Sunday, October 21, 2012

Boomer Deduction - History and References

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As a former Submarine Master Chief, I had many occasions to talk taxes with sailors.  You would be surprised how many of them believe that the Boomer Deduction is some shady loophole or entirely mythical.  Even more disturbing, you would be surprised how many of them get turned away by tax professionals arguing the same thing.  I'm here to tell you one important thing:

The Boomer Deduction is REAL, LEGAL and GREAT!

This is not to say that there aren't people taking advantage of it and abusing it by stretching the deduction beyond any reasonable bounds, but it also means there are a lot of people not taking proper advantage of a legitimate deduction.  I am going to utilize information from a number of sources, without footnote, but I am linking them all within this post, or at the bottom.  I will also include links to my other posts, which includes a 2011 Boomer Worksheet (I will post a 2012 as soon as I am sure the numbers are final.)

Let's first understand what the Boomer Deduction is.  It's a deduction for expenses while traveling away from your "Tax Home."  IRS Publication 463 delineates many of these deductions, as well as the rules for allowing them.  I cover the actual deductions in other posts, but a quick list is: Meals, Lodging, Auto Mileage and Incidental Expenses.  Here's where the Boomer Deduction kicks in: your tax home, as a two crew FBM submariner, is the submarine, so, when it goes out to sea, your "travel" expenses become deductible!  Now you can read Pub 463 backwards and forwards, and still think this idea is a shady one, but you don't have to guess, the IRS has already decided for you!

Revenue Ruling 67-438*, specifically states "A naval officer who is assigned to permanent duty aboard a ship which has regular eating and living facilities, such as an aircraft carrier, battleship, cruiser, destroyer, submarine, or supply ship, has his "home" for traveling expense purposes aboard the ship to which he is assigned."  Oh no!  That excludes all the Enlisted guys!  This was actually a potential issue, but it was resolved conclusively in 2007, again by the IRS, with an IRS Memorandum that clearly stated that the ruling applied to Enlisted personnel as well.

So deduct away!  Make sure you're following the rules, and don't get greedy, and you'll be okay.

http://supertaxgenius.blogspot.com/2012/03/simplified-boomer-deduction-worksheet.html
http://supertaxgenius.blogspot.com/2012/03/more-boomer-deduction-information.html

*This link has given me trouble in the past, but you can Google it.

3 comments:

  1. ETVC Paul E Richie JrMarch 4, 2017 at 11:57 AM

    Would like your contact information if you are still doing taxes. I just don't trust any of the big corporate box places. They don't understand the FBM deduction. Additionally cant go wrong with a fellow brother helping you out.

    ReplyDelete
    Replies
    1. Taxadvisor@email.com
      Full disclosure, I work for one of the big box companies

      Delete
  2. This is the first I have heard of an FBM deduction. Do you have a phone number I can call you on with questions about it? I just was on teh phone with the IRS and nobody has any idea what it is. I have a letter from my captain stating the dates we owned the boat and when we didn't.

    ReplyDelete