Missouri Mariner's Tax Home Found to be Port of New York

Originally Published on forbes.com on September 29th,2011

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The ideal place to have your business home is probably your principal residence.  This is because commuting expenses are not deductible and meals and lodging are deductible when you are away from your business home.  If you can make your principal residence your business home many of the non-deductible expenses of ordinary mortals will be deductible to you.  The nuances of this issue are illustrated in the case of Edward Glover, a recent Tax Court Summary opinion.  Mr. Glover lived with his wife Jeri in Jackson, Missouri.  She was employed by the Southeast Missouri Hospital Association in Cape Girardeau, which does not appear to be a particularly onerous commute, although for all I know US 61 in that area might be really brutal.  Mr. Glover’s commute seems a little more challenging:

Petitioner was employed by Reinauer Transportation Cos., L.L.C. (Reinauer), which is headquartered in Staten Island, New York, and maintains an office in East Boston, Massachusetts. Petitioner was employed by Reinauer as a merchant mariner aboard certain tugboats and barges in 2004 and 2005. Reinauer is in the business of transporting petroleum and chemical products by tug and barge along the eastern seaboard of North America. Petitioner generally travels to the New York City area to pick up tugboat and barge combinations that are used to loadand deliver petroleum or chemical products, or both. Petitioner’s pay begins when his vessel leaves the local dock. The collective bargainingagreement (CBA) between Reinauer and the union to which petitioner belonged for the years at issue states that Reinauer will use its employees to perform work in the area of “The Port of New York and vicinity” and “Any regular coastwise run having as one of its terminal points a point in or north of Norfolk, Virginia.”

In 2004 petitioner worked on the east coast of the United States from Maine through Virginia, and in 2005 he worked on the east coast from New Hampshire through Florida. Petitioner took 11 voyages in 2004 of which 9 originated in or around New York City. He disembarked from those trips five times in the New York City area. In 2005 petitioner voyaged 12 times, embarking from the New York City area 9 times and disembarking there 9 times.

This made for some expenses not all of which would be reimbursed under his contract:

Petitioner paid various expenses to travel between his residence and the terminals from which he boarded and disembarked from the tugboats and barges on which he worked. Petitioner paid: (a) Vehicle expenses of $1,999 for 2005; (b) miscellaneous parking fees, tolls, and transportation expenses of $4,499 in 2004 and $1,482 in 2005; and (c) travel expenses while away from home overnight of $2,786 for 2004 2 and $3,702 for 2005.

Mr. Glover argued that since he was in the “transportation industry”, he was entitled to treat his residence as his tax home.  He cited Johnson v Com.  Johnson was a ships captain who lived in Freeland, Washington and was employed by a company based in Jacksonville, FL.  He would fly to whatever port in the world his ship happened to be docked in to meet it.  The Court found that he had no business home other than his personal residence.

In the case of Mr. Glover, though, the Tax Court found for the IRS.  Mr. Glover’s tax home was New York City:

Petitioner’s employment situation is factually different from those of the taxpayers in Johnson and Westling. The primary office of petitioner’s employer was in Staten Island, a borough of New York City. Almost all of petitioner’s embarkations were from the New York City area, and most of his disembarkations were there, too. In addition, the CBA provided for reimbursement of employee travel expenses if petitioner had to go from one vessel to another, was given time off, or had to travel between his vessel and its home port or, if less expensive, another city