orthodox Jewish,
which means she can't travel on the Sabbath (from sundown on
Friday until sundown on Saturday).

She is opening a new office in another city. The distance
from her home to the office is about 14 miles. Her office
hours in the new office will be on Fridays. Because of the
early sundown on Friday during the winter, she will not be
able get home before sundown.

She has asked me if a hotel room would be a deductible
business expense on the Fridays she is in her new office.
The company structure is an S-Corp and the corporation would
pay for the overnight stay.

I told her that I would look into it, but that I didn't
think it would qualify as a deductible expense. Has anybody
encountered a similar situation?

Gary
 
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D

Dick Adams

Gary Goodman said:
A friend has an unusual situation. She is Orthodox Jewish,
which means she can't travel on the Sabbath (from sundown on
Friday until sundown on Saturday).

She is opening a new office in another city. The distance
from her home to the office is about 14 miles. Her office
hours in the new office will be on Fridays. Because of the
early sundown on Friday during the winter, she will not be
able get home before sundown.

She has asked me if a hotel room would be a deductible
business expense on the Fridays she is in her new office.
The company structure is an S-Corp and the corporation would
pay for the overnight stay.

I told her that I would look into it, but that I didn't
think it would qualify as a deductible expense. Has anybody
encountered a similar situation?
Sandy Koufax (the Hall of Fame Baseball player) was, and
still is, an observant Jew. He made arrangements with
his employer so that he neither pitched nor traveled on
the Sabbath.

As an auditor, I would look very closely at the facts and
circumstances in this situation. I knew someone who 30+
years ago purchased a studio condo on the near north side
of Chicago for exactly the same reason. The condo was
walking distance to a synagogue.

Dick
 
J

Jonathan Kamens

Gary Goodman said:
I told her that I would look into it, but that I didn't
think it would qualify as a deductible expense. Has anybody
encountered a similar situation?
Why not? It looks to me like a legitimate business travel
expense. The only difference between this and any other
hotel room paid for by a company during authorized business
travel is that time and religious observance, rather than
distance, are what is forcing her to stay overnight.

If the company needs her to be in the new office on Fridays,
and if she can't get home in time for the Sabbath during the
winter when sundown is early, then there is a legitimate
business need for the company to pay for her hotel room.

As an observant Jew, I want to make sure you understand the
level of restriction we're talking about here.... This woman
is not *choosing* to stay in a hotel room over the Sabbath.
In fact, it's almost certainly the case that she'd very much
rather be home with her family, since I can assure you that
observing the Sabbath alone in a hotel is by no means a fun
experience. For her, traveling home after sundown on Friday
is simply *impossible*. In traditional Jewish law, the laws
of the Sabbath cannot be violated unless human life is at
stake.
 
W

Wayne Brasch

Gary Goodman said:
A friend has an unusual situation. She is Orthodox Jewish,
which means she can't travel on the Sabbath (from sundown on
Friday until sundown on Saturday).

She is opening a new office in another city. The distance
from her home to the office is about 14 miles. Her office
hours in the new office will be on Fridays. Because of the
early sundown on Friday during the winter, she will not be
able get home before sundown.

She has asked me if a hotel room would be a deductible
business expense on the Fridays she is in her new office.
The company structure is an S-Corp and the corporation would
pay for the overnight stay.

I told her that I would look into it, but that I didn't
think it would qualify as a deductible expense. Has anybody
encountered a similar situation?
I would agree with you. Congress and the tax law does not
provide for such a situation. On audit, I believe IRS would
say that hotel stay is not an ordinary and necessary
business expense. Chances of being audited are rather low,
though. Explain all of this and see what she thinks.

Wayne Brasch, CPA, M. S. Taxation
 
J

Jo Firey

Gary Goodman said:
A friend has an unusual situation. She is Orthodox Jewish,
which means she can't travel on the Sabbath (from sundown on
Friday until sundown on Saturday).

She is opening a new office in another city. The distance
from her home to the office is about 14 miles. Her office
hours in the new office will be on Fridays. Because of the
early sundown on Friday during the winter, she will not be
able get home before sundown.

She has asked me if a hotel room would be a deductible
business expense on the Fridays she is in her new office.
The company structure is an S-Corp and the corporation would
pay for the overnight stay.

I told her that I would look into it, but that I didn't
think it would qualify as a deductible expense. Has anybody
encountered a similar situation?
Given the short distance from her office to her home, it is
hard to argue that she would could not leave work early
enough to get home. She is going to have to leave early to
be anywhere by sundown in any case.

Especially since staying in a hotel from sunset Friday to
Sunset Saturday will require other to work during that time
period on her behalf.

Jo
 
P

Paul A Thomas

Gary Goodman said:
A friend has an unusual situation. She is Orthodox Jewish,
which means she can't travel on the Sabbath (from sundown on
Friday until sundown on Saturday).

She is opening a new office in another city. The distance
from her home to the office is about 14 miles. Her office
hours in the new office will be on Fridays. Because of the
early sundown on Friday during the winter, she will not be
able get home before sundown.

She has asked me if a hotel room would be a deductible
business expense on the Fridays she is in her new office.
The company structure is an S-Corp and the corporation would
pay for the overnight stay.

I told her that I would look into it, but that I didn't
think it would qualify as a deductible expense. Has anybody
encountered a similar situation?
There does not seem to be a valid ~business~ reason for the
hotel stay, so no, it would not be a business deduction.
 
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H

Herb Smith

Gary Goodman said:
A friend has an unusual situation. She is Orthodox Jewish,
which means she can't travel on the Sabbath (from sundown on
Friday until sundown on Saturday).

She is opening a new office in another city. The distance
from her home to the office is about 14 miles. Her office
hours in the new office will be on Fridays. Because of the
early sundown on Friday during the winter, she will not be
able get home before sundown.

She has asked me if a hotel room would be a deductible
business expense on the Fridays she is in her new office.
The company structure is an S-Corp and the corporation would
pay for the overnight stay.

I told her that I would look into it, but that I didn't
think it would qualify as a deductible expense. Has anybody
encountered a similar situation?
Sounds like a personal expense to me, not related to any
business purpose. Why doesn't she just adjust her office
hours, as necessary, to get home before sundown (only 14
miles)?
 
H

Harlan Lunsford

Gary said:
A friend has an unusual situation. She is Orthodox Jewish,
which means she can't travel on the Sabbath (from sundown on
Friday until sundown on Saturday).

She is opening a new office in another city. The distance
from her home to the office is about 14 miles. Her office
hours in the new office will be on Fridays. Because of the
early sundown on Friday during the winter, she will not be
able get home before sundown.

She has asked me if a hotel room would be a deductible
business expense on the Fridays she is in her new office.
The company structure is an S-Corp and the corporation would
pay for the overnight stay.

I told her that I would look into it, but that I didn't
think it would qualify as a deductible expense. Has anybody
encountered a similar situation?
Yes. Many times I will spend an extra night, or even go a
few days earlier to a tax seminar in another place, in order
to be the tourist, mainly inspecting Civil War battlefields,
railroading activities, and a few "et cetera" activities.

In this case I wouldn't think of deducting an extra night's
hotel bill, much less the food consumed during the extra 24
hours. Not business related. Personal, just as religious
activities.

ChEAr$,
Harlan Lunsford, EA n LA
Mon, 29 Nov 2004 16:08:58
 
M

MTW

Gary said:
The distance
from her home to the office is about 14 miles. Her office
hours in the new office will be on Fridays.
The distance would not appear to be far enough to be
considered "away from home" for business travel deduction
purposes. The lowest qualifying distance I've seen in recent
court cases was 35 miles. And, the reason for the overnight
stay does not appear to be BUSINESS related (rather, it
appears to be a PERSONAL issue).

If this issue is of sufficient importance, why not
restructure the deal so that some day OTHER THAN Friday is
spent at the new office?

MTW
 
P

Phoebe Roberts, EA

Jonathan said:
The only difference between this and any other
hotel room paid for by a company during authorized business
travel is that time and religious observance, rather than
distance, are what is forcing her to stay overnight.
There's no business purpose for religious observance. If a
business owner is required by their religion to tithe (and
the only difference between the tithe and any other business
expense is that religious observance is what requires it),
that doesn't make tithing a business deduction.
This woman is not *choosing* to stay in a hotel room over
the Sabbath.
IMHO, she is. The other alternative available to her is to
move her residence closer to the Friday office, so she can
walk home. Finding a new house is inconvenient, but just
because one choice is more convenient than another doesn't
make it not a choice. She's likely going to have to stop
work early in any case on at least a few midwinter days, so
coming in earlier and leaving earlier might also be a
choice.

And this assumes she'll be able to find a hotel within
walking distance of work, with manual locks (not keycards)
on the doors, that won't require her to pay or present a
credit card either upon checking in or checking out (both of
which are likely to occur on the Sabbath), and which can
provide kosher meals charged to the room.

Phoebe :)
 
J

Jonathan Kamens

Jo Firey said:
Given the short distance from her office to her home, it is
hard to argue that she would could not leave work early
enough to get home.
My commute from my office to my house is less than ten miles
and frequently takes over 40 minutes during rush hour.
Furthermore, if there's an accident or some other similar
problem on my commute route, my commuting time can double or
even triple. To ensure that I am home in time for the
Sabbath on Friday, I usually leave work at least two, and
preferably three, hours before sundown. In short, simple
distance is not the only factor.

If the client's employer requires her to work so late on
Friday that she cannot get home before the Sabbath with a
sufficient margin for error, and the employer has decided
that this is necessary for her to do her job, and the
employer is willing to pay for the hotel room so that she
can do that job without violating her religious beliefs,
then I fail to see why this isn't an ordinary and necessary
business expense.

I do agree that it's important that the requirement for her
to stay that late in the remote location on Friday be one
that is imposed on her by her employer, rather than a choice
she makes herself. In the latter case, the expense clearly
would not be deductible.
Especially since staying in a hotel from sunset Friday to
Sunset Saturday will require other to work during that time
period on her behalf.
It is completely feasible to stay in a hotel throughout the
Sabbath without violating the laws of the Sabbath. I have
done it on numerous occasions. The minutae of how it is
done are not particularly relevant to this discussion.
 
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S

Seth Breidbart

There does not seem to be a valid ~business~ reason for the
hotel stay, so no, it would not be a business deduction.
The business reason is so that she can spend (more of)
Friday afternoon at the office. If she isn't staying at a
local hotel, she has to leave probably 2 hours earlier (to
avoid any risk of being caught in traffic or otherwise
delayed).

If those 2 hours are worth the hotel night to her business,
then everybody is better off if she stays in the hotel.

Seth
 
G

Gary Goodman

(e-mail address removed) says...
Sounds like a personal expense to me, not related to any
business purpose. Why doesn't she just adjust her office
hours, as necessary, to get home before sundown (only 14
miles)?
It may be only 14 miles, but getting from Manhattan to
Brooklyn during the afternoon takes 45 minutes to an hour or
more. She would have to leave the office around 2 pm to make
certain she gets home in time.

Gary
 
G

Gary Goodman

(e-mail address removed) says...
Sandy Koufax (the Hall of Fame Baseball player) was, and
still is, an observant Jew. He made arrangements with
his employer so that he neither pitched nor traveled on
the Sabbath.

As an auditor, I would look very closely at the facts and
circumstances in this situation. I knew someone who 30+
years ago purchased a studio condo on the near north side
of Chicago for exactly the same reason. The condo was
walking distance to a synagogue.
An observant Jew is one who keeps the Sabbath, not one who
goes to sevices twice a year. (I admit I haven't been to a
synagogue in nearly 10 years other than a friend's wedding
in 2000.)

Gary
 
D

Dick Adams

Gary Goodman said:
A friend has an unusual situation. She is Orthodox Jewish,
which means she can't travel on the Sabbath (from sundown on
Friday until sundown on Saturday).

She is opening a new office in another city. The distance
from her home to the office is about 14 miles. Her office
hours in the new office will be on Fridays. Because of the
early sundown on Friday during the winter, she will not be
able get home before sundown.

She has asked me if a hotel room would be a deductible
business expense on the Fridays she is in her new office.
The company structure is an S-Corp and the corporation would
pay for the overnight stay.

I told her that I would look into it, but that I didn't
think it would qualify as a deductible expense. Has anybody
encountered a similar situation?
I am trying very hard to be on her side. My point about
Sandy Koufax is that people make accomodations with their
employer.

This is a S-Corp. If she is an non-owner employee, let the
S-Corp arrange with the hotel, pay the hotel directly, and
give her a letter stating that they are providing this for
their benefit and if disallowed by the IRS, the S-Corp will
will pay all addional taxes, penalties, and interest.

Is she one of the owners of the S-Corp? If yes, no way will
it be deductible.

Are all the owners of the S-Corp Orthodox and observant?
If so, let them hire a goy.

Is the new office in a Jewish neighborhood? If so,
close on Friday and Saturday, but open on Sunday.

Dick
 
G

Gary Goodman

(e-mail address removed) says...
I am trying very hard to be on her side. My point about
Sandy Koufax is that people make accomodations with their
employer.

This is a S-Corp. If she is an non-owner employee, let the
S-Corp arrange with the hotel, pay the hotel directly, and
give her a letter stating that they are providing this for
their benefit and if disallowed by the IRS, the S-Corp will
will pay all addional taxes, penalties, and interest.

Is she one of the owners of the S-Corp? If yes, no way will
it be deductible.

Are all the owners of the S-Corp Orthodox and observant?
If so, let them hire a goy.

Is the new office in a Jewish neighborhood? If so,
close on Friday and Saturday, but open on Sunday.
She is the sole owner of the corporation. She is a speech
pathologist and her new office focuses on children, many of
whom are in school until 2 pm or 3 pm.

Speech pathology is a personal service for which it is
difficult to substitute providers. She is trying to expand an
existing practice which is what keeps her busy on Mondays
through Thursdays.

She can check in before sundown and check out after sundown
on Saturday. There are restaurants that can deliver a kosher
meal (or a meal of fish and/or vegetables) so the only problem
would be to make certain she has a room on a floor low enough
that an elevator is not necessary. (The old Concord Hotel in
the Adirondacks used to have an elevator set to stop at every
floor so observant Jews did not have to press a button.)

Gary
 
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D

Dick Adams

She is the sole owner of the corporation. She is a speech
pathologist and her new office focuses on children, many
of whom are in school until 2 pm or 3 pm.

Speech pathology is a personal service for which it is
difficult to substitute providers. She is trying to expand
an existing practice which is what keeps her busy on
Mondays through Thursdays.
How far from her home is here present office? I suspect it
is not walking distance and that is the reason her Fridays
are open for business. If I am wrong, one solutiom is for
her to start rescheduling some clients to Friday so that
she eventually frees up another day for her new office.
She can check in before sundown and check out after sundown
on Saturday. There are restaurants that can deliver a kosher
meal (or a meal of fish and/or vegetables) so the only
problem would be to make certain she has a room on a floor
low enough that an elevator is not necessary.
She is going to have no more than two after-school
appointments in the dead of winter and will use the bulk
of the revenue to pay for these accomodations. I fail
to find a profit motive here.

I have two more solutions. Have her get a dispensation from
her Rabbi or relocate her residence to the area of her new
office.
(The old Concord Hotel in the Adirondacks used to have an
elevator set to stop at every floor so observant Jews did
not have to press a button.)
What a crock! How is that different from having a goy drive
you home from work?

Dick
 
J

Jonathan Kamens

Dick Adams said:
Is she one of the owners of the S-Corp? If yes, no way will
it be deductible.
Agreed.

Are all the owners of the S-Corp Orthodox and observant?
If so, let them hire a goy.
They would have to able to prove that the job could not
reasonably be performed by a Jew to be able to legally
consider religion as a factor in a hiring decision. Even if
true, I wouldn't want to be trying to argue the case, given
the information that has been presented to us! The barrier
is awfully high. As numerous people have pointed out in
this thread, there are other alternatives, and the threshold
for proving that a business expense is valid is a hell of a
lot lower than the threshold for proving that religious
discrimination was warranted.
Is the new office in a Jewish neighborhood? If so,
close on Friday and Saturday, but open on Sunday.
Whether it is a good business to be open Friday afternoon is
a decision reasonably left in the hands of the business, and
it seems to me that the IRS is unlikely to challenge it (and
if they do, they aren't likely to get far).
 
J

Jonathan Kamens

Phoebe Roberts said:
There's no business purpose for religious observance.
No, but there may be a business purpose for requiring an
observant Jewish employee to be somewhere late enough on a
Friday that they can't make it home without violating their
religion. And there is a *legal requirement* for employers
to make reasonable accommodations for people's religious
observance, even when there is (reasonable) expense
involved. It would be *illegal* for an employer to require
an observant Jewish employee to work so late on a Friday
that s/he is unable to make it home before Shabbat without
making accommodations to the employee's religious
observance. Surely an expense that is incurred to meet
legal requirements is deductible.

If my company has to pay a little extra for Kosher food for
me at a company event, then surely you would not argue that
the added expense for the Kosher food is not deductible as
an expense of doing business even though the expense of the
food they bought for all the other employees is deductible?
If a
business owner is required by their religion to tithe (and
the only difference between the tithe and any other business
expense is that religious observance is what requires it),
that doesn't make tithing a business deduction.
First of all, that's a bad example, because the tithe would
almost certainly be deductible as a charitable donation,
since the vast majority of tithing goes to non-profit
charitable organizations.

Second, it's a bad example because tithing generally applies
to one's personal income, not to the income of the business.
So the business owner would be tithing his take home income
taken out of the business, not tithing the business income,
and we're talking about corporate taxes here, not personal
taxes.

Third, the difference between that case and this one is that
that case involves a business owner making a religious
choice *for himself* to tithe his business's income, whereas
this case involves an employer *imposing a choice* on
someone else to do something as a requirement of their
employment which makes it impossible for them to observe
their religion without additional financial expenditure.
IMHO, she is. The other alternative available to her is to
move her residence closer to the Friday office, so she can
walk home.
If a company hires a CEO who lives out of state, and he
lives near the HQ during the week and goes home on weekends,
and the company buys an apartment for him to stay in during
the week, is the expense of that apartment deductible by the
company as a reasonable and necessary expense for them to be
able to retain the CEO they think they need to get the job
done if he's unwilling to move closer to the HQ?

If the employee we're discussing here is valued by the
employer, if the work she does is valued by the employer, if
the employer truly needs her working into Friday afternoon
during the winter, and if it would cost more for the
employer to lose her than to agree to pay for her hotel room
over the Sabbath, then it is a clear and simple business
choice to pay for that hotel room, and it is a clear and
simple legitimate business expense to do so.
And this assumes she'll be able to find a hotel within
walking distance of work, with manual locks (not keycards)
on the doors, that won't require her to pay or present a
credit card either upon checking in or checking out (both of
which are likely to occur on the Sabbath), and which can
provide kosher meals charged to the room.
Yes, it's assumed that she'll be able to stay in the hotel
without violating the Sabbath. Yes, this is possible, as
I've indicated in a previous posting. And since it's
assumed, it's irrelevant to the discussion. Can we stick to
the point?
 
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M

MTW

Seth said:
The business reason is so that she can spend (more of)
Friday afternoon at the office. If she isn't staying at a
local hotel, she has to leave probably 2 hours earlier (to
avoid any risk of being caught in traffic or otherwise
delayed).
Before even getting to the point of considering whether this
is an "ordinary and necessary" business expense (those being
terms of legal art), I think she would need to be "away from
home" in order for a deduction for lodging to be allowed.
This fact situation simply does not meet any "away from
home" definition that I am aware of.

MTW
 

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