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Post by sandiferhands (old) on Apr 21, 2014 11:54:46 GMT -5
Sorry for the cryptic title, but I'm trying to make it search friendly for future use.
Has anyone here who is an ALJ successfully deducted his/her rent and living expenses from being assigned to a duty station in one city while maintaining a permanent home and residence in another city? I have done a little research on it and there seems to be some ambiguity in the regs, depending upon whether the appointment to the duty city is reasonably expected to be "temporary" (ie less than one year) or "indefinite." Just curious as to whether any ALJs have successfully deducted their travel and rent while awaiting transfer back home.
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Post by 71stretch on Apr 21, 2014 12:01:23 GMT -5
I can't see how an initial appointment requiring you to maintain 2 households could be reasonably expected to be anything other than "indefinite". It's not like a special detail of an existing employee, which usually has some sort of beginning and end date to start with. Now, if you then take a voluntary transfer to somewhere closer but still too far away to consolidate into one household, would the IRS look at that differently?
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Post by anotherfed on Apr 21, 2014 15:28:28 GMT -5
Generally, if it is for a new job and that initial posting is in a different city, I don't think you could deduct the second residence because the move would be a condition of employment. I think Innies would have a better case to make. But for Outies, who are taking a new career position, maintaining a "home base" residence would be a choice, not a condition of employment. I suppose if you could show that you were temporarily in the new duty station (like you transferred closer to home in less than 1 year), you could argue that it was temporary. But I wouldn't risk it -- the IRS is too scary!
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Post by moopigsdad on Apr 21, 2014 15:46:46 GMT -5
Generally, if it is for a new job and that initial posting is in a different city, I don't think you could deduct the second residence because the move would be a condition of employment. I think Innies would have a better case to make. But for Outies, who are taking a new career position, maintaining a "home base" residence would be a choice, not a condition of employment. I suppose if you could show that you were temporarily in the new duty station (like you transferred closer to home in less than 1 year), you could argue that it was temporary. But I wouldn't risk it -- the IRS is too scary! I think "innies" would have the same issue, because it is still your choice to choose a new position, too. While, it may be with the same agency or employer, nobody is forcing you to take the new position, but you are voluntarily taking the position of your own accord. I wouldn't risk the IRS coming down on you like a ton of bricks, if you get caught.
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Post by philliesfan on Apr 21, 2014 17:12:43 GMT -5
Actually, if you are an insider and SSA pays for your relocation, you will have to pay taxes to the IRS on that money. I did. However, SSA will also give you extra money to pay those taxes.
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Post by anotherfed on Apr 21, 2014 17:22:52 GMT -5
Actually, if you are an insider and SSA pays for your relocation, you will have to pay taxes to the IRS on that money. I did. However, SSA will also give you extra money to pay those taxes. So, the Agency pays for your relocation and essentially pays the taxes on the relocation income. That seems to imply that the posting is permanent or at least "indeterminate." Wouldn't that preclude the possibility of deducting the cost of maintaining two residences because of the "temporary nature" of the posting?
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Post by philliesfan on Apr 21, 2014 18:44:11 GMT -5
The posting may not be so temporary. In my case, it was five months. However, there are members of my class who put there names on the transfer list on the 91st and are still at there original office, 2 1/2 years later. In order to come home, there has to be a vacancy in an office or offices in the city that you want to come back to. Frankly, I was surprised that I got home so quickly, but an ALJ retired unexpectedly right after I put my name on the list and I was the only one on the list for that office and two others in the same metro area. As far is ODAR is concerned, the posting is not temporary, even though in reality it may not be.
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Post by sandiferhands (old) on Apr 22, 2014 10:47:15 GMT -5
Yes, unfortunately it appears that it is the "reasonable expectation" that the assignment is temporary that determines whether you can deduct the expenses, and it would take quite an argument to convince a tax court that you reasonably anticipated the assignment to an ALJ position with ODAR to have you away from home for less than a year. The interesting scenario is if you actually DO get transferred within a year, are your arguments strengthened by being able to show that in fact the assignment was for less than a year? Might be worth deducting, getting your documentation together, and then waiting to see what the IRS does. (This is not legal advice.)
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Post by anotherfed on Apr 22, 2014 12:14:26 GMT -5
Yes, unfortunately it appears that it is the "reasonable expectation" that the assignment is temporary that determines whether you can deduct the expenses, and it would take quite an argument to convince a tax court that you reasonably anticipated the assignment to an ALJ position with ODAR to have you away from home for less than a year. The interesting scenario is if you actually DO get transferred within a year, are your arguments strengthened by being able to show that in fact the assignment was for less than a year? Might be worth deducting, getting your documentation together, and then waiting to see what the IRS does. (This is not legal advice.) Yeah ... let us know how that works out. No way I'm messing with the IRS!
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Post by gary on Apr 22, 2014 12:18:22 GMT -5
Yes, unfortunately it appears that it is the "reasonable expectation" that the assignment is temporary that determines whether you can deduct the expenses, and it would take quite an argument to convince a tax court that you reasonably anticipated the assignment to an ALJ position with ODAR to have you away from home for less than a year. The interesting scenario is if you actually DO get transferred within a year, are your arguments strengthened by being able to show that in fact the assignment was for less than a year? Might be worth deducting, getting your documentation together, and then waiting to see what the IRS does. (This is not legal advice.) Could, however, be illegal advice.
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Post by moopigsdad on Apr 22, 2014 12:34:31 GMT -5
Of course gary, in sandifer's defense he did state it was not legal advice. However, I agree with anotherfed on this point. I am not that hard up financially that I have to try to write-off questionable office expenses (which may not fly with the IRS). It's not worth the risk in my opinion, nor the time one might have to spend trying to defend the write-off or possibly paying wrongfully claimed deductions, penalties and interest.
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Post by gary on Apr 22, 2014 12:40:55 GMT -5
I did not mean to suggest that sandifer making the statement was acting illegally. Just that it might be illegal to do what he said. I have great respect for sandifer from all I have seen on this Board. Personally, I've always felt life is too short to mess with the IRS.
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Post by funkyodar on Apr 22, 2014 13:11:22 GMT -5
I once represented a small time local celebrity type that got sucked up into a federal wire fraud, tax evasion, money laundering scheme.
As part of the plea negotiations, we agreed to undergo interrogations and full disclosure with FBI, ICE and IRS.
neither ICE nor FBI was what one would expect from tv. That time and every other time I dealt with them, the room was a large conference room. The agents were cordial, generally.
The irs on the other hand...small, sparsely furnished room that smelled distinctly of sweat. The agent was extremely forceful and ensured we knew my clients assets were his to chew.
Decided right then I wasn't ever gonna try and get one over on the irs.
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Post by sealaw90 on Apr 22, 2014 13:37:02 GMT -5
Sandi, Although I cannot speak for the SSA, there is a massive document called the Joint Federal Travel Regulations. According to my memory, this applies to all DOD agencies and some DHS agencies, and I think the civilian chapters may apply to almost every agency. When a civilian (new to the government or being transfered to a new position/agency) gets hired to a location that is not within a reasonable commuting distance (i.e., greater than 50 miles) of their home of record, they get issued a set of orders that are considered a "Permanent Change of Station." You do not get a "Temporary Duty" set of orders. However, when you go off to Falls Church for training, you will get a set of 'temporary duty" orders. Although I am not afraid to mess with the IRS, I wouldn't even attempt this sort of charade because the IRS knows the federal travel regulations better than we do. If the SSA tells you to report to east crapland, and you live 750 miles away, you will be permanently moving to east crapland. Whether you transfer out of there is up to you. Even if you leave e.crapland in 180 days, you are considered to have made a permanent move there in the first place. as they say in Brooklyn . . .fuggattaboutit.
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Post by sandiferhands (old) on Apr 22, 2014 15:39:49 GMT -5
Guys, gals, thanks for your outpouring of concern--but I'm the last person to mess with the IRS. I think the responses to the thread made it pretty clear no one had ever successfully tried this, and I have no desire to plow new ground with them.
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Post by gary on Apr 22, 2014 15:55:19 GMT -5
Sandi, Although I cannot speak for the SSA, there is a massive document called the Joint Federal Travel Regulations. According to my memory, this applies to all DOD agencies and some DHS agencies, and I think the civilian chapters may apply to almost every agency. When a civilian (new to the government or being transfered to a new position/agency) gets hired to a location that is not within a reasonable commuting distance (i.e., greater than 50 miles) of their home of record, they get issued a set of orders that are considered a "Permanent Change of Station." You do not get a "Temporary Duty" set of orders. However, when you go off to Falls Church for training, you will get a set of 'temporary duty" orders. Although I am not afraid to mess with the IRS, I wouldn't even attempt this sort of charade because the IRS knows the federal travel regulations better than we do. If the SSA tells you to report to east crapland, and you live 750 miles away, you will be permanently moving to east crapland. Whether you transfer out of there is up to you. Even if you leave e.crapland in 180 days, you are considered to have made a permanent move there in the first place. as they say in Brooklyn . . .fuggattaboutit. I was imprecise before. I too am not afraid to mess with the IRS. But I am terrified of doing anything that will make the IRS mess with me.
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Post by hopefalj on Apr 22, 2014 16:23:46 GMT -5
Yes, unfortunately it appears that it is the "reasonable expectation" that the assignment is temporary that determines whether you can deduct the expenses, and it would take quite an argument to convince a tax court that you reasonably anticipated the assignment to an ALJ position with ODAR to have you away from home for less than a year. The interesting scenario is if you actually DO get transferred within a year, are your arguments strengthened by being able to show that in fact the assignment was for less than a year? Might be worth deducting, getting your documentation together, and then waiting to see what the IRS does. (This is not legal advice.) Yeah ... let us know how that works out. No way I'm messing with the IRS! I thought we could just give them a "my bad" and the secret federal employee handshake, and all would be forgiven. Is that wrong?
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Post by anotherfed on Apr 22, 2014 20:13:54 GMT -5
Yeah ... let us know how that works out. No way I'm messing with the IRS! I thought we could just give them a "my bad" and the secret federal employee handshake, and all would be forgiven. Is that wrong? Nope, if the number of federal employees not paying taxes is any indication.
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