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Discussion:PHONE CALLS HOME BY MERCHANT MARINE

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Discussion Forum Index --> Tax Questions --> PHONE CALLS HOME BY MERCHANT MARINE


MRBARRYTAX (talk|edits) said:

18 February 2007
My first merchant marine client insists that he was told that phone calls home are tax deductible. Does not make sense to me. Any possible basis for this position?

Death&Taxes (talk|edits) said:

18 February 2007
Assuming he has a tax home that is not on ship, the expenses that are duplicated by being in travel status are deductible and here it would be the cost of telephoning.

MRBARRYTAX (talk|edits) said:

18 February 2007
it seems reasonable that in that case in certainly would be deductible. Does anyone elsemhave specific deductions for this occupation (merchant marine)whose tax home is NY but travels out of this area?

Death&Taxes (talk|edits) said:

18 February 2007
For that you have to determine nature of travel and employer policies. E.g., I used to know of a Fortune 100 company which would not reimburse lunch while in travel status, nor would they reimburse drinks with meals. Of course a seaman is entirely different, but I would look in the areas of reimbursement for days ashore in other ports.

Taxea (talk|edits) said:

18 February 2007
My first question to him would be the source of his information, the second, can the source produce document that you can review? taxea

Riley2 (talk|edits) said:

18 February 2007
Telephone expenses and other expenses incident to travel away from home are deductible under Reg § 1.162-2(a). See Marc G. Bissonnette, et ux. V. Commissioner, 127 T.C. No. 10. In addition, a merchant marine may deduct an “incidental expense” per diem amount for each day that he is at sea.

Jdd57cpa (talk|edits) said:

10 February 2008
I have a similar situation, my first Merchant Marine client. His previous CPA deducted $75 per day while out to sea. Amounts to a good Sch A, subject to 2% deduction. My client provided me with a brief excerpt from Marin I. and Anita J. Johnson v. Commissioner, 115 TC No. 16. Paraphrased, it says the a merchant marine can deduct up to the full Federal per diem rate for meal and incidentals while out to sea. It sounds like this follows Riley2's response?

Just to get this straight, bottom line, does this mean that 200 days at sea equals a $15,000 (200 days x $75) deduction?

Thanks, John

Solomon (talk|edits) said:

10 February 2008
Are you saying, Jdd, his meals are not provided for him while at sea? Check out the following link:

DOJ. BTW, Kapp paid a big price.

Death&Taxes (talk|edits) said:

10 February 2008
Riley states 'incidental' which is far cry from meals. Go here and you will find the 'incidental' rate is $3 a day.

GSA

Now all is needed is a chorus singing 'get on the horn and report these fraudulent preparers.'

Jdd57cpa (talk|edits) said:

10 February 2008
Holy cow batman! The excerpt is from the preparer mentioned in the DOJ suit.....

see ya new client!!!

Thanks for the heads up!!!!!

Solomon (talk|edits) said:

10 February 2008
Yep, DT, that cpa that deducted $75 per day should go down like Kapp.

Solomon (talk|edits) said:

10 February 2008
Surely is, Jdd, thought you would like that.

TexCPA (talk|edits) said:

10 February 2008
Regarding M Kapp DOJ Judgement

transport1040.com

what a mess

TexCPA

Death&Taxes (talk|edits) said:

13 February 2008
Here is your answer: meals no, incidentals okay......$3 a day.

Balla

Michaelstar (talk|edits) said:

13 February 2008
I have followed this guy for quite some time. I have a client who a few years ago sent me to his web site for this per diem issue as a pilot. At that time the bells and whistles were going off and I refused to follow his line of ..... on behalf of my pilot client.

Thus my reasoning why I questioned the per diem issue in the other post on per diem - airlines industry. I am still not entirely sold on the concept - yet.

While in this DOJ judgement they acknowledge this guy as a CPA, he is also an EA or used to claim to be both on the literature from the web site a few years ago. I have a hard copy of it in my file of the airline pilot. His current web site only claims he is a CPA - maybe he lost or gave up his EA title.

At the end of this DOJ document on page 24 & 25 - it states "thus, absent a court order......" Well he now has a court order preventing him from preparing tax returns claiming the mariner's tax deduction. He has it posted on his web site which is part of the court order. He still claims that the "court order narrowly applies to mariners and other taxpayers who routinely do not incur travel meal costs".

I agree TexCPA - what a mess.


Death&Taxes (talk|edits) said:

13 February 2008
Same case I linked!

Solomon (talk|edits) said:

13 February 2008
Sorry DT, I just noticed that - will delete.

Waynecpa (talk|edits) said:

9 April 2008
This is good.

New client comes to me and my other preparer does the return. He says he wants to take the maritime tax deduction and do we know about it. When my other preparer talks to me, I remember reading this thread so we prepare the return without a per diem deduction.

Client comes in today to check on the status. When I tell him we aren't doing a "maritime deduction", he says there is a guy in California that a lot of people use and he has gone to bat with the IRS and is able to deduct these expenses. As he is trying to recall the name, I search TA for this thread and say, "was his name Kapp". Client says, "YES, that is the guy". After I read the injunction to him, he doesn't really have much else to say.

RoyDaleOne (talk|edits) said:

9 April 2008
Sure, and I ask what is the different between a merchant marine and a service person in the U. S. Navy?

Where is the U. S. Navy personnel tax home?

Bamcpa (talk|edits) said:

20 August 2009
I also have a new client that just came in yesterday and was asking for the maritime tax deduction. This client brought in a detailed schedule of the port calls for 2008 issued by the Department of the Navy, total days is 225. I am new to this and client is insisting maritime deduction for port calls? Any leads or guidance on this issue?

Riley2 (talk|edits) said:

20 August 2009
Your client can claim the higher of actual substantiated expenses or $3 per day while in port. If the expenses are not substantiated, he is limited to $3 per day while in port. See TC Memo 2004-26.

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