itonewbie
Level 15

What I see happen a lot is telecommuting arrangements being set up by accommodating department heads and HR managers, who think of these simply as nice employee retention initiatives and talent strategies, without consultation with tax and legal professionals within and outside the company to first understand the ramifications of these arrangements at both the corporate and individual levels as well as how some of these risks may be mitigated.  This occurs even at the largest MNCs.

For one, these telecommuters could establish nexus and PE, either domestically or internationally, which could create unnecessary corporate tax exposures.  There may also be fiduciary duties for income and tax reporting and withholding at those jurisdictions along with various other employer obligations.

Telecommuting is actually not an issue that is only popping up now in this modern age of internet.  Take a walk down the memory lane and we'll find landmark cases that defined judicial interpretations of "tax home" where some level of telecommuting was involved.  The one that fascinates me most is Comm. v. Flowers!

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Still an AllStar