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Merchant Sailors should be advised that the Tax Court and the IRS have both determined merchant mariners who receive free meals while aboard their ships without charge should not claim a meal deduction while aboard their ships.

CLICK HERE to download our Merchant Sailor Travel Worksheets to help us correctly compute your incurred expenses.

Merchant Sailor Travel Worksheets     2013 Merchant Sailor Tax Organizer     Office Directory & Mailing Address

ANNOUNCEMENT- The U.S. Patent Office has awarded [7-20-2010] a SECOND U. S. Patent exclusively to our tax office.

Our SECOND U. S. Patent is titled "INCOME TAX PREPARATION SYSTEM FOR TRAVELING TAXPAYERS" [7-20-2010] discloses a system for the preparation of income tax returns for traveling taxpayers that now also includes the use of Global Positioning Systems ("GPS") derived information to properly compute allowable per diem travel deductions.  Any tax preparer using a system that includes all of the limitations of any of the claims of this patent may be infringing the patent and subject the preparer to liability under U.S. Patent Laws.  Likewise, any tax return prepared with such a system may also be an infringement.  If you wish to avoid legal problems of encroaching on our exclusively issued U.S. Patent, please call our tax office to determine if your tax preparer is properly licensed by our accounting office.

Our FIRST issued U. S. Patent was awarded [12-20-05] exclusively to our tax office. Our previously issued United States Patent also discloses a system for the preparation of income tax returns for travel taxpayers.  Any tax preparer using a system that includes all of the limitations of any of the claims of this patent may be infringing the patent and subject the preparer to liability under U.S. Patent Laws.  Likewise, any tax return prepared with such a system may also be an infringement.  If you wish to avoid legal problems of encroaching on our exclusively issued U.S. Patent, please call our tax office to determine if your tax preparer is properly licensed by our accounting office.

Travel Documentation Required to be Attached to Federal Returns

Common Misunderstanding

Better Approach

 

 

Most preparers don’t typically spend the necessary time to properly calculate and then attach the required merchant sailor travel documents.  Please heed this information.  The Tax Code, the IRS, and Tax Court each demand mariners to attach ALL required paperwork to their federal income tax returns. 

Remember - ONLY OUR TAX OFFICE HOLDS NOT JUST ONE U.S. PATENT, but NOW HOLDS TWO U.S. Patents allowing for the computerized computation of travel per diem deductions & the computerized selection of required backup documentation.

We routinely receive calls from taxpayers asking if "Transport 1040" is licensed by our tax office to mimic or to copy some of our office-created descriptions and/or copy some of our support documents.  The answer is no. 

If you ignore attaching the required mariner travel documents to your federal returns, you will only qualify for a $5/day deduction for 2013.  Knowledgeable tax preparers need to be spending the equivalent of 25 and 40 manual hours of professional preparation time just to (1) pull together the needed travel documents, (2) then calculate allowable deductions, (3) and finally assemble and attach these needed travel documentation to mariner tax returns.  Read the Beech Trucking Tax Court decussing the Marin Johnson Tax Court decision that originated with our tax office which stated " . . . See also Johnson v. Commissioner . . . In that event, properly substantiated nonmeal travel expenses might have been decuctible without limitation by section 274(n)". 

If your income tax preparer tells you they somehow "found a way around"  the legal requirement to properly calculate your travel and/or to attach your travel documents to your federal returns - find another preparer or give our office a call.

Merchant Mariners Need to Timely Record All Incurred Travel Expenses

Common Misunderstanding

Better Approach

 

 

Our income tax office still routinely get calls or emails saying merchant mariners do not believe they need to keep timely records of their incurred travel expenses. Wrong.

The Tax Court on 2/3/04 again reminds mariners to timely record your incurred travel expenses - including incurred expenses under the $75/incident rules established by IRS Notice 95-50 and our tax office initiated Marin Johnson Tax Court decision.

Some Tax Preparers Still Don’t Allow Any Incurred Travel Deductions to Mariners

Common Misunderstanding

Better Approach

 

 

Prior to our client's Marin Johnson Tax Court decision, many tax preparers believed the “tax home” for merchant mariners was your ship – thus no travel deductions. Wrong.

Tax Court again confirmed our office stated legal logic in Johnson and Westling that the “tax home” for merchant sailors is typically your residence. Still confused?  Just call us.

Warning - War Zone Exclusions Do Not Apply to Merchant Sailors

Common Misunderstanding

Better Approach

 

 

Some tax preparers have been incorrectly claiming “War Zone Exclusions” for their clients for years.   This includes a well known Enrolled Agent (EA) preparer located in Santa Monica CA and a renamed CPA firm located in Norfolk Virginia. 

Contrary to popular belief, our tax office has never claimed a “War Zone Exclusion.”  The Tax Court on 2/19/04 agreed with our office understanding – No War Zone Exclusions for merchant mariners. 

However, Sailing into War Zone Areas May Give You More Time to File

Common Misunderstanding

Better Approach

 

 

Most U.S. mariners during their sailing careers will move goods for the U.S. Military - just like our tax client, Marin Johnson.  Most affected merchant mariners & their tax preparers do not realize Congress passed new laws that helps mariners.

Congress 11 years ago passed the "Military Family Tax Relief Act of 2003" MFTRA giving military & supporting merchants sailors some new tax advantages.   Click here for a more detailed discussion on how MFTRA can be correctly applied PER THE IRS to help those affected merchant sailors.  

Be Wary of Anyone Trying to Claim a "Foreign Earned Income Exclusion" for Merchant Mariners Living in the United States

Common Misunderstanding

Better Approach

 

 

Unfortunately for many mariners, some tax preparers, including a well known Enrolled Agent (EA) to mariners from Santa Monica CA,  are trying to avoid complying with my client's Johnson decision "paperwork requirements" by incorrectly claiming a "Foreign Earned Income Exclusion" for merchant mariners living in the U.S. believing the time at sea qualifies as "working in a foreign country."  Wrong.

For those merchant sailors living in the U.S., you need to understand your time at sea does not automatically qualify you as "working in a foreign country."  This very illegal misunderstanding could cause a mariner to receive a long federal prison sentence for tax evasion.  The Tax Court again confirmed in 2008 that the sailing into international waters is taxable to the U.S. and cannot be excluded.

However, Tax Court in 2008 Allowed a Mariner Client of Our Office Living Outside the U.S. to Claim a "Foreign Earned Income Exclusion"

Common Misunderstanding

Better Approach

 

 

After Martin Kapp wrote an article in Professional Mariner Magazine in November 2004 warning mariners living in the U.S. not to claim a Foreign Earned Income Exclusion, our tax office began receiving a steady stream of emails and phone calls from mariners living outside the U.S Our tax office in conjunction with attorney Ellin V. Palmer, selected Ed Clark who lives in Scotland with his wife and family and who never sailed into the U.S. as a good case for Tax Court.

With the help of the IRS and the Tax Court, mariners living outside the U.S. can now exclude income earned in foreign territorial waters or foreign ports.  The proper exclusion amount can now be quite tricky and very tedious to correctly compute.  Our TWICE U.S. Patented software has been upgraded to now correctly compute the "Foreign Earned Income Exclusion" percentage.    If this scenario applies to you or someone you know, PLEASE CONTACT OUR OFFICE IMMEDIATELY.

Work in One State and Live in a Different State?

Common Misunderstanding

Better Approach

 

 

Many merchant mariners choose to live in one state while working for an employer who is based in a different state.  Most tax preparers and state taxing agencies incorrectly assume merchant sailors need to file returns for the state of their employer. After all, if your W-2 shows "LA Wages $50,000" shouldn't you be required to file a Louisiana Return?   The answer is usually no - IF you are not a Louisiana Resident.

Federal law prohibits states and cities from taxing non-resident merchant mariners.  If this is happening to you or one of your shipmates, PLEASE CALL OUR OFFICE IMMEDIATELY.

Good News for Some Gulf of Mexico Offshore Oil Workers

Common Misunderstanding

Better Approach

 

 

Did you know the U.S. Supreme Court has already ruled offshore oil platform workers DO QUALIFY as mariners?  Most tax preparers are still incorrectly filing either Louisiana or Alabama state returns for non-resident employees. Wrong.

If you, or if you know someone, who works offshore and is paying state taxes to either Louisiana or Alabama and does not live in that state - HAVE THEM CALL OUR OFFICE IMMEDIATELY.

The  U.S. Supreme Court Clarified Who Qualifies as a "Seamen" Could Help Mariners with Filing of State Tax Returns

Common Misunderstanding

Better Approach

 

 

Sadly, many otherwise eligible taxpayers do not realize our U.S. Supreme Court has already issued several decisions defining who legally qualifies as mariners. Criteria includes: "loyalty to the vessel" -  "helping to promote the purpose of the mission" and/or being "subject to the perils of the sea." 

"Navigating the vessel" plays no part in defining a "mariner."

 

Some less obvious mariners include -

 

Oil Platform & Drilling Barge workers.

 

Research vessel scientists.

 

MSC Mariners.

 

Fishermen.

 

Ship Cooks, Engineers, Waiters, & Deck Hands.

 

Passenger ship employees, and of course, chambermaids.

 

NOT included as mariners - Longshoremen.

 

Click here to read an article by the California Society of CPAs knowledging our firm's specialization in merchant sailor travel deductions.  Just give us a call - we are here to help you.

Click Here to Email Our Office or just call us at (800) 728-1040  - again, we are here to help you.

To send mail or packages to our office. Click Here.

 

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