I was recently reading Robert Greene’s; The 48 Laws of Power and took a few tips from it but more often than not I break them. Today’s infraction is listed under Law 24 “Never Be the Bearer of Bad News”
The Ruling
U.S. District Court Ruling; United States V Martin A Kapp:
Judgment is entered against Defendant Martin Kapp The United States may recover its costs Defendant and his agent… are enjoined from preparing tax returns…(2 page list) Within 21 days of this Order Defendant shall provide a list of all persons or entities for whom he prepared returns (any portion of a return, amended returns, or refund claims)… This list is to cover materials that were prepared at any time from January 1, 2000 to present… Defendant must state name, contact information, social security number or employer id number and tax period for which the returns … relate.
This is a difficult pill to swallow and a source of much debate within the maritime community. I have yet to sign aboard a ship, attend a training class or participate in any gathering of U.S. mariners where this topic was not discussed… or debated.
While my wife and I personally used Kapp’s services only once, our first full year after the academy, we missed the January 1st judgment date by a matter of months. We thus have a vested interest in this decision so expect full coverage including answers, interviews and insight here on gCaptain in the coming months.
The Good News
We are not tax experts but it seems that the Judge upheld all parts of the “Mariner’s Deduction” except for meal expenses taken while aboard ship, so penalties should be somewhat limited. Apparently the DOJ had the same question that sparks the most debate among mariners; “How can you deduct the food you eat that the company pays for?”
The Reason
According to the complaint, Kapp has taught college-level tax and accounting classes…
The IRS recently listed return-prepared fraud as part of its 2006 list of the “Dirty Dozen” tax scams which is posted HERE . Since 2001, the Justice Department has sought and obtained injunctions against more than 160 tax-return preparers and tax-fraud promoters. ref
Here is the basic info:
- Kapp’s website with injunction notice
- To view the judgement and permanent injunction, click HERE.
- To view minutes from the August 20th, 2007 judgement, click HERE.
- To view the Department of Justice Notice, click HERE.
- To view the full complaint, click HERE.
- Competitor, Transport 1040, Kappsized FAQ page
- MM&P Newsletter Post
Have you been Kappsized? Enter a comment below or contact us [details in sidebar | contact form] with the questions you’d like answered. All future Kappsized articles will be filed HERE so check back often.
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22 responses so far ↓
1 Jim // Sep 15, 2007 at 7:09 am
Oh SHIT!!!
2 Fran // Sep 15, 2007 at 7:18 am
no sympathy, you guys are idiots for trusting him
3 MS // Sep 15, 2007 at 7:49 am
Fran
* go take a long walk off a short peer*
4 jr // Sep 15, 2007 at 8:09 am
my bar bill is not deductible, damn! i’m sure the Mckays will protect him in the big house
5 joe // Sep 15, 2007 at 8:36 am
quick. someone say something funny before i cry
6 Jim // Sep 15, 2007 at 8:39 am
joe, if misery likes company you should be laughing your xxx off right now if not here’s a good joke 4U;
http://mycrapmail.blogspot.com/2007/04/irs-audit-joke.html
7 Future gCaptain says “My Daddy’s gettting audited” | Tear | gCaptain.com // Sep 15, 2007 at 9:00 am
[…] RSS ← Mariner Tax Deduction “Kapp-sized” By IRS […]
8 Pownce : Daniel B. // Sep 15, 2007 at 9:52 pm
[…] parseUrl(”http://gcaptain.com/maritime/blog/mariners-kappsized-by-the-irs/#comment-2080″, false); gcaptain.com/maritime/blog/marine… […]
9 Fred Fry International: Maritime Monday 76 // Sep 17, 2007 at 6:23 am
[…] who were a little creative with their work-related meal ‘expense’ deductions with his post “Mariner Tax Deduction “Kapp-sized” By IRS”. (For those who don’t know, the ship provides your meals at sea, at no additional cost to you.) […]
10 JB // Sep 17, 2007 at 9:31 am
Well there goes my week,,, and it’s only monday!
11 Mariner Tax Deduction Kappsized By The IRS - gCaptain.com // Sep 22, 2007 at 2:26 pm
[…] September 15th, 2007 · 10 Comments […]
12 Mariner Tax Expert James McGuire | gCaptain.com // Sep 24, 2007 at 10:09 pm
[…] have been hard at work finding information for those who have been “Kappsized” by the IRS’ decision against certain aspects of mariner tax deductions promoted by […]
13 American’s Marine Highway | gCaptain.com // Nov 24, 2007 at 8:38 am
[…] I am pleased to report a significant amount of positive feedback from mariners when discussing new MARAD (Maritime Administration) initiatives. In addition to being on the forefront of new LNG programs they are aggressively pursuing new ways of providing job opportunities for U.S. Mariners and, the *word on the street* is they are even working with the IRS to protect our interests with regards to the Sailor Tax Deduction Debacle. […]
14 seatime37 // Jan 7, 2008 at 11:42 pm
deducting meal expenses? whats wrong with that? For those of you who sail part time or work shoreside on ships you dont know what I am talking about. The only good cooks that are left ride on matson all the rest are siu flunkies who think they can cook. I go ashore & get groceries every port. Some cooks nowadays cant even make a pancake.
15 seatime37 // Jan 7, 2008 at 11:45 pm
at least ashore you have a health dept that regulates restaurants. Galleys on american flag ships are non regulated & non inspected even when visiting U.S. ports. Ever caught a cook using the same pots & pans every day without washing them? I have.
16 Colleen Emery // Jan 11, 2008 at 1:34 pm
Feel free to contact us, we can assist you in setting up a payment plan with the IRS if you are a recipient of amended returns ~ at no cost. See our website at http://www.transport1040.com for more information.
17 steve // Feb 21, 2008 at 7:41 pm
so what can a mariner deduct in the way of per diem incidental expenses. Is it $3 a day only, and no meals. If I am out of the country, can I take a higher per diem amount?
18 John // Feb 21, 2008 at 7:59 pm
Hi Steve. I’m not sure but give James Maguire a call and he’ll fill you in:
http://www.maguiretaxes.com/
19 Colleen Emery // Feb 23, 2008 at 2:03 pm
Steve,
Please recognize foreign localities can be as high as $36/day for incidental deductions. Please see our website at http://www.transport1040.com or contact me at 1-866-777-TWTS (8987) for further clarification.
20 Steve // Feb 25, 2008 at 11:28 am
Can’t find anything definitive on your site. Here’s my question. If I’m at sea all day and in port for the evening (oil services) then I assume I use the port for my incidentals?
21 John // Feb 25, 2008 at 5:38 pm
Hi Steve, thanks for commenting.
I’m confused by the very same question. Normally James Maguire would be happy to post a detailed explanation but, as you can imagine, he’s rather busy this month. I have added a few “related posts” below this post… hopefully they can help you out. If not feel free to give James a call directly.
22 steve // Feb 27, 2008 at 7:28 am
Hi John- Thanks. I don’t see the related posts.
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