CCA 200750017: Navy enlisted crew share shipboard tax home rule with officers

Plain-English summary

Chief Counsel was asked whether a revenue ruling that places a naval officer's tax home aboard a ship also applies to enlisted personnel. It concluded that rank does not affect the analysis: an enlisted member on permanent duty aboard a ship with regular eating and living facilities has a tax home there too. Such a crew member may deduct properly substantiated, unreimbursed expenses for travel away from that home if section 162(a)(2)'s requirements are met. The advice also notes that a vessel in dry dock is not its crew's tax home for this purpose.

Ruling snapshot

• Question: Does the shipboard tax home rule in Rev. Rul. 67-438 cover Navy enlisted personnel?
• Outcome: Advice given; the rule applies to enlisted crew as well as officers.
• Key authorities: IRC § 162(a)(2); Rev. Rul. 67-438; Griffin v. Commissioner, T.C. Memo 1992-186.

Full text (IRS public release)

Office of Chief Counsel

Memorandum
Internal Revenue Service

Number: 200750017
Release Date: 12/14/2007
CC:ITA:B02: -------------
Third Party Communication: None
POSTS-147330-07
Date of Communication: Not Applicable

UILC: 162.08-00

date: October 29, 2007
to: Deborah C. Stanley
Associate Area Counsel (Richmond)
(Small Business/Self-Employed)

from: Donna M. Crisalli
Senior Technician Reviewer, Branch 2
(Income Tax & Accounting)

subject: Applicability of Rev. Rul. 67-438 to enlisted personnel

This chief counsel advice responds to your request for assistance dated October 26, 2007. This advice may not be used or cited as precedent.

ISSUE

Does Rev. Rul. 67-438, 1967-2 C.B. 82, apply to Navy enlisted personnel as well as officers?

CONCLUSION

Rev. Rul. 67-438 applies to Navy enlisted personnel in the same manner as officers.

LAW AND ANALYSIS

Section 162(a)(2) of the Internal Revenue Code allows a deduction for ordinary and necessary business expenses when traveling away from home.

Rev. Rul. 67-438 holds that, for purposes of § 162(a)(2), the home of a naval officer who is assigned to permanent duty aboard a ship that has regular eating and living facilities, such as an aircraft carrier, battleship, cruiser, destroyer, submarine, or supply ship, is aboard the ship.
POSTS-147330-07
2

We conclude that the taxpayer’s status as an officer is not relevant to the legal analysis or holding of the revenue ruling, and that the ruling applies equally to Navy enlisted personnel who are on permanent duty aboard a ship that has regular eating and living facilities. A naval officer or enlisted member whose home for purposes of § 162(a)(2) is a naval vessel may deduct unreimbursed expenses for travel away from home that are properly substantiated and deductible under § 162(a)(2). We note however, that a naval vessel in dry dock is not the home of its crew (officer or enlisted) for these purposes. Griffin v. Commissioner, T.C. Memo 1992-186.

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