Empirical modeling of section 162(a) (2) tax court decisions: Identifying the location of a tax home

One-hundred Tax Court cases concerning Section 162(a) (2) were subjected to several multivariate PROBIT and discriminant analyses to determine which factors best define the location of a “tax home.” In each case, the government disagreed with the taxpayer and contended that the “tax home” was either...

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Bibliographic Details
Published in:Journal of business research 1987-02, Vol.15 (1), p.55-69
Main Authors: Pollard, William B., Copeland, Ronald M.
Format: Article
Language:English
Subjects:
Discriminant analysis
Houses
Internal Revenue Code
Multivariate analysis
Studies
Tax court decisions
Tax deductions
Tax legislation
Travel & entertainment expenses
Variables
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Summary:One-hundred Tax Court cases concerning Section 162(a) (2) were subjected to several multivariate PROBIT and discriminant analyses to determine which factors best define the location of a “tax home.” In each case, the government disagreed with the taxpayer and contended that the “tax home” was either nonexistent or was located in elsewhere. Various sensitivity analyses were performed to test model specifications regarding linear or quadratic functions, discriminant or PROBIT models, and temporal stability. A seven-variable linear discriminant model achieved an 88% Lachenbruch U classification accuracy and exhibited high stability with regard to the three sensitivity analyses. Implications for taxpayers, practitioners, legislators, and researchers are discussed.
ISSN:0148-2963
1873-7978
DOI:10.1016/0148-2963(87)90018-X