Tax Research Cases Spring 2015 ACC 430 LECs 15897 20524 
TAX RESEARCH CASES
ACC 430 Spring 2015
Instructor: Donald Frost
Case No. 1:
Eileen recently retired from AquaTrek, an operator of passenger cruise ships. As a qualified retiree, Eileen is permitted to book passage on AquaTrek vessels for a nominal service charge, provided the ship is not fully booked with paying customers and there is space available. Eileen has already taken two cruises, one to the Bahamas and one to Jamaica, using her retiree benefits. Compared to what AquaTrek paying customers are customarily charged for comparable trips, Eileen has already saved over $3,500. Retirees are provided the best cabins available and may avail themselves of any and all of the ship’s recreation facilities. As the cruises are “full meal and beverage” (i.e., passengers may eat and drink as much and as often as they desire for no additional charge), AquaTrek does place some limits on the food service available to retirees. Retirees traveling on a service charge pass are limited to two meals per day in the buffet restaurants only and are not permitted to receive complimentary alcoholic beverages. Retirees wishing to partake of unlimited food and beverage privileges must purchase a supplemental meal ticket before the start of the cruise
(the price varies depending upon the length of the cruise and whether alcohol is included).
As a cruise line, AquaTrek’s business tends to be seasonal, with periods of very high activity with large numbers of passengers passing through its port facilities. To help manage the flow of passengers during these peak periods, AquaTrek maintains a program where retirees like Eileen “volunteer” to assist with certain tasks at the port terminals. As former active
AquaTrek employees, the volunteers are familiar with most aspects of the cruise business and perform such tasks as directing passengers to the proper loading piers, assisting passengers with checking luggage and answering general questions about the ships.
AquaTrek provides these retiree
ACC 430 Spring 2015
Instructor: Donald Frost
Case No. 1:
Eileen recently retired from AquaTrek, an operator of passenger cruise ships. As a qualified retiree, Eileen is permitted to book passage on AquaTrek vessels for a nominal service charge, provided the ship is not fully booked with paying customers and there is space available. Eileen has already taken two cruises, one to the Bahamas and one to Jamaica, using her retiree benefits. Compared to what AquaTrek paying customers are customarily charged for comparable trips, Eileen has already saved over $3,500. Retirees are provided the best cabins available and may avail themselves of any and all of the ship’s recreation facilities. As the cruises are “full meal and beverage” (i.e., passengers may eat and drink as much and as often as they desire for no additional charge), AquaTrek does place some limits on the food service available to retirees. Retirees traveling on a service charge pass are limited to two meals per day in the buffet restaurants only and are not permitted to receive complimentary alcoholic beverages. Retirees wishing to partake of unlimited food and beverage privileges must purchase a supplemental meal ticket before the start of the cruise
(the price varies depending upon the length of the cruise and whether alcohol is included).
As a cruise line, AquaTrek’s business tends to be seasonal, with periods of very high activity with large numbers of passengers passing through its port facilities. To help manage the flow of passengers during these peak periods, AquaTrek maintains a program where retirees like Eileen “volunteer” to assist with certain tasks at the port terminals. As former active
AquaTrek employees, the volunteers are familiar with most aspects of the cruise business and perform such tasks as directing passengers to the proper loading piers, assisting passengers with checking luggage and answering general questions about the ships.
AquaTrek provides these retiree