§893 — Compensation of employees of foreign governments or international organizations
17 cases·5 followed·6 distinguished·1 questioned·5 cited—29% support
Statute Text — 26 U.S.C. §893
Wages, fees, or salary of any employee of a foreign government or of an international organization (including a consular or other officer, or a nondiplomatic representative), received as compensation for official services to such government or international organization shall not be included in gross income and shall be exempt from taxation under this subtitle if—
such employee is not a citizen of the United States, or is a citizen of the Republic of the Philippines (whether or not a citizen of the United States); and
in the case of an employee of a foreign government, the services are of a character similar to those performed by employees of the Government of the United States in foreign countries; and
in the case of an employee of a foreign government, the foreign government grants an equivalent exemption to employees of the Government of the United States performing similar services in such foreign country.
The Secretary of State shall certify to the Secretary of the Treasury the names of the foreign countries which grant an equivalent exemption to the employees of the Government of the United States performing services in such foreign countries, and the character of the services performed by employees of the Government of the United States in foreign countries.
Subsection (a) shall not apply to—
any employee of a controlled commercial entity (as defined in section 892(a)(2)(B)), or
any employee of a foreign government whose services are primarily in connection with a commercial activity (whether within or outside the United States) of the foreign government.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.893-1 Compensation of employees of foreign governments or international organizations
- Treas. Reg. §Treas. Reg. §1.893-1(a) Employees of foreign governments—(1) Exempt from tax.
- Treas. Reg. §Treas. Reg. §1.893-1(b) Should the Secretary of State determine that the continued presence in the United States of any person entitled to the benefits of this title is not desirable, he shall so inform the * * * international organization concerned * * *, and after such person shall have had a reasonable length of time, to be determined by the Secretary of State, to depart from the United States, he shall cease to be entitled to such benefits.
- Treas. Reg. §Treas. Reg. §1.893-1(c) Tax conventions, consular conventions, and international agreements—(1) Exemption dependent upon internal revenue laws.
17 Citing Cases
893 excludes from gross income and exempts from taxation income received by an employee ofa foreign government or international organization ifcertain conditions are met. The I.R.C. sec. 893 exemption can be waived, and it must be waived by a person who wishes to become a permanent resident ofthe United States. The exemption does not apply to income received by a permanentresident after filing the waiver.
That certification is not presented in subsection (a) as one of the conditions for the exemption; and, section 893 .does not explicitly provide that the wages shall be 17 - exempt only "if" the Secretary certifies reciprocity ( unlike the social security tax provisions , discussed next) . C . Employment tax statutes The income tax provision in section 893 may be contrasted with the corresponding employment tax provisions .
In any case, we need not decide whether section 7491(a) applies to 5Ifan employee ofa foreign government executes and files with the Attorney General the waiver under sec.
190 (2010).) The IRS investigated several issues, including the exclusio ofembassy wages pursuant to section 893(a).
We hold that it was.
Abrahamsen’s wages from the Mission were exempt from taxation pursuant to section 893 and provisions of international law.
o section 6213(a), asking this Court to redetermine those deficiencies. After various concessions, the only issue for decision is whether Mr. Abdel-Fattah’s wages paid by the Embassy of the United Arab Emirates (uae) are exempt from income tax under section 893. That issue is currently before the Court on the parties’ cross-motions for summary judgment. For the reasons explained below, we will grant Mr. Abdel-Fattah’s motion and deny respondent’s motion. Background The following facts are based
Section 893 Petitioner contends that the $1,238,100 that he received from NYSL in 1996 is exempt from tax under section 893(a)4 because he was an employee of a foreign government. We disagree. Salaries and wages received by an employee as compensation for official services to a foreign government or international organization are exempt from tax. S
- 4 - [*4] Section 893 Ifcertain conditions are met, section 893(a) excludes from gross income and exempts from taxation compensation ofcertain employees offoreign governments and international organizations.
gain only "to the extent attributable to United States real property interests". The heading thus "correspond[s] to the text" and "confirm[s] our reading ofthe text of the statute." Abdel-Fattah v. Commissioner, 134 T.C. 190, 205 (2010) (construing sec. 893). This statute presumes the existence ofa general rule to which this aggregation approach is an exception. Section 897(g) does not provide (and the Commissioner does not contend that it provides) a general rule that all gain from a foreign p
893.135(b)2 (West 1985). Petitioner negotiated a plea agreement whereby he agreed to plead nolo contendere in exchange for a lighter sentence. In order to secure a recommendation for this lighter sentence, petitioner rendered "substantial assistance" which, among other things, required petitioner to participate in an undercover sting operation