March 27, 1990
IRS Will Not Follow the Option
in Soliman Versus Commissioner
WASHINGTON - The Internal Revenue Service today said it will
not follow the opinion in Soliman v. Commissioner (94 T.C. No. 3,
January 18, 1990). The IRS has filed a motion for reconsideration
of this opinion and, if it is not withdrawn, the IRS said it will
recommend appeal. In the meantime, IRS cautioned taxpayers not to
rely upon this opinion.
In the opinion, the court abandoned the "focal point" test for
determining deductibility of home office expenses and adopted a
facts and circumstances test. The court found that if the
taxpayer's home office is essential to the business, if the taxpayer
spends substantial time there and has no other location available to
perform necessary office functions, then the taxpayer is entitled to
the home office deduction.
In its motion for reconsideration of the case, the IRS argues
that the opinion is contrary to the legislative intent of the law
and creates an unclear standard.
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