Barrett v. Commissioner

John Barrett (plaintiff) lived in Las Vegas, Nevada, where he owned and managed several rental properties. Barrett’s primary income source, however, came from his video-production business, particularly the work he performed for the American Israel Public Affairs Committee (AIPAC). Since 1995, Barrett produced videos for AIPAC from his home office in Las Vegas. In 2007, AIPAC built a facility in Washington, DC (DC), where it thereafter required Barrett to perform all postproduction work. Barrett continued performing most preproduction services from Las Vegas. Barrett’s trips to DC typically lasted about two weeks and totaled less than six months per year. Initially, he stayed in hotels, but from 2007 to 2013, Barrett rented a condo because he and AIPAC agreed it was more cost-effective. From 2011 to 2014, Barrett reported $393,015 in income from AIPAC and claimed $156,130 in expenses related to his travel to DC. The commissioner of the Internal Revenue Service (defendant) disallowed over half of Barrett’s claimed deductions, arguing that Barrett was not “away from home in pursuit of a trade or business,” under § 162(a)(2), because his tax home was DC, given the long-term and income-dominant nature of his work for AIPAC. Barrett petitioned the United States Tax Court for a redetermination, asserting that his tax home was Las Vegas because that was where he lived, managed rentals, and performed a substantial portion of his video-production work.