An IRS audit of a travel nurse’s tax home is not a philosophical argument — it is a paper review. The auditor will ask for documentation of your home base expenses, your return trips, your business activities near home, and your intention to maintain that location as your primary place of business. Nurses who have kept good records walk out with their stipend treatment intact. Nurses who relied on verbal agreements, rough estimates, or their own memory typically do not.
The good news is that the documentation required is not exotic — it is the same paper trail any careful renter or homeowner would accumulate naturally. The challenge is that travel nurses move frequently, maintain two addresses simultaneously, and may not think to keep records that feel routine. This checklist covers everything you need, organized by the three IRS factors for tax home qualification.
Category 1: Housing Expense Records (Factor 2)
The most important documents you can keep are those that prove you paid for housing at your home base while you were on assignment. These records directly satisfy Factor 2 of the IRS test — duplicate living expenses — and are the first thing an auditor will request.
Keep every lease agreement you sign at your home base, including renewals. Keep bank statements or cancelled checks showing rent payments made each month, with the payee and date clearly visible. If you pay rent to a family member, you need a written lease with a specific rent amount and documentation of every payment — Venmo records, bank transfers, or cashier's checks all work. If you own your home, keep your mortgage statements and property tax bills.
Utility bills in your name at your home address are strong corroborating evidence. Even if a roommate or family member pays most of the utilities, having at least one recurring bill — electricity, internet, a cell phone on a family plan with your home address — in your name and mailed to your home address strengthens your position. Keep 12 months of statements for each tax year.
Category 2: Business Activity Records (Factor 1)
Factor 1 requires evidence that you performed work in the area of your tax home. The cleanest documentation is a pay stub or W2 showing wages from a local hospital or per diem agency in your home city. Even a single 12-hour shift per month near home creates a documented business connection to that location.
If you do not work locally, keep other business evidence: a signed agency agreement with a local staffing firm (even if you never accepted an assignment through them), correspondence showing you applied for positions near home, or documentation of maintaining an active nursing license in your home state. License renewal receipts showing your home state address are useful. Professional memberships tied to your home area — a local nursing association chapter, for example — also support this factor.
Category 3: Domicile Records (Factor 3)
Factor 3 — that you have not abandoned your tax home — is supported by your legal ties to your home state. The strongest documents here are a driver's license issued by your home state with your home address, a vehicle registration in your home state, and voter registration at your home address. These are the classic indicators of domicile that both the IRS and state tax authorities recognize.
Bank statements showing your primary checking account address as your home base also help. Return flight records or drive logs showing you traveled home between assignments provide concrete evidence of returning. If you keep a car at your home address while on assignment and your family member can confirm it (or a neighbor or building manager could), that is additional evidence of a maintained home base.
How Long to Keep Records
The IRS generally has three years from the filing date to audit a return (the standard statute of limitations). However, the statute extends to six years if the IRS believes you understated income by more than 25%, and there is no statute of limitations if fraud is alleged. As a practical matter, keep all tax home documentation for at least six years after the return was filed. Digital copies stored in the cloud are perfectly acceptable and easier to retrieve than paper files.
If you are not sure how strong your current documentation is, our Tax Home Quiz evaluates your situation against all three IRS factors and tells you which specific ties you should strengthen before your next assignment starts.
A Practical Documentation System
The simplest system is a single cloud folder labeled with the tax year, with subfolders for each factor. At the end of each month, scan or photograph your rent receipt and any relevant correspondence and drop them into the appropriate folder. At the end of the year, add your W2s, 1099s, and state license renewal. When your accountant asks for documentation, you hand over the folder rather than digging through email and paper files.
Frequently Asked Questions
What if I do not have a lease — can I still claim a tax home?
A written lease is the cleanest evidence, but it is not the only option. Month-to-month rental agreements, documented cash payments to a landlord, or occupancy in a property you own all satisfy Factor 2. What you cannot do is simply claim a room in someone's home rent-free and expect it to count. The IRS needs evidence of an actual economic expense.
Does subletting my home base during a long assignment hurt my tax home claim?
It can, depending on the sublease duration and terms. A short sublet (less than the assignment length) where you retain your right to return is generally acceptable. A sublet that runs the full duration of your assignment with the subletter having full rights to the space is harder to defend — the IRS can argue that you gave up your home base. Maintain at least a storage room or share an arrangement where you can demonstrably return.
My employer provides housing at the assignment. What records do I need?
Employer-provided housing at the assignment location does not replace your need for documentation at your home base. You still need to prove you maintained a home base. In fact, when an employer provides housing, you want especially strong home base records, because the IRS may scrutinize whether the housing truly qualifies as a non-taxable fringe benefit rather than compensation.
Disclaimer: This article provides general educational guidance and is not legal or tax advice. Record-keeping requirements may vary based on individual circumstances. Consult a tax professional familiar with travel healthcare for guidance specific to your situation.