A taxpayer is not entitled to deduct any expenses for the use of his home for business purposes unless they are attributable to a portion of the home (or separate structure) used exclusively and
on a regular basis as:

* The taxpayer's principal place of business
* A place of business that is used by patients, clients, or
customers in meeting or dealing with the taxpayer in the normal
course of business.

This has generally been interpreted to require that the customers, patients, or clients actually visit the home office in person to satisfy the "meeting or dealing" test.

The Tax Court recently gave hope to those who use their home office only for telephone contact with customers. However, the Court cautioned that, in most situations, telephone contacts will
not satisfy the statutory requirements of "dealing" in the ordinary course of business.

In the present situation, the Tax Court allowed a deduction to a realty executive who used his home office in the evenings to conduct business via the telephone because:

* His employer required him to take telephone calls from clients
in the evenings (he spent 80% of his regular work day in the
field).

* The calls were regular and continuous, consuming, on an
average, more than two hours, five evenings each week.

* The taxpayer set aside a room as an office which he used as a
place of business exclusively for taking the calls and keeping
files and information needed for handling them.

* The calls were initiated by his customers who could not reach
him during the day.

* Handling the calls at his home was essential to the effective
discharage of his duties as an employee and to his employer's
business.

* The home office was for the convenience of the employer.

While the decision is by no means a far-reaching change in interpretation, executives, professionals and others with responsibilities similar to the real estate executive, who regularly communicate with clients after business hours, should find this decision helpful for claiming a home office deduction.