Is this commuting mileage?

[Burke]

Or isn't tax home at the port? If it is at real primary personal residence, then mileage would
be deductible. IOW, "tax home" is where you earn your bread.
And croissants, bagels, etc.

You are right, and I stand corrected. Meant to say LA, not Texas. (I hate it when I do that.)

[New York Enrolled Agent]

can deduct anything.


So, unless there is a different definition of "tax home" someplace else, --

This is the definition of tax home as used by the Tax Court in Johnson 115 TC 210. (citations omitted)

We disagree with respondent's assertion that petitioner had no tax home. This Court's jurisprudence holds that an individual's tax home is generally the location of his or her principal place of employment.... If an individual does not have a principal place of employment, we generally deem the situs of the individual's permanent residence to be his or her tax home. ... We consider a person who has neither a permanent residence nor a principal place of employment to be an itinerant without a tax home. ...

[JohnH]

After you give him the facts, he may leave a message that says his hairstylist or mechanic has an opinoin which differs from yours, and they think they know a tax preparer who feels the same way, so he's going to talk with them and may get back to you later. Personally I'd probably prefer to hear that message on my machine in a case like this, but to each his own...

[travis bickle]

I don't think this gent

can deduct anything.

Here is a quote from Tax Topic 511
[this is the url for TT 511: http://www.irs.gov/taxtopics/tc511.html] -
/// Begin Quote:
Topic 511 - Business Travel Expenses

Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. Generally, employees deduct these expenses using Form 2106 (PDF) or Form 2106-EZ (PDF) and on Form 1040, Schedule A (PDF). You cannot deduct expenses that are lavish or extravagant or that are for personal purposes.

You are traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away.

Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals, or lodging in Milwaukee because that is your tax home. Your travel on weekends to your family home in Chicago is not for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located.
[emphasis added]
/// END Quote

So, unless there is a different definition of "tax home" someplace else, I think this gent is out of luck -- (1) he certainly does not earn any money in San Antonio where he resides; (2) the company gave him a vehicle to use for commuting [taxable benefit???]; and (3) according to the above, if he has hotel/meal expenses at his port of embarkation, well, those occur in his "tax home" and are therefore not deductible.

His employer does NOT withhold any LA state tax [he is a Texas resident]. And, even if the employer paid for hotel/meals in LA, since those occur at his "tax home", the amount of money would be taxable income since the expenses are not business expenses.

My "only" problem is -- I am out of the office for about a week-and-a-half now; cannot wait to find out what messages he left when I return.

[ChEAr$]

Tax home

Sounds like he wants to have his cake and eat it too. .... i.e, trying to take commuting mileage from San Antonio to regular port of embarkation in another state, and declare state residency in Texas (which has no income tax.) Can't have it both ways. Tax home is Texas. Mileage is non-deductible commuting.

Or isn't tax home at the port? If it is at real primary personal residence, then mileage would
be deductible. IOW, "tax home" is where you earn your bread.
And croissants, bagels, etc.

[Burke]

Sounds like he wants to have his cake and eat it too. .... i.e, trying to take commuting mileage from San Antonio to regular port of embarkation in another state, and declare state residency in Texas (which has no income tax.) Can't have it both ways. Tax home is Texas. Mileage is non-deductible commuting.

[JohnH]

You're much more trusting than I am, especially with new clients who have "interesting" tax situations.

Do you know anything about his past preparer(s), and why he changed? I'm not asking you to post an answer to my question - consider it rhetorical. If this guy comes to me, I'm getting that question answered to my satisfaction before I do any work for him.

I've learned one thing from clients of this type - no matter how cynical I become with them, it's hard to keep up with reality.

[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.

[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]

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?

[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.

[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]

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

[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.

[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.