ND Oil Boom Workers?

[ddoshan]

Anyone having to deal with the tremendous influx of workers heading to ND to work in the oil fields? Individuals that have homes and families in other states or areas and now have a lot of expense in heading out there to work. Various costs associated with being away from their home and family.

If you have had any as clients, how are you dealing with their expenses. Allowing none.. as their tax home most likely has changed as their work would not meet the temporary test. Or are you allowing expenses based on some other factors such as although they are now regularly working out in western ND they are not necessarily working at one particular location or whatever.

Guess I am just fishing to see if others have dealt with the folks that have headed out there for the jobs but have not abandoned their family residence. It would appear that their tax home has changed and that they would have very little as far as travel expenses to deduct.

Having trouble myself as although they may be making good money, they do have a great deal of expense to make it due to high costs of travel, lodging or whatever.

[Gretel]

I would agree with the assessment that these jobs are permanent in nature and that the whole area of the Bakken fields is the new tax home.

In addition to the travel expenses from their home to ND, these people also face high costs due to a very miserable housing situation. Some have to commute a long distance every day. I don't think any of these travel expenses will be deductible.

What might ease your mind is AMT. I have one client who works in the oil fields since long years, always very different locations. He now also works in that area and makes quite a bit more. Only high expenses he has on Sch A are his travel expenses and for 2011 he was just shy of $4 away from the AMT. ...and no, he does not have outrages 2106 expenses, I have to go with the lowest depreciation period for the travel trailer he bought in 2011. There comes a point where you can't win anyway.

[ddoshan]

Gretel sounds like your client would be in the same situation that I agonize over. Even though he has been in the business for years and now is up working the ND fields wouldn't his tax home have changed unless he could establish that this was just a temporary job assignment. My guess is that he and others, if they can hack it, will be working there for several years.
I am having trouble with the situation and a couple of clients I have had because they do have a lot of excess expenses due to the situation. But it appears to be a situation that as far as I can see or tell there is no way around looking at it as if their tax home has changed and it's just too bad or tough that it is costing them a good amount of money to work there. But the fariness of it all bothers me and I try, in my mind somehow, to justify allowing various expenses. But the rules don't appear to go that way.

Bottom line is that I had a client the other day where I did talk myself into justifying a lot of travel expenses but it has bothered me because I don't think it was right.

[thomtax]

Not ND, but had same basic situation. The worker had lived in the job area for several years, and had no plans to leave, but his wife remained here locally. Naturally, when I took the approach of the tax home being in job area and cannot deduct all expenses, they knew someone who was preparing other workers returns and taking large deducts. The left me and went to the other preparer, even though I had just bailed them out of a bad situation a couple of years before that.

LT

[Gretel]

Gretel sounds like your client would be in the same situation that I agonize over. Even though he has been in the business for years and now is up working the ND fields wouldn't his tax home have changed unless he could establish that this was just a temporary job assignment. My guess is that he and others, if they can hack it, will be working there for several years.
I am having trouble with the situation and a couple of clients I have had because they do have a lot of excess expenses due to the situation. But it appears to be a situation that as far as I can see or tell there is no way around looking at it as if their tax home has changed and it's just too bad or tough that it is costing them a good amount of money to work there. But the fariness of it all bothers me and I try, in my mind somehow, to justify allowing various expenses. But the rules don't appear to go that way.

Bottom line is that I had a client the other day where I did talk myself into justifying a lot of travel expenses but it has bothered me because I don't think it was right.

I understand the agony. Been there, done that and am glad that these people left after some years. It took me years to get my mind wrapped around travel expenses in these situation and I am still getting confused.

My clients is not permanently working there. His company is hired for specific jobs that only can be done in certain weather, so he still can claim travel expenses since the Bakken oil field is not the only job site he is going to.

[JohnH]

With some client, it's all about "what have you done for me lately?"