@JSel45 wrote:
My job was previously remote, however it's in my best interest to move closer to my client (over 50 miles away), however I've only lived in my primary residence for 20 months.
If I move there and claim it's a work related move, and am audited, what would be required from me?
If my current manager does explicitly email me asking me to move to this new location to support this client, is that sufficient evidence for the IRS?
If I move and sell my house at 22 months, and it is considered sufficient reason to move, will I be prorated for 2 months or would I be completely exempt from capital gains?
If you read publication 523, you will see that the safe harbor requires a change in employment location, or other unforeseen change in your circumstances. The key point is there must be a sudden change in your circumstances that necessitates a move. If there is no sudden change that compels the move, then you either pay the tax or wait the full 731 days.
If audited, you bear the burden of proof that the change meets the safe harbor or was otherwise unexpected and unpredictable. The IRS gives some examples. For instance, if you have a 2 bedroom house and discover you are pregnant with twins, that might be an unforeseeable event that requires a move to a larger house. But if you move into a 2 bedroom house already having twins, and find it is so impractical that you need to move, that is not an unforeseen hardship--it was foreseeable that a two bedroom house would be unworkable for a larger family, so it is not an unexpected change in circumstances.
From your description, it does not sound like this is an unforeseeable or unpredictable change in circumstances, but I don't know all the facts. If the client previously encouraged remote working and is now insisting that you be closer, that might be something that represents an unpredictable change in circumstances from when you bought the house. On the other hand, if you provide tech support that occasionally requires a hands on site visit, and you are just now realizing the drive is too long, that's not really an unpredictable change in your employment circumstances (it's the realization that you made a mistake).
