Is this commuting mileage?

[travis bickle]

Good day,

I am working on the return for a client who is a sea captain.

He will periodically go from his home in San Antonio, to a port off the Louisiana coast and board his ship [or, be helicoptered out to it] and then do his job. His ship travels between various ports-of-call but for each trip, the destinations are different depending on the cargo being hauled, picked up, etc.

His round-trip mileage between his residence in San Antonio and the point of embarkation is 1,000 miles [have no idea why he does not move]. Is this commuting mileage?

The following quote is from this IRS website url and is the closest thing I can figure out for him: http://www.irs.gov/instructions/i2106/ch02.html

The travel is to a temporary work location outside the metropolitan area where you live and normally work..

Since his sea routes differ with each voyage, one might be able to say that it is a "temporary work location", the location is definitely outside the metropolitan area where he lives, but what about "where you normally work"?

Does the fact that he earns his money offshore mean:
(a) it is outside the metropolitan area of his point of embarkation; and
(b) therefore he can claim the travel mileage from his residence to the port?

Please help. I need some insight and, as always, references are welcome.

Thanks in advance,

P.S. -- just curious now, since a maritime captain earns his money at sea, precisely where is his tax home?

[les grans]

Travis:
About thirty years ago, my then-boss asked me basically this same question, and told me to "research" it. He was hoping to find a favorable answer, but none was found. It wasn't found that year, or the next year, or the next year, or the next year....
It comes down to "The tax laws ain't gonna subsidize your choice to live in the Bahamas and work in Cleveland." [Sorry, Clevelanders, that just slipped out...]
I think you saw the handwriting on the wall when you said you don't understand why Captain Travelin'man chooses to live so far from his job ["...no idea why he does not move."]
Lester

[AuditorTurnedGood]

,

P.S. -- just curious now, since a maritime captain earns his money at sea, precisely where is his tax home?

My guess is since he doesn't really have a regular place of work, the IRS might treat a large general area as his tax home. (I used to do this when I was auditing for MN and had an individual who was "on the road" for work a lot overnight") Perhaps the next question would be: where does he file his state income tax? LA, CA, apportion the two? I know MN states you have to have residency someplace.

[ChEAr$]

travel to the port

is personal in nature, commuting.

And since the port is in Loosana, that is his tax home and I imagine that state wants
an income tax return.

[JohnH]

Looks like the captain has a boatload of issues, but none of them are going to help him with his tax liability.

[solomon]

His round-trip mileage between his residence in San Antonio and the point of embarkation is 1,000 miles [have no idea why he does not move]. Is this commuting mileage?




P.S. -- just curious now, since a maritime captain earns his money at sea, precisely where is his tax home?

It might be worth reading a couple of cases of mariners. Marin Johnson 115 TC No. 16 and Balla TC Memo 2008-18. The location of their personal residences remained their tax homes.

[travis bickle]

Absolutely

It might be worth reading a couple of cases of mariners. Marin Johnson 115 TC No. 16 and Balla TC Memo 2008-18. The location of their personal residences remained their tax homes.

spot on, Solomon!

Thanks to you I did read Balla [which had Marin Johnson appended].

Here is a quote from page 7 of Balla [emphasis in the original]:

/////////// Begin Quote
As a MERCHANT SAILOR, taxpayer was required by his employer to
travel to various locations to meet his ships. Per IRS Rev Rul
99-7 and attached Marin Johnson Tax Court Decision, his auto
mileage and possibly other travel-related costs are FULLY
DEDUCTIBLE as follows:
//////////////////End Quote

I appreciate you taking the time to point me to the references. I confess that I was sure that it was all commuting mileage, but the client kept telling me "it's not commuting; it's me going back and forth to work" [LOL].

Now since the new standards say "more than likely", I will not hesitate, in this case, to put those expenses down. And, that also means no LA state tax.

Thanks again.

[erchess]

Travis

According to your quote, the sailor in Balla traveled to various locations to meet his ships while your sailor always travels to the same port in LA. I would not expect that the fact that he sometimes gets on s ship there and sometimes is choppered out to a ship in the Gulf to make any difference.

[travis bickle]

I understand

According to your quote, the sailor in Balla traveled to various locations to meet his ships while your sailor always travels to the same port in LA. I would not expect that the fact that he sometimes gets on s ship there and sometimes is choppered out to a ship in the Gulf to make any difference.

that there is a difference.

However, the situation is essentially the same --
mariner living in X has to travel to Y to get to work; Balla [and Marin Johnson] both say that this is allowable.

What possible difference could it make that my client travels to only one port as opposed to a higher number? [I know, there is no requirement for logic/consistency with the service].

The "textbook example" often given is -- carpenter goes from home to union hall, then to job at point A; next day, he goes from home to union hall to job at point B, etc. His mileage [per the textbook] is not allowed there because he is in the same greater metro region and he has no regular/permanent job site.

Balla and Marin Johnson allow the mariners to do so because their job [the nature of the job] requires travel from residence to place of employment. There is no written statement in either Balla or Marin Johnson that specifies "this is only true IF the taxpayer has to go to different ports".

Again, you and I may read this differently -- and it is very possible YOU are correct (!) -- but, I believe that this client "more than likely" can use Balla/Marin Johnson and I will prepare the return as such.

However, I WILL fully advise the client before any signatures are done.

[Zee]

First, a Merchant Seaman is much different than a Captain, and my guess is a Merchant Seaman sails from many different ports. I think that the requirement to travel to various locations makes it much more difficult to maintain a tax home. In addition, the cite specifically mentions various locations. If it didn't, I'd go for it. JMHO

[David1980]

Be careful!

You need to be sure you understand what you are reading.

From the Balla decision,

/////////// Begin Quote
As a MERCHANT SAILOR, taxpayer was required by his employer to
travel to various locations to meet his ships. Per IRS Rev Rul
99-7 and attached Marin Johnson Tax Court Decision, his auto
mileage and possibly other travel-related costs are FULLY
DEDUCTIBLE as follows:
//////////////////End Quote

is not the findings of the court but rather an excerpt of the schedule attached to the 2002 return. It does not matter what was attached to the return, I can attach a statement to my tax return declaring myself tax exempt but a court document that reproduces my statement in the case summary is not saying I am tax exempt.

Immediately after the reproduced statement you will see:

Petitioners concede that they are not entitled to deductions
for any of the mileage or rental car expense deductions claimed
for 2002 except the $205 claimed for the round trip mileage from
petitioner’s home in Sarasota to Fort Lauderdale, Florida, where
petitioner attended the firefighting school in April 2002.

The mileage was not allowed.

[Zee]

David-

Good catch. I didn't read the case.

Travis-

You're not alone. This tax stuff is hard to digest. Often, I don't read the writings enough and find myself missing something. That's what is great about this BBS, sharper eyes and the ability to talk to others when you're all by yourself in a practice.

[travis bickle]

The other shoe drops

[Big Sigh]I knew it was too good to be true.[/Big Sigh]

Now I just found out that the vehicle he uses to go from San Antonio to his port [and return] is not his -- it is a company-owned vehicle provided to him specifically for that purpose.

Can someone explain how this is NOT a taxable fringe benefit?

[JohnH]

Do you have a client who is dribbling info to you in small snippets just to see if he can get some tax benefit and then try and hold you responsible if he gets tagged in an audit? You've posted enough info to make me highly supicious of this client's motivations - he may know a lot more aboiut the tax system than you are giving him credit for, and you may be learning why he isn't returning to his previous preparer.

Maybe they fired him for this type of shenanigans, or maybe he learned enough from them to selectively provide info to you. I suggest that you step back from the details and look at the big picture - you need to know the circumstances under which he came to you, if you don't have that info already. If this has been his filing situation for several years, most of the questions you raise have already been specifically asked & answered, so maybe now he's just shopping for a different result (and a scapegoat if it blows up later)

(My apologies if I've unfairly impugned the captain's honesty)

[travis bickle]

Well, thanks for the suggestion,

but I do not believe this gent is "trying to pull a fast one".

After all, he has been his own worst enemy [remember, he is the one who told me that "it's not commuting, it's just me going back and forth to work"].

My "problem" is compounded by the fact that it takes him forever to provide information. For example, when he is at sea, he cannot reply to my e-mails or my phone calls. I find that hard to believe in this day and age, but that is what he maintains.

So, he tells me one thing ["commuting mileage situation"] then a week or so goes by and I find out something else ["company-owned vehicle"], and again, he is the one who tells me this stuff, so he is definitely not helping himself.

According to him, his employers just this year started up a plan whereby the employees are partially reimbursed for various expenses, so I strongly doubt that any vehicle fringe benefit was included in box 1 of the W2

After this 4th of July celebration -- by the way, everyone, have a good 4th! -- I will e-mail him a "shopping list" of questions and wait for him to reply to them ALL before I work on the return.