Johnson v. Comm'r of Internal Revenue, 5114–98.
| Decision Date | 15 September 2000 |
| Docket Number | No. 5114–98.,5114–98. |
| Citation | 115 T.C. 210,115 T.C. No. 16 |
| Parties | Marin I. and Anita J. JOHNSON, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent |
| Court | U.S. Tax Court |
115 T.C. 210
115 T.C. No. 16
Marin I. and Anita J. JOHNSON, Petitioners
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
No. 5114–98.
United States Tax Court.
Sept. 15, 2000.
Taxpayers petitioned for redetermination of deficiencies arising from disallowance of incidental travel expenses at full per diem rates. The Tax Court, Laro, J., held that (1) tax home of merchant seaman was situs of his residence; (2) merchant seaman paid incidental travel expenses while employed away from his tax home; and (3) use of per diem rates was limited to portions that were attributable to incidental expenses.
Decision for taxpayers in part, and for IRS in part.
[115 T.C. 210]
Steven R. Stolar and Kristina S. Keller, for petitioners.
Ric D. Hulshoff, for respondent.
LARO, J.P is a merchant seaman who captains a vessel that sails worldwide carrying equipment of the U.S. military. The vessel sails infrequently in the general vicinity of P's residence, which also is not near the office of P's employer. P's employer furnishes him with lodging and meals without charge while he works on the vessel, but P pays for his other (incidental) travel expenses. P reported his incidental travel expenses as miscellaneous itemized deductions for 1994 and 1996, ascertaining the amounts of those deductions by using the full Federal per diem rates for meal and incidental expense (M & IE rates). The M & IE rates are referenced in Rev. Proc. 96–28, 1996–1 C.B. 686, and its progenitors, which provide that an employee, in lieu of substantiating his or her actual travel expenses, may use the M & IE rates to compute the cost of meal and incidental expenses paid while working away from home. See, e.g., id. sec. 4.03, 1996–1 C.B. at 688. P has no receipts for his incidental travel expenses.
Held: P's tax home is the situs of his residence.
Held, further, P's testimony, by itself, supports a finding that P paid incidental travel expenses while employed away from his tax home.
Held, further, P's use of the M & IE rates is limited to the portions thereof that are attributable to incidental expense.
Respondent determined deficiencies of $945 and $1,022 in petitioners' 1994 and 1996 Federal income taxes, respectively. The deficiencies stem from respondent's disallowance of $3,784 and $3,654 that Marin I. Johnson (petitioner) claimed for the respective years as miscellaneous itemized deductions for travel expenses connected to his employment as a merchant seaman. Petitioner ascertained the amount of those deductions by using the full Federal per diem rates for meal and incidental expense (M & IE rates) referenced in Rev. Proc. 96–28, 1996–1 C.B. 686, and its progenitors. See, e.g., id. sec. 4.03, 1996–1 C.B. at 688. Petitioner's actual expenses consisted solely of incidental expenses; while he was at work, his employer furnished him with lodging and meals at no charge.
[115 T.C. 211]
We must decide whether petitioner may deduct the claimed amounts. We hold he may not. We hold that petitioner's use of the M & IE rates is limited to the incidental expense portions of those rates and that his deductions must be determined accordingly. Unless otherwise indicated, section references are to the Internal Revenue Code, and Rule references are to the Tax Court Rules of Practice and Procedure.
Most facts were stipulated. The parties' stipulations of fact and the exhibits submitted therewith are incorporated herein by this reference. The stipulations of fact are found accordingly. Petitioners resided in Freeland, Washington (Freeland), when we filed their petition. Freeland is a community on Whidbey Island, Washington, located in the Puget Sound approximately 70 miles east of Port Angeles, Washington, and approximately 75 miles north of Tacoma, Washington.1
Petitioners are husband and wife. They and their daughter resided during the subject years in a house (personal residence) that petitioners owned in Freeland. During 1994, petitioner paid $12,640 of mortgage interest and $4,412 of real estate taxes on the personal residence. He paid $11,002 of mortgage interest and $4,799 of real estate taxes on the personal residence during 1996.
Petitioners' primary source of income is petitioner's wages from Crowley American Transport, Inc. (Crowley), the primary office of which is in Jacksonville, Florida, and from the American Maritime Officers Vacation Plan. 2 Crowley employs petitioner as the captain of its vessel the M/V American Falcon ( Falcon ). Crowley primarily charters the Falcon to the U.S. military to transport military vehicles and other military equipment worldwide. Petitioner's work requires that he work continuously on or around the Falcon for long periods of time and that he then vacation for approximately 2 months. Petitioner and his crew generally fly to and from
[115 T.C. 212]
the situs of the Falcon at the beginning and end of their work schedule.
During 1994, petitioner worked from April 22 to July 10 and from September 7 to December 8, for a total of 173 days. During 1996, petitioner worked from January 1 to February 3 and from June 26 to December 13, for a total of 205 days. Petitioner's duties included captaining the sailing of the Falcon from one city to another and performing any assignment required by his employer while the Falcon was docked at port.
Petitioner sailed the Falcon to and from the cities set forth in the schedule below.3 The Falcon was generally at sea between each departure and immediately following arrival date set forth in the schedule, and the Falcon was generally at port on and between each arrival and immediately following departure date.
+---------------------+
¦Date¦Status¦Location ¦
+----+------+---------¦
¦ ¦ ¦ ¦
+---------------------+
1994
Apr. 22 Joined Gulfport, Miss., U.S.A
Apr. 22 Departed Gulfport, Miss., U.S.A
Apr. 26 Arrived Bayonne, N.J., U.S.A
Apr. 27 Departed Bayonne, N.J., U.S.A
May 6 Arrived Rotterdam, The Neth.
May 9 Departed Rotterdam, The Neth.
May 19 Arrived Bayonne, N.J., U.S.A.
May 21 Departed Bayonne, N.J., U.S.A.
May 23 Arrived Jacksonville, Fla., U.S.A.
May 24 Departed Jacksonville, Fla., U.S.A.
June 5 Arrived Hommelvik, Nor.
June 7 Departed Hommelvik, Nor.
June 10 Arrived Rotterdam, The Neth.
June 11 Departed Rotterdam, The Neth.
June 19 Arrived Bayonne, N.J., U.S.A.
June 20 Departed Bayonne, N.J., U.S.A.
June 29 Arrived Rotterdam, The Neth.
June 29 Departed Rotterdam, The Neth.
June 30 Arrived Bremerhaven, F.R.G.
July 1 Departed Bremerhaven, F.R.G.
July 10 Arrived 1
July 10 Left 1
Sept. 7 Joined Beaumont, Tex., U.S.A.
Sept. 7 Departed Beaumont, Tex., U.S.A.
Sept. 9 Arrived Gulfport, Miss., U.S.A.
Sept. 12 Departed Gulfport, Miss., U.S.A.
Sept. 14 Arrived Guantanamo, Cuba
Sept. 17 Departed Guantanamo, Cuba
Sept. 20 Arrived Bayonne, N.J., U.S.A.
Sept. 21 Departed Bayonne, N.J., U.S.A.
Sept. 25 Arrived Port-au-prince, Haiti
Sept. 26 Departed Port-au-prince, Haiti
Oct. 7 Arrived Bremerhaven, F.R.G.
Oct. 9 Departed Bremerhaven, F.R.G.
Oct. 18 Arrived Port Said, Egypt
Oct. 19 Departed Port Said, Egypt
Oct. 27 Arrived Shubai
Oct. 29 Departed Shubai
Oct. 30 Arrived Dammam, Saudi Arabia
Oct. 30 Departed Dammam, Saudi Arabia
Oct. 30 Arrived Bahr.
Nov. 1 Departed Bahr.
Nov. 2 Arrived Dubai, U.A.E.
Nov. 3 Departed Dubai, U.A.E.
Nov. 9 Arrived Port Suez, Egypt
Nov. 10 Departed Port Suez, Egypt
Nov. 14 Arrived Tekirdag, Turk.
Nov. 14 Departed Tekirdag, Turk.
Nov. 19 Arrived Rota, Spain
Nov. 20 Departed Rota, Spain
Dec. 2 Arrived Port-au-prince, Haiti
Dec. 4 Departed Port-au-prince, Haiti
Dec. 8 Arrived Beaumont, Tex., U.S.A.
Dec. 8 Left Beaumont, Tex., U.S.A.
1996
Jan. 1 Joined Dubai, U.A.E.
Jan. 7 Departed Dubai, U.A.E.
Jan. 14 Arrived Port Suez, Egypt
Jan. 15 Departed Port Suez, Egypt
Jan. 16 Arrived Ashdod, Isr.
Jan. 17 Departed Ashdod, Isr.
Jan. 21 Arrived Gibraltar, Gib.
Jan. 23 Departed Gibraltar, Gib.
Feb. 2 Arrived Wilmington, N.C., U.S.A.
Feb. 3 Left Wilmington, N.C., U.S.A.
June 26 Joined Aqaba Port, Jordan
June 28 Departed Aqaba Port, Jordan
June 28 Arrived Port Suez, Egypt
June 29 Departed Port Suez, Egypt
June 30 Arrived Iskendren, Turk.
July 2 Departed Iskendren, Turk.
July 3 Arrived Port Said, Egypt
July 5 Departed Port Said Egypt
July 6 Arrived Aqaba Port, Jordan
July 8 Departed Aqaba Port, Jordan
July 13 Arrived Raysut, Oman
July 14 Departed Raysut, Oman
July 18 Arrived Port Suez, Egypt
July 19 Departed Port Suez, Egypt
July 28 Arrived Bremerhaven, F.R.G.
July 30 Departed Bremerhaven, F.R.G.
Aug. 2 Arrived Muuga, Est.
Aug. 3 Departed Muuga, Est.
Aug. 3 Arrived Riga, Russ.
Aug. 4 Departed Riga, Russ.
Aug. 5 Arrived Klaipeda, Russ.
Aug. 5 Departed Klaipeda, Russ.
Aug. 8 Arrived Antwerp, Belg.
Aug. 9 Departed Antwerp, Belg.
Aug. 17 Arrived Port Said, Egypt
Aug. 18 Departed PortSaid, Egypt
Sept. 5 Arrived Pusan, S. Korea
Sept. 11 Departed Pusan, S. Korea
Sept. 12 Arrived Pohang, S. Korea
Sept. 13 Departed Pohang, S. Korea
Sept. 15 Arrived Naha, Japan
Sept. 16 Departed Naha, Japan
Sept. 18 Arrived Pusan, S. Korea
Sept. 21 Departed Pusan, S. Korea
Sept. 23 Arrived Okinawa, Japan
Sept. 28 Departed Okinawa, Japan
Oct. 12 Arrived Concord, Cal., U.S.A.
Oct. 15 Departed Concord, Cal., U.S.A.
Oct. 16 Arrived Oakland, Cal., U.S.A.
Oct. 19 Departed Oakland, Cal., U.S.A.
Oct. 20 Arrived Port Angeles, Wash., U.S.A.
Oct. 20 Departed Port Angeles, Wash., U.S.A.
Oct. 21 Arrived Tacoma, Wash., U.S.A.
Oct. 23 Departed Tacoma, Wash., U.S.A.
Oct. 26 Arrived Port Hueneme, Cal., U.S.A.
Oct. 27 Departed Port Hueneme, Cal., U.S.A.
Nov. 1 Arrived Pearl Harbor, Haw., U.S.A.
Nov. 2 Departed Pearl Harbor, Haw., U.S.A.
Nov. 11 Arrived Guam
Nov. 15 Departed Guam
Nov. 18 Arrived Naha, Japan
Nov. 19 Departed Naha, Japan
Nov. 21 Arrived Pusan, S. Korea
Nov. 23 Departed Pusan, S. Korea
Nov. 24 Arrived Naha, Japan
Nov. 28 Departed Naha, Japan
Nov. 30 Arrived Yokohama, Japan
Dec. 2 Departed Yokohoma, Japan
Dec. 13 Arrived Port Angeles, Wash., U.S.A.
Dec. 13 Left Port Angeles, Wash., U.S.A.
[115 T.C. 215]
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