Marc G. Bissonnette and Lillian I. Cone - Page 9

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          arrived back in Seattle between 8:30 p.m. and 9:30 p.m.  During             
          the 6- to 7-hour layover the passengers would explore the city of           
          Victoria.                                                                   
               The company provided a four-bedroom condominium in Victoria            
          where the Clipper’s crew rested during the layover.   Because               
          most of the crew were young and noisy, petitioner did not go to             
          the condominium.  Instead, he had lunch, swam for 30 minutes, and           
          returned to the Clipper to sleep or rest for approximately 4                
          hours on a cot he stored on board.  If the sleeping                         
          accommodations on the ferryboat had not been available,                     
          petitioner would have rented a room at a hotel.                             
               Petitioner was neither paid an hourly wage for the layover             
          period in Victoria nor reimbursed for M&IE he incurred during               
          these layovers.  Petitioner did not provide receipts to                     
          substantiate his M&IE.  Instead, he used the allowable Federal              
          M&IE rate for the locality of travel.                                       
          D.   Procedural Background                                                  
               Petitioners timely filed their Federal income tax returns              
          for the years at issue.  Respondent issued the notice of                    
          deficiency in dispute on January 20, 2005.  Petitioners timely              
          filed their petition on March 29, 2005.                                     
               Petitioners’ gross income for the years at issue is not in             
          dispute.  The parties dispute whether petitioners may deduct                
          under section 162(a)(2) traveling expenses listed on their                  






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