§911 — Citizens or residents of the United States living abroad
255 citing cases
Statute Text — 26 U.S.C. §911
At the election of a qualified individual (made separately with respect to paragraphs (1) and (2)), there shall be excluded from the gross income of such individual, and exempt from taxation under this subtitle, for any taxable year—
the foreign earned income of such individual, and
the housing cost amount of such individual.
For purposes of this section—
The term “foreign earned income” with respect to any individual means the amount received by such individual from sources within a foreign country or countries which constitute earned income attributable to services performed by such individual during the period described in subparagraph (A) or (B) of subsection (d)(1), whichever is applicable.
The foreign earned income for an individual shall not include amounts—
received as a pension or annuity,
paid by the United States or an agency thereof to an employee of the United States or an agency thereof,
included in gross income by reason of section 402(b) (relating to taxability of beneficiary of nonexempt trust) or section 403(c) (relating to taxability of beneficiary under a nonqualified annuity), or
received after the close of the taxable year following the taxable year in which the services to which the amounts are attributable are performed.
The foreign earned income of an individual which may be excluded under subsection (a)(1) for any taxable year shall not exceed the amount of foreign earned income computed on a daily basis at an annual rate equal to the exclusion amount for the calendar year in which such taxable year begins.
For purposes of applying subparagraph (A), amounts received shall be considered received in the taxable year in which the services to which the amounts are attributable are performed.
In applying subparagraph (A) with respect to amounts received from services performed by a husband or wife which are community income under community property laws applicable to such income, the aggregate amount which may be excludable from the gross income of such husband and wife under subsection (a)(1) for any taxable year shall equal the amount which would be so excludable if such amounts did not constitute community income.
The exclusion amount for any calendar year is $80,000.
In the case of any taxable year beginning in a calendar year after 2005, the $80,000 amount in clause (i) shall be increased by an amount equal to the product of—
such dollar amount, and
the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “2004” for “2016” in subparagraph (A)(ii) thereof.
If any increase determined under the preceding sentence is not a multiple of $100, such increase shall be rounded to the next lowest multiple of $100.
For purposes of this section—
The term “housing cost amount” means an amount equal to the excess of—
the housing expenses of an individual for the taxable year to the extent such expenses do not exceed the amount determined under paragraph (2), over
an amount equal to the product of—
16 percent of the amount (computed on a daily basis) in effect under subsection (b)(2)(D) for the calendar year in which such taxable year begins, multiplied by
the number of days of such taxable year within the applicable period described in subparagraph (A) or (B) of subsection (d)(1).
The amount determined under this paragraph is an amount equal to the product of—
30 percent (adjusted as may be provided under subparagraph (B)) of the amount (computed on a daily basis) in effect under subsection (b)(2)(D) for the calendar year in which the taxable year of the individual begins, multiplied by
the number of days of such taxable year within the applicable period described in subparagraph (A) or (B) of subsection (d)(1).
The Secretary may issue regulations or other guidance providing for the adjustment of the percentage under subparagraph (A)(i) on the basis of geographic differences in housing costs relative to housing costs in the United States.
The term “housing expenses” means the reasonable expenses paid or incurred during the taxable year by or on behalf of an individual for housing for the individual (and, if they reside with him, for his spouse and dependents) in a foreign country. The term—
includes expenses attributable to the housing (such as utilities and insurance), but
does not include interest and taxes of the kind deductible under section 163 or 164 or any amount allowable as a deduction under section 216(a).
Housing expenses shall not be treated as reasonable to the extent such expenses are lavish or extravagant under the circumstances.
Except as provided in clause (ii), only housing expenses incurred with respect to that abode which bears the closest relationship to the tax home of the individual shall be taken into account under paragraph (1).
If an individual maintains a separate abode outside the United States for his spouse and dependents and they do not reside with him because of living conditions which are dangerous, unhealthful, or otherwise adverse, then—
the words “if they reside with him” in subparagraph (A) shall be disregarded, and
the housing expenses incurred with respect to such abode shall be taken into account under paragraph (1).
To the extent the housing cost amount of any individual for any taxable year is not attributable to employer provided amounts, such amount shall be treated as a deduction allowable in computing adjusted gross income to the extent of the limitation of subparagraph (B).
For purposes of subparagraph (A), the limitation of this subparagraph is the excess of—
the foreign earned income of the individual for the taxable year, over
the amount of such income excluded from gross income under subsection (a) for the taxable year.
The amount not allowable as a deduction for any taxable year under subparagraph (A) by reason of the limitation of subparagraph (B) shall be treated as a deduction allowable in computing adjusted gross income for the succeeding taxable year (and only for the succeeding taxable year) to the extent of the limitation of clause (ii) for such succeeding taxable year.
For purposes of clause (i), the limitation of this clause for any taxable year is the excess of—
the limitation of subparagraph (B) for such taxable year, over
amounts treated as a deduction under subparagraph (A) for such taxable year.
For purposes of this paragraph, the term “employer provided amounts” means any amount paid or incurred on behalf of the individual by the individual’s employer which is foreign earned income included in the individual’s gross income for the taxable year (without regard to this section).
For purposes of this paragraph, an individual’s foreign earned income for any taxable year shall be determined without regard to the limitation of subparagraph (A) of subsection (b)(2).
For purposes of this section—
The term “qualified individual” means an individual whose tax home is in a foreign country and who is—
a citizen of the United States and establishes to the satisfaction of the Secretary that he has been a bona fide resident of a foreign country or countries for an uninterrupted period which includes an entire taxable year, or
a citizen or resident of the United States and who, during any period of 12 consecutive months, is present in a foreign country or countries during at least 330 full days in such period.
The term “earned income” means wages, salaries, or professional fees, and other amounts received as compensation for personal services actually rendered, but does not include that part of the compensation derived by the taxpayer for personal services rendered by him to a corporation which represents a distribution of earnings or profits rather than a reasonable allowance as compensation for the personal services actually rendered.
In the case of a taxpayer engaged in a trade or business in which both personal services and capital are material income-producing factors, under regulations prescribed by the Secretary, a reasonable allowance as compensation for the personal services rendered by the taxpayer, not in excess of 30 percent of his share of the net profits of such trade or business, shall be considered as earned income.
The term “tax home” means, with respect to any individual, such individual’s home for purposes of section 162(a)(2) (relating to traveling expenses while away from home). An individual shall not be treated as having a tax home in a foreign country for any period for which his abode is within the United States, unless such individual is serving in an area designated by the President of the United States by Executive order as a combat zone for purposes of section 112 in support of the Armed Forces of the United States.
Notwithstanding paragraph (1), an individual who—
is a bona fide resident of, or is present in, a foreign country for any period,
leaves such foreign country after
August 31, 1978
—
during any period during which the Secretary determines, after consultation with the Secretary of State or his delegate, that individuals were required to leave such foreign country because of war, civil unrest, or similar adverse conditions in such foreign country which precluded the normal conduct of business by such individuals, and
before meeting the requirements of such paragraph (1), and
establishes to the satisfaction of the Secretary that such individual could reasonably have been expected to have met such requirements but for the conditions referred to in clause (i) of subparagraph (B),
shall be treated as a qualified individual with respect to the period described in subparagraph (A) during which he was a bona fide resident of, or was present in, the foreign country, and in applying subsections (b)(2)(A), (c)(1)(B)(ii), and (c)(2)(A)(ii) with respect to such individual, only the days within such period shall be taken into account.
If—
an individual who has earned income from sources within a foreign country submits a statement to the authorities of that country that he is not a resident of that country, and
such individual is held not subject as a resident of that country to the income tax of that country by its authorities with respect to such earnings,
then such individual shall not be considered a bona fide resident of that country for purposes of paragraph (1)(A).
No deduction or exclusion from gross income under this subtitle or credit against the tax imposed by this chapter (including any credit or deduction for the amount of taxes paid or accrued to a foreign country or possession of the United States) shall be allowed to the extent such deduction, exclusion, or credit is properly allocable to or chargeable against amounts excluded from gross income under subsection (a).
The sum of the amount excluded under subsection (a) and the amount deducted under subsection (c)(4)(A) for the taxable year shall not exceed the individual’s foreign earned income for such year.
If travel (or any transaction in connection with such travel) with respect to any foreign country is subject to the regulations described in subparagraph (B) during any period—
the term “foreign earned income” shall not include any income from sources within such country attributable to services performed during such period,
the term “housing expenses” shall not include any expenses allocable to such period for housing in such country or for housing of the spouse or dependents of the taxpayer in another country while the taxpayer is present in such country, and
an individual shall not be treated as a bona fide resident of, or as present in, a foreign country for any day during which such individual was present in such country during such period.
For purposes of this paragraph, regulations are described in this subparagraph if such regulations—
have been adopted pursuant to the Trading With the Enemy Act (
50 U.S.C. 4301
et seq.) or the International Emergency Economic Powers Act (
50 U.S.C. 1701
et seq.), and
include provisions generally prohibiting citizens and residents of the United States from engaging in transactions related to travel to, from, or within a foreign country.
Subparagraph (A) shall not apply to any individual during any period in which such individual’s activities are not in violation of the regulations described in subparagraph (B).
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations providing rules—
for cases where a husband and wife each have earned income from sources outside the United States, and
for married individuals filing separate returns.
An election under subsection (a) shall apply to the taxable year for which made and to all subsequent taxable years unless revoked under paragraph (2).
A taxpayer may revoke an election made under paragraph (1) for any taxable year after the taxable year for which such election was made. Except with the consent of the Secretary, any taxpayer who makes such a revocation for any taxable year may not make another election under this section for any subsequent taxable year before the 6th taxable year after the taxable year for which such revocation was made.
If, for any taxable year, any amount is excluded from gross income of a taxpayer under subsection (a), then, notwithstanding sections 1 and 55—
if such taxpayer has taxable income for such taxable year, the tax imposed by section 1 for such taxable year shall be equal to the excess (if any) of—
the tax which would be imposed by section 1 for such taxable year if the taxpayer’s taxable income were increased by the amount excluded under subsection (a) for such taxable year, over
the tax which would be imposed by section 1 for such taxable year if the taxpayer’s taxable income were equal to the amount excluded under subsection (a) for such taxable year, and
if such taxpayer has a taxable excess (as defined in section 55(b)(1)(B)) for such taxable year, the amount determined under the first sentence of section 55(b)(1)(A) for such taxable year shall be equal to the excess (if any) of—
the amount which would be determined under such sentence for such taxable year (subject to the limitation of section 55(b)(3)) if the taxpayer’s taxable excess (as so defined) were increased by the amount excluded under subsection (a) for such taxable year, over
the amount which would be determined under such sentence for such taxable year if the taxpayer’s taxable excess (as so defined) were equal to the amount excluded under subsection (a) for such taxable year.
For purposes of this paragraph, the amount excluded under subsection (a) shall be reduced by the aggregate amount of any deductions or exclusions disallowed under subsection (d)(6) with respect to such excluded amount.
In applying section 1(h) for purposes of determining the tax under paragraph (1)(A)(i) for any taxable year in which, without regard to this subsection, the taxpayer’s net capital gain exceeds taxable income (hereafter in this subparagraph referred to as the capital gain excess)—
the taxpayer’s net capital gain (determined without regard to section 1(h)(11)) shall be reduced (but not below zero) by such capital gain excess,
the taxpayer’s qualified dividend income shall be reduced by so much of such capital gain excess as exceeds the taxpayer’s net capital gain (determined without regard to section 1(h)(11) and the reduction under clause (i)), and
adjusted net capital gain, unrecaptured section 1250 gain, and 28-percent rate gain shall each be determined after increasing the amount described in section 1(h)(4)(B) by such capital gain excess.
In applying section 55(b)(3) for purposes of determining the tax under paragraph (1)(B)(i) for any taxable year in which, without regard to this subsection, the taxpayer’s net capital gain exceeds the taxable excess (as defined in section 55(b)(1)(B))—
the rules of subparagraph (A) shall apply, except that such subparagraph shall be applied by substituting “the taxable excess (as defined in section 55(b)(1)(B))” for “taxable income”, and
the reference in section 55(b)(3)(B) to the excess described in section 1(h)(1)(B), and the reference in section 55(b)(3)(C)(ii) to the excess described in section 1(h)(1)(C)(ii), shall each be treated as a reference to each such excess as determined under the rules of subparagraph (A) for purposes of determining the tax under paragraph (1)(A)(i).
Terms used in this paragraph which are also used in section 1(h) shall have the respective meanings given such terms by section 1(h), except that in applying subparagraph (B) the adjustments under part VI of subchapter A shall be taken into account.
For administrative and penal provisions relating to the exclusions provided for in this section, see sections 6001, 6011, 6012(c), and the other provisions of subtitle F.
Treasury Regulations
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Treas. Reg. §1.911-1Partial exclusion for earned income from sources within a foreign country and foreign housing costs
(a) In general. Section 911 provides that a qualified individual may elect to exclude the individual's foreign earned income and the housing cost amount from the individual's gross income for the taxable year. Foreign earned income is excludable to the extent of the applicable limitation for the taxable year. The housing cost amount for the taxable year is excludable to the extent attributable to employer provided amounts. If a portion of the housing cost amount for the taxable year is attributable to non-employer provided amounts, such amount may be deductible by the qualified individual subject to a limitation. The amounts excluded under section 911(a) and the amount deducted under section 911(c)(3)(A) for the taxable year shall not exceed the individual's foreign earned income for such taxable year. Foreign earned income must be earned during a period for which the individual qualifies to make an election under section 911(d)(1). A housing cost amount that would be deductible except for the application of this limitation may be carried over to the next taxable year and is deductible to the extent of the limitation for that year. Except as otherwise provided, §§ 1.911-1 through 1.911-7 apply to taxable years beginning after December 31, 1981. These sections do not apply to any item of income, expense, deduction, or credit arising before January 1, 1982, even if such item is attributable to services performed after December 31, 1981.
(b) Scope. Section 1.911-2 provides rules for determining whether an individual qualifies to make an election under section 911. Section 1.911-3 provides rules for determining the amount of foreign earned income that is excludable under section 911(a)(1). Section 1.911-4 provides rules for determining the housing cost amount and the portions excludable under section 911(a)(2) or deductible under section 911(c)(3). Section 1.911-5 provides special rules applicable to married couples. Section 1.911-6 provides for the disallowance of deductions, exclusions, and credits attributable to amounts excluded under section 911. Section 1.911-7 provides procedural rules for making or revoking an election under section 911. Section 1.911-8 provides a reference to rules applicable to taxable years beginning before January 1, 1982.
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Treas. Reg. §1.911-1(a)In general.
In general. Section 911 provides that a qualified individual may elect to exclude the individual's foreign earned income and the housing cost amount from the individual's gross income for the taxable year. Foreign earned income is excludable to the extent of the applicable limitation for the taxable year. The housing cost amount for the taxable year is excludable to the extent attributable to employer provided amounts. If a portion of the housing cost amount for the taxable year is attributable to non-employer provided amounts, such amount may be deductible by the qualified individual subject to a limitation. The amounts excluded under section 911(a) and the amount deducted under section 911(c)(3)(A) for the taxable year shall not exceed the individual's foreign earned income for such taxable year. Foreign earned income must be earned during a period for which the individual qualifies to make an election under section 911(d)(1). A housing cost amount that would be deductible except for the application of this limitation may be carried over to the next taxable year and is deductible to the extent of the limitation for that year. Except as otherwise provided, §§ 1.911-1 through 1.911-7 apply to taxable years beginning after December 31, 1981. These sections do not apply to any item of income, expense, deduction, or credit arising before January 1, 1982, even if such item is attributable to services performed after December 31, 1981.
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Treas. Reg. §1.911-1(b)Scope.
Scope. Section 1.911-2 provides rules for determining whether an individual qualifies to make an election under section 911. Section 1.911-3 provides rules for determining the amount of foreign earned income that is excludable under section 911(a)(1). Section 1.911-4 provides rules for determining the housing cost amount and the portions excludable under section 911(a)(2) or deductible under section 911(c)(3). Section 1.911-5 provides special rules applicable to married couples. Section 1.911-6 provides for the disallowance of deductions, exclusions, and credits attributable to amounts excluded under section 911. Section 1.911-7 provides procedural rules for making or revoking an election under section 911. Section 1.911-8 provides a reference to rules applicable to taxable years beginning before January 1, 1982.
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Treas. Reg. §1.911-2Qualified individuals
(a) In general. An individual is a qualified individual if:
(1) The individual's tax home is in a foreign country or countries throughout—
(i) The period of bona fide residence described in paragraph (a)(2)(i) of this section, or
(ii) The 330 full days of presence described in paragraph (a)(2)(ii) of this section, and
(2) The individual is either—
(i) A citizen of the United States who establishes to the satisfaction of the Commissioner or his delegate that the individual has been a bona fide resident of a foreign country or countries for an uninterrupted period which includes an entire taxable year, or
(ii) A citizen or resident of the United States who has been physically present in a foreign country or countries for at least 330 full days during any period of twelve consecutive months.
(b) Tax home. For purposes of paragraph (a)(i) of this section, the term “tax home” has the same meaning which it has for purposes of section 162(a)(2) (relating to travel expenses away from home). Thus, under section 911, an individual's tax home is considered to be located at his regular or principal (if more than one regular) place of business or, if the individual has no regular or principal place of business because of the nature of the business, then at his regular place of abode in a real and substantial sense. An individual shall not, however, be considered to have a tax home in a foreign country for any period for which the individual's abode is in the United States. Temporary presence of the individual in the United States does not necessarily mean that the individual's abode is in the United States during that time. Maintenance of a dwelling in the United States by an individual, whether or not that dwelling is used by the individual's spouse and dependents, does not necessarily mean that the individual's abode is in the United States.
(c) Determination of bona fide residence. For purposes of paragraph (a)(2)(i) of this section, whether an individual is a bona fide resident of a foreign country shall be determined by applying, to the extent practical, the principles of section 871 and the regulations thereunder, relating to the determination of the residence of aliens. Bona fide residence in a foreign country or countries for an uninterrupted period may be established, even if temporary visits are made during the period to the United States or elsewhere on vacation or business. An individual with earned income from sources within a foreign country is not a bona fide resident of that country if:
(1) The individual claims to be a nonresident of that foreign country in a statement submitted to the authorities of that country, and
(2) The earned income of the individual is not subject, by reason of nonresidency in the foreign country, to the income tax of that country.
If an individual has submitted a statement of nonresidence to the authorities of a foreign country the accuracy of which has not been resolved as of any date when a determination of the individual's bona fide residence is being made, then the individual will not be considered a bona fide resident of the foreign country as of that date.
(d) Determination of physical presence. For purposes of paragraph (a)(2)(ii) of this section, the following rules apply.
(1) Twelve-month test. A period of twelve consecutive months may begin with any day but must end on the day before the corresponding day in the twelfth succeeding month. The twelve-month period may begin before or after arrival in a foreign country and may end before or after departure.
(2) 330-day test. The 330 full days need not be consecutive but may be interrupted by periods during which the individual is not present in a foreign country. In computing the minimum 330 full days of presence in a foreign country or countries, all separate periods of such presence during the period of twelve consecutive months are aggregated. A full day is a continuous period of twenty-four hours beginning with midnight and ending with the following midnight. An individual who has been present in a foreign country and then travels over areas not within any foreign country for less than twenty-four hours shall not be deemed outside a foreign country during the period of travel. If an individual who is in transit between two points outside the United States is physically present in the United States for less than twenty-four hours, such individual shall not be treated as present in the United States during such transit but shall be treated as travelling over areas not within any foreign country. For purposes of this paragraph (d)(2), the term “transit between two points outside the United States” has the same meaning that it has when used in section 7701(b)(6)(C).
(3) Illustrations of the physical presence requirement. The physical presence requirement of paragraph (a)(2)(ii) of this section is illustrated by the following examples:
(e) Special rules. For purposes only of establishing that an individual is a qualified individual under paragraph (a) of this section, residence or presence in a foreign country while there employed by the U.S. government or any agency or instrumentality of the U.S. government counts towards satisfaction of the requirements of § 1.911-2(a). (But see section 911(b)(1)(B)(ii) and § 1.911-3(c)(3) for the rule excluding amounts paid by the U.S. government to an employee from the definition of foreign earned income.) Time spent in a foreign country prior to January 1, 1982, counts toward satisfaction of the bona fide residence and physical presence requirements, even though no exclusion or deduction may be allowed under section 911 for income attributable to services performed during that time. For purposes or paragraph (a)(2)(ii) of this section, the term “resident of the United States” includes an individual for whom a valid election is in effect under section 6013 (g) or (h) for the taxable year or years during which the physical presence requirement is satisfied.
(f) Waiver of period of stay in foreign country due to war or civil unrest. Notwithstanding the requirements of paragraph (a) of this section, an individual whose tax home is in, a foreign country, and who is a bona fide resident of, or present in a foreign country for any period, who leaves the foreign country after August 31, 1978, before meeting the requirements of paragraph (a) of this section, may as provided in this paragraph, qualify to make an election under section 911(a) and § 1.911-7(a). If the Secretary determines, after consultation with the Secretary of State or his delegate, that war, civil unrest, or similar adverse conditions existed in a foreign country, then the Secretary shall publish the name of the foreign country and the dates between which such conditions were deemed to exist. In order to qualify to make an election under this paragraph, the individual must establish to the satisfaction of the Secretary that the individual left a foreign country, the name of which has been published by the Secretary, during the period when adverse conditions existed and that the individual could reasonably have expected to meet the requirements of paragraph (a) of this section but for the adverse conditions. The individual shall attach to his return for the taxable year a statement that the individual expected to meet the requirements of paragraph (a) of this section but for the conditions in the foreign country which precluded the normal conduct of business by the individual. Such individual shall be treated as a qualified individual, but only for the actual period of residence or presence. Thus, in determining the number of the individual's qualifying days, only days within the period of actual residence or presence shall be counted.
(g) United States. The term “United States” when used in a geographical sense includes any territory under the sovereignty of the United States. It includes the states, the District of Columbia, the possessions and territories of the United States, the territorial waters of the United States, the air space over the United States, and the seabed and subsoil of those submarine areas which are adjacent to the territorial waters of the United States and over which the United States has exclusive rights, in accordance with international law, with respect to the exploration and exploitation of natural resources.
(h) Foreign country. The term “foreign country” when used in a geographical sense includes any territory under the sovereignty of a government other than that of the United States. It includes the territorial waters of the foreign country (determined in accordance with the laws of the United States), the air space over the foreign country, and the seabed and subsoil of those submarine areas which are adjacent to the territorial waters of the foreign country and over which the foreign country has exclusive rights, in accordance with international law, with respect to the exploration and exploitation of natural resources.
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Treas. Reg. §1.911-2(a)In general.
In general. An individual is a qualified individual if:
(1) The individual's tax home is in a foreign country or countries throughout—
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Treas. Reg. §1.911-2(b)Tax home.
Tax home. For purposes of paragraph (a)(i) of this section, the term “tax home” has the same meaning which it has for purposes of section 162(a)(2) (relating to travel expenses away from home). Thus, under section 911, an individual's tax home is considered to be located at his regular or principal (if more than one regular) place of business or, if the individual has no regular or principal place of business because of the nature of the business, then at his regular place of abode in a real and substantial sense. An individual shall not, however, be considered to have a tax home in a foreign country for any period for which the individual's abode is in the United States. Temporary presence of the individual in the United States does not necessarily mean that the individual's abode is in the United States during that time. Maintenance of a dwelling in the United States by an individual, whether or not that dwelling is used by the individual's spouse and dependents, does not necessarily mean that the individual's abode is in the United States.
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Treas. Reg. §1.911-2(c)Determination of bona fide residence.
Determination of bona fide residence. For purposes of paragraph (a)(2)(i) of this section, whether an individual is a bona fide resident of a foreign country shall be determined by applying, to the extent practical, the principles of section 871 and the regulations thereunder, relating to the determination of the residence of aliens. Bona fide residence in a foreign country or countries for an uninterrupted period may be established, even if temporary visits are made during the period to the United States or elsewhere on vacation or business. An individual with earned income from sources within a foreign country is not a bona fide resident of that country if:
(1) The individual claims to be a nonresident of that foreign country in a statement submitted to the authorities of that country, and
(2) The earned income of the individual is not subject, by reason of nonresidency in the foreign country, to the income tax of that country.
If an individual has submitted a statement of nonresidence to the authorities of a foreign country the accuracy of which has not been resolved as of any date when a determination of the individual's bona fide residence is being made, then the individual will not be considered a bona fide resident of the foreign country as of that date.
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Treas. Reg. §1.911-2(d)Determination of physical presence.
Determination of physical presence. For purposes of paragraph (a)(2)(ii) of this section, the following rules apply.
(1) Twelve-month test. A period of twelve consecutive months may begin with any day but must end on the day before the corresponding day in the twelfth succeeding month. The twelve-month period may begin before or after arrival in a foreign country and may end before or after departure.
(2) 330-day test. The 330 full days need not be consecutive but may be interrupted by periods during which the individual is not present in a foreign country. In computing the minimum 330 full days of presence in a foreign country or countries, all separate periods of such presence during the period of twelve consecutive months are aggregated. A full day is a continuous period of twenty-four hours beginning with midnight and ending with the following midnight. An individual who has been present in a foreign country and then travels over areas not within any foreign country for less than twenty-four hours shall not be deemed outside a foreign country during the period of travel. If an individual who is in transit between two points outside the United States is physically present in the United States for less than twenty-four hours, such individual shall not be treated as present in the United States during such transit but shall be treated as travelling over areas not within any foreign country. For purposes of this paragraph (d)(2), the term “transit between two points outside the United States” has the same meaning that it has when used in section 7701(b)(6)(C).
(3) Illustrations of the physical presence requirement. The physical presence requirement of paragraph (a)(2)(ii) of this section is illustrated by the following examples:
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Treas. Reg. §1.911-2(e)Special rules.
Special rules. For purposes only of establishing that an individual is a qualified individual under paragraph (a) of this section, residence or presence in a foreign country while there employed by the U.S. government or any agency or instrumentality of the U.S. government counts towards satisfaction of the requirements of § 1.911-2(a). (But see section 911(b)(1)(B)(ii) and § 1.911-3(c)(3) for the rule excluding amounts paid by the U.S. government to an employee from the definition of foreign earned income.) Time spent in a foreign country prior to January 1, 1982, counts toward satisfaction of the bona fide residence and physical presence requirements, even though no exclusion or deduction may be allowed under section 911 for income attributable to services performed during that time. For purposes or paragraph (a)(2)(ii) of this section, the term “resident of the United States” includes an individual for whom a valid election is in effect under section 6013 (g) or (h) for the taxable year or years during which the physical presence requirement is satisfied.
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Treas. Reg. §1.911-2(f)Waiver of period of stay in foreign country due to war or civil unrest.
Waiver of period of stay in foreign country due to war or civil unrest. Notwithstanding the requirements of paragraph (a) of this section, an individual whose tax home is in, a foreign country, and who is a bona fide resident of, or present in a foreign country for any period, who leaves the foreign country after August 31, 1978, before meeting the requirements of paragraph (a) of this section, may as provided in this paragraph, qualify to make an election under section 911(a) and § 1.911-7(a). If the Secretary determines, after consultation with the Secretary of State or his delegate, that war, civil unrest, or similar adverse conditions existed in a foreign country, then the Secretary shall publish the name of the foreign country and the dates between which such conditions were deemed to exist. In order to qualify to make an election under this paragraph, the individual must establish to the satisfaction of the Secretary that the individual left a foreign country, the name of which has been published by the Secretary, during the period when adverse conditions existed and that the individual could reasonably have expected to meet the requirements of paragraph (a) of this section but for the adverse conditions. The individual shall attach to his return for the taxable year a statement that the individual expected to meet the requirements of paragraph (a) of this section but for the conditions in the foreign country which precluded the normal conduct of business by the individual. Such individual shall be treated as a qualified individual, but only for the actual period of residence or presence. Thus, in determining the number of the individual's qualifying days, only days within the period of actual residence or presence shall be counted.
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Treas. Reg. §1.911-2(g)United States.
United States. The term “United States” when used in a geographical sense includes any territory under the sovereignty of the United States. It includes the states, the District of Columbia, the possessions and territories of the United States, the territorial waters of the United States, the air space over the United States, and the seabed and subsoil of those submarine areas which are adjacent to the territorial waters of the United States and over which the United States has exclusive rights, in accordance with international law, with respect to the exploration and exploitation of natural resources.
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Treas. Reg. §1.911-2(h)Foreign country.
Foreign country. The term “foreign country” when used in a geographical sense includes any territory under the sovereignty of a government other than that of the United States. It includes the territorial waters of the foreign country (determined in accordance with the laws of the United States), the air space over the foreign country, and the seabed and subsoil of those submarine areas which are adjacent to the territorial waters of the foreign country and over which the foreign country has exclusive rights, in accordance with international law, with respect to the exploration and exploitation of natural resources.
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Treas. Reg. §1.911-2(i)§1.911-2(i)
A citizen of the United States who establishes to the satisfaction of the Commissioner or his delegate that the individual has been a bona fide resident of a foreign country or countries for an uninterrupted period which includes an entire taxable year, or
(ii) A citizen or resident of the United States who has been physically present in a foreign country or countries for at least 330 full days during any period of twelve consecutive months.
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Treas. Reg. §1.911-3Determination of amount of foreign earned income to be excluded
(a) Definition of foreign earned income. For purposes of section 911 and the regulations thereunder, the term “foreign earned income” means earned income (as defined in paragraph (b) of this section) from sources within a foreign country (as defined in § 1.911-2(h)) that is earned during a period for which the individual qualifies under § 1.911-2(a) to make an election. Earned income is from sources within a foreign country if it is attributable to services performed by an individual in a foreign country or countries. The place of receipt of earned income is immaterial in determining whether earned income is attributable to services performed in a foreign country or countries.
(b) Definition of earned income—(1) In general. The term “earned income” means wages, salaries, professional fees, and other amounts received as compensation for personal services actually rendered including the fair market value of all remuneration paid in any medium other than cash. Earned income does not include any portion of an amount paid by a corporation which represents a distribution of earnings and profits rather than a reasonable allowance as compensation for personal services actually rendered to the corporation.
(2) Earned income from business in which capital is material. In the case of an individual engaged in a trade or business (other than in corporate form) in which both personal services and capital are material income producing factors, a reasonable allowance as compensation for the personal services actually rendered by the individual shall be considered earned income, but the total amount which shall be treated as the earned income of the individual from such trade or business shall in no case exceed thirty percent of the individual's share of the net profits of such trade or business.
(3) Professional fees. Earned income includes all fees received by an individual engaged in a professional occupation (such as doctor or lawyer) in the performance of professional activities. Professional fees constitute earned income even though the individual employs assistants to perform part or all of the services, provided the patients or clients are those of the individual and look to the individual as the person responsible for the services rendered.
(c) Amounts not included in foreign earned income. Foreign earned income does not include an amount:
(1) Excluded from gross income under section 119;
(2) Received as a pension or annuity (including social security benefits);
(3) Paid to an employee by an employer which is the U.S. government or any U.S. government agency or instrumentality;
(4) Included in the individual's gross income by reason of section 402(b) (relating to the taxability of a beneficiary of a nonexempt trust) or section 403(c) (relating to the taxability of a beneficiary under a nonqualified annuity or under annuities purchased by exempt organizations);
(5) Included in gross income by reason of § 1.911-6(b)(4)(ii); or
(6) Received after the close of the first taxable year following the taxable year in which the services giving rise to the amounts were performed. For treatment of amounts received after December 31, 1962, which are attributable to services performed on or before December 31, 1962, and with respect to which there existed on March 12, 1962, a right (whether forfeitable or nonforfeitable) to receive such amounts, see § 1.72-8.
(d) Determination of the amount of foreign earned income that may be excluded under section 911(a)(1)—(1) In general. Foreign earned income described in this section may be excluded under section 911(a)(1) and this paragraph only to the extent of the limitation specified in paragraph (d)(2) of this section. Income is considered to be earned in the taxable year in which the services giving rise to the income are performed. The determination of the amount of excluded earned income in this manner does not affect the time for reporting any amounts included in gross income.
(2) Limitation—(i) In general. The term “section 911(a)(1) limitation” means the amount of foreign earned income for a taxable year which may be excluded under section 911(a)(1). The section 911(a)(1) limitation shall be equal to the lesser of the qualified individual's foreign earned income for the taxable year in excess of amounts that the individual elected to exclude from gross income under section 911(a)(2) or the product of the annual rate for the taxable year (as specified in paragraph (d)(2)(ii) of this section) multiplied by the following fraction:
(ii) Annual rate for the taxable year. The annual rate for the taxable year is the rate set forth in section 911(b)(2)(A).
(3) Number of qualifying days. For purposes of section 911 and the regulations thereunder, the number of qualifying days is the number of days in the taxable year within the period during which the individual met the tax home requirement and either the bona fide residence requirement or the physical presence requirement of § 1.911-2(a). Although the period of bona fide residence must include an entire taxable year, the entire uninterrupted period of residence may include fractional parts of a taxable year. For instance, if an individual who was a calendar year taxpayer established a tax home and a residence in a foreign country as of November 1, 1982, and maintained the tax home and the residence through March 31, 1984, then the uninterrupted period of bona fide residence includes fractional parts of the years 1982 and 1984, and all of 1983. The number of qualifying days in 1982 is sixty-one. The number of qualifying days in 1983 is 365. The number of qualifying days in 1984 is ninety-one. The period during which the physical presence requirement of § 1.911-2(a)(2)(ii) is met is any twelve consecutive month period during which the individual is physically present in one or more foreign countries for 330 days and the individual's tax home is in a foreign country during each day of such physical presence. Such period may include days when the individual is not physically present in a foreign country, and days when the individual does not maintain a tax home in a foreign country. Such period may include fractional parts of a taxable year. Thus, if an individual's period of physical, presence is the twelve-month period beginning June 1, 1982, and ending May 31, 1983, the number of qualifying days in 1982 is 214 and the number of qualifying days in 1983 is 151.
(e) Attribution rules—(1) In general. Foreign earned income is considered to be earned in the taxable year in which the individual performed the services giving rise to the income. If income is earned in one taxable year and received in another taxable year, then, for purposes of determining the amount of foreign earned income that the individual may exclude under section 911(a), the individual must attribute the income to the taxable year in which the services giving rise to the income were performed. Thus, any reimbursement would be attributable to the taxable year in which the services giving rise to the obligation to pay the reimbursement were performed, not the taxable year in which the reimbursement was received. For example, tax equalization payments are normally received in the year after the year in which the services giving rise to the obligation to pay the tax equalization payment were performed. Therefore, such payments will almost always have to be attributed to the prior year. Foreign earned income attributable to services performed in a preceding taxable year shall be excludable from gross income in the year of receipt only to the extent such amount could have been excluded under paragraph (d)(1) in the preceding taxable year, had such amount been received in the preceding taxable year. The taxable year to which income is attributable will be determined on the basis of all the facts and circumstances.
(2) Priority of use of the section 911(a)(1) limitation. Foreign earned income received in the year in which it is earned shall be applied to the section 911(a)(1) limitation for that year before applying income earned in that year that is received in any other year. Foreign earned income that is earned in one year and received in another year shall be applied to the section 911(a)(1) limitation for the year in which it was earned, on a year by year basis, in any order that the individual chooses. (But see section 911(b)(1)(B)(iv)). An individual may not amend his return to change the treatment of income with respect to the section 911(a)(1) exclusion after the period provided by section 6511(a). The special period of limitation provided by section 6511(d)(3) does not apply for this purpose. For example, C, a qualified individual, receives an advance bonus of $10,000 in 1982, salary of $70,000 in 1983, and a performance bonus of $10,000 in 1984, all of which are foreign earned income for 1983. C has a section 911(a)(1) limitation for 1983 of $80,000, and has no housing cost amount exclusion. On his income tax return for 1983, C elects to exclude foreign earned income of $70,000 received in 1983. C may also exclude his $10,000 advance bonus received in 1982 (by filing an amended return for 1982), or he may exclude the $10,000 performance bonus received in 1984 on his 1984 income tax return. However, C may not exclude part of the 1982 bonus and part of the 1984 bonus.
(3) Exception for year-end payroll period. Notwithstanding paragraph (e)(1) of this section, salary or wage payments of a cash basis taxpayer shall be attributed entirely to the year of receipt under the following circumstances:
(i) The period for which the payment is made is a normal payroll period of the employer which regularly applies to the employee;
(ii) The payroll period includes the last day of the employee's taxable year;
(iii) The payroll period does not exceed 16 days; and
(iv) The payment is part of a normal payroll of the employer that is distributed at the same time, in relation to the payroll period, that such payroll would normally be distributed, and is distributed before the end of the next succeeding payroll period.
(4) Attribution of bonuses and substantially nonvested property to periods in which services were performed—(i) In general. Bonuses and substantially nonvested property are attributable to all of the services giving rise to the income on the basis of all the facts and circumstances. If an individual receives a bonus or substantially nonvested property (as defined in § 1.83-3(b)) and it is determined to be attributable to services performed in more than one taxable year, then, for purposes of determining the amount eligible for exclusion from gross income in the year the bonus is received or the property vests, a portion of such amount shall be treated as attributable to services performed in each taxable year (or portion thereof) during the period when services giving rise to the bonus or the substantially nonvested property were performed. Such portion shall be determined by dividing the amount of the bonus or the excess of the fair market value of the vested property over the amount paid, if any, for the vested property, by the number of months in the period when services giving rise to such amount were performed, and multiplying the quotient by the number of months in such period in the taxable year. For purposes of this section, the term “month” means a calendar month. A fraction of a calendar month shall be deemed a month if it includes fifteen or more days.
(ii) Examples. The following examples illustrate the application of this paragraph (e)(4).
(iii) Special rule for elections under section 83(b). If an individual receives substantially nonvested property and makes an election under section 83(b) and § 1.83-2(a) to include in his gross income the amount determined under section 83(b)(1)(A) and (B) and § 1.83-2(a) for the taxable year in which the property is transferred (as defined in § 1.83-3(a)), then, for the purpose of determining the amount eligible for exclusion in the year of receipt, the individual may elect either of the following options:
(A) Substantially nonvested property may be treated as attributable entirely to services performed in the taxable year in which an election to include it in income is made. If so treated, then the amount otherwise included in gross income as determined under § 1.83-2(a) will be excludable under section 911(a) for such year subject to the limitation provided in § 1.911-3(d)(2) for such year.
(B) A portion of the substantially nonvested property may be treated as attributable to services performed or to be performed in each taxable year during which the substantial risk of forfeiture (as defined in section 83(c) and § 1.83-3(c)) exists. The portion treated as attributable to services performed or to be performed in each taxable year is determined by dividing the amount of the substantially nonvested property included in gross income as determined under § 1.83-2(a) by the number of months during the period when a substantial risk of forfeiture exists. The quotient is multiplied by the total number of months in the taxable year during which a substantial risk of forfeiture exists. The amount determined to be attributable to services performed in the year the election is made shall be excluded from gross income for such year as provided in paragraph (d)(2) of this section. Amounts treated as attributable to services performed in subsequent taxable years shall be excludable in the year of receipt only to the extent such amounts could be excluded under paragraph (d)(2) of this section in such subsequent years. An individual may obtain such additional exclusion by filing an amended return for the taxable year in which the property was transferred. The individual may only amend his or her return within the period provided by section 6511(a) and the regulations thereunder.
(5) Moving expense reimbursements—(i) Source of reimbursements. For the purpose of determining whether a moving expense reimbursement is attributable to services performed within a foreign country or within the United States, in the absence of evidence to the contrary, the reimbursement shall be attributable to future services to be performed at the new principal place of work. Thus, a reimbursement received by an employee from his employer for the expenses of a move to a foreign country will generally be attributable to services performed in the foreign country. A reimbursement received by an employee from his employer for the expenses of a move from a foreign country to the United States will generally be attributable to services performed in the United States. For purposes of this paragraph (e)(5), evidence to the contrary includes, but is not limited to, an agreement, between the employer and the employee, or a statement of company policy, which is reduced to writing before the move to the foreign country and which is entered into or established to induce the employee or employees to move to a foreign country. The writing must state that the employer will reimburse the employee for moving expenses incurred in returning to the United States regardless of whether the employee continues to work for the employer after the employee returns to the United States. The writing may contain conditions upon which the right to reimbursement is determined as long as the conditions set forth standards that are definitely ascertainable and the conditions can only be fulfilled prior to, or through completion of the employee's return move to the United States that is the subject of the writing. In no case will an oral agreement or statement of company policy concerning moving expenses be considered evidence to the contrary. For the purpose of determining whether a storage expense reimbursement is attributable to services performed within a foreign country, in the case of storage expenses incurred after December 31, 1983, the reimbursement shall be attributable to services performed during the period of time for which the storage expenses are incurred.
(ii) Attribution of foreign source reimbursements to taxable years in which services are performed—(A) In general. If a reimbursement for moving expenses is determined to be from foreign sources under paragraph (e)(5)(i) of this section, then for the purpose of determining the amount eligible for exclusion in accordance with paragraphs (d)(2) and (e)(2) of this section, the reimbursement shall be considered attributable to services performed in the year of the move as long as the individual is a qualified individual for a period that includes 120 days in the year of the move. The period that is used in determining the number of qualifying days for purposes of the individual's section 911(a)(1) limitation (under paragraph (d)(2) of this section) must also be used in determining whether the individual is a qualified individual for a period that includes 120 days in the year of the move. If the individual is not a qualified individual for such period, then the individual shall treat a portion of the reimbursement as attributable to services performed in the year of the move, and a portion as attributable to services performed in the succeeding taxable year, if the move is from the United States to a foreign country, or to the prior taxable year, if the move is from a foreign country to the United States. The portion of the reimbursement treated as attributable to services performed in the year of the move shall be determined by multiplying the total reimbursement by the following fraction:
The remaining portion of the reimbursement shall be treated as attributable to services performed in the year succeeding or preceding the year of the move. Amounts treated as attributable to services performed in a year succeeding or preceding the year of the move shall be excludable in the year of receipt only to the extent such amounts could be excluded under paragraph (d)(2) of this section in such succeeding or preceding year.
(B) Moves beginning before January 1, 1984. Notwithstanding paragraph (e)(5)(ii)(A) of this section, this paragraph (e)(5)(ii)(B) shall apply for moves begun before January 1, 1984. If a reimbursement for moving expenses is determined to be from foreign sources under paragraph (e)(5)(i) of this section, then for the purpose of determining the amount eligible for exclusion in accordance with paragraphs (d)(2) and (e)(2) of this section, the reimbursement shall be considered attributable to services performed in the year of the move. However, if the individual does not qualify under section 911(d)(1) and § 1.911-2(a) for the entire taxable year of the move, then the individual shall treat a portion of the reimbursement as attributable to services performed in the succeeding taxable year, if the move is from the United States to a foreign country, or to the prior taxable year, if the move is from a foreign country to the United States. The portion of the reimbursement treated as attributable to services performed in the year succeeding or preceding the move shall be determined by multiplying the total reimbursement by the following fraction:
and subtracting the product from the total reimbursement. Amounts treated as attributable to services performed in a year succeeding or preceding the year of the move shall be excludable in the year of receipt only to the extent such amounts could be excluded under paragraph (d)(2) of this section in such succeeding or preceding year.
(f) Examples. The following examples illustrate the application of this section.
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Treas. Reg. §1.911-3(a)Definition of foreign earned income.
Definition of foreign earned income. For purposes of section 911 and the regulations thereunder, the term “foreign earned income” means earned income (as defined in paragraph (b) of this section) from sources within a foreign country (as defined in § 1.911-2(h)) that is earned during a period for which the individual qualifies under § 1.911-2(a) to make an election. Earned income is from sources within a foreign country if it is attributable to services performed by an individual in a foreign country or countries. The place of receipt of earned income is immaterial in determining whether earned income is attributable to services performed in a foreign country or countries.
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Treas. Reg. §1.911-3(b)Definition of earned income—(1) In general.
Definition of earned income—(1) In general. The term “earned income” means wages, salaries, professional fees, and other amounts received as compensation for personal services actually rendered including the fair market value of all remuneration paid in any medium other than cash. Earned income does not include any portion of an amount paid by a corporation which represents a distribution of earnings and profits rather than a reasonable allowance as compensation for personal services actually rendered to the corporation.
(2) Earned income from business in which capital is material. In the case of an individual engaged in a trade or business (other than in corporate form) in which both personal services and capital are material income producing factors, a reasonable allowance as compensation for the personal services actually rendered by the individual shall be considered earned income, but the total amount which shall be treated as the earned income of the individual from such trade or business shall in no case exceed thirty percent of the individual's share of the net profits of such trade or business.
(3) Professional fees. Earned income includes all fees received by an individual engaged in a professional occupation (such as doctor or lawyer) in the performance of professional activities. Professional fees constitute earned income even though the individual employs assistants to perform part or all of the services, provided the patients or clients are those of the individual and look to the individual as the person responsible for the services rendered.
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Treas. Reg. §1.911-3(c)Amounts not included in foreign earned income.
Amounts not included in foreign earned income. Foreign earned income does not include an amount:
(1) Excluded from gross income under section 119;
(2) Received as a pension or annuity (including social security benefits);
(3) Paid to an employee by an employer which is the U.S. government or any U.S. government agency or instrumentality;
(4) Included in the individual's gross income by reason of section 402(b) (relating to the taxability of a beneficiary of a nonexempt trust) or section 403(c) (relating to the taxability of a beneficiary under a nonqualified annuity or under annuities purchased by exempt organizations);
(5) Included in gross income by reason of § 1.911-6(b)(4)(ii); or
(6) Received after the close of the first taxable year following the taxable year in which the services giving rise to the amounts were performed. For treatment of amounts received after December 31, 1962, which are attributable to services performed on or before December 31, 1962, and with respect to which there existed on March 12, 1962, a right (whether forfeitable or nonforfeitable) to receive such amounts, see § 1.72-8.
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Treas. Reg. §1.911-3(d)Determination of the amount of foreign earned income that may be excluded under section 911(a)(1)—(1) In general.
Determination of the amount of foreign earned income that may be excluded under section 911(a)(1)—(1) In general. Foreign earned income described in this section may be excluded under section 911(a)(1) and this paragraph only to the extent of the limitation specified in paragraph (d)(2) of this section. Income is considered to be earned in the taxable year in which the services giving rise to the income are performed. The determination of the amount of excluded earned income in this manner does not affect the time for reporting any amounts included in gross income.
(2) Limitation—(i) In general. The term “section 911(a)(1) limitation” means the amount of foreign earned income for a taxable year which may be excluded under section 911(a)(1). The section 911(a)(1) limitation shall be equal to the lesser of the qualified individual's foreign earned income for the taxable year in excess of amounts that the individual elected to exclude from gross income under section 911(a)(2) or the product of the annual rate for the taxable year (as specified in paragraph (d)(2)(ii) of this section) multiplied by the following fraction:
(ii) Annual rate for the taxable year. The annual rate for the taxable year is the rate set forth in section 911(b)(2)(A).
(3) Number of qualifying days. For purposes of section 911 and the regulations thereunder, the number of qualifying days is the number of days in the taxable year within the period during which the individual met the tax home requirement and either the bona fide residence requirement or the physical presence requirement of § 1.911-2(a). Although the period of bona fide residence must include an entire taxable year, the entire uninterrupted period of residence may include fractional parts of a taxable year. For instance, if an individual who was a calendar year taxpayer established a tax home and a residence in a foreign country as of November 1, 1982, and maintained the tax home and the residence through March 31, 1984, then the uninterrupted period of bona fide residence includes fractional parts of the years 1982 and 1984, and all of 1983. The number of qualifying days in 1982 is sixty-one. The number of qualifying days in 1983 is 365. The number of qualifying days in 1984 is ninety-one. The period during which the physical presence requirement of § 1.911-2(a)(2)(ii) is met is any twelve consecutive month period during which the individual is physically present in one or more foreign countries for 330 days and the individual's tax home is in a foreign country during each day of such physical presence. Such period may include days when the individual is not physically present in a foreign country, and days when the individual does not maintain a tax home in a foreign country. Such period may include fractional parts of a taxable year. Thus, if an individual's period of physical, presence is the twelve-month period beginning June 1, 1982, and ending May 31, 1983, the number of qualifying days in 1982 is 214 and the number of qualifying days in 1983 is 151.
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Treas. Reg. §1.911-3(e)Attribution rules—(1) In general.
Attribution rules—(1) In general. Foreign earned income is considered to be earned in the taxable year in which the individual performed the services giving rise to the income. If income is earned in one taxable year and received in another taxable year, then, for purposes of determining the amount of foreign earned income that the individual may exclude under section 911(a), the individual must attribute the income to the taxable year in which the services giving rise to the income were performed. Thus, any reimbursement would be attributable to the taxable year in which the services giving rise to the obligation to pay the reimbursement were performed, not the taxable year in which the reimbursement was received. For example, tax equalization payments are normally received in the year after the year in which the services giving rise to the obligation to pay the tax equalization payment were performed. Therefore, such payments will almost always have to be attributed to the prior year. Foreign earned income attributable to services performed in a preceding taxable year shall be excludable from gross income in the year of receipt only to the extent such amount could have been excluded under paragraph (d)(1) in the preceding taxable year, had such amount been received in the preceding taxable year. The taxable year to which income is attributable will be determined on the basis of all the facts and circumstances.
(2) Priority of use of the section 911(a)(1) limitation. Foreign earned income received in the year in which it is earned shall be applied to the section 911(a)(1) limitation for that year before applying income earned in that year that is received in any other year. Foreign earned income that is earned in one year and received in another year shall be applied to the section 911(a)(1) limitation for the year in which it was earned, on a year by year basis, in any order that the individual chooses. (But see section 911(b)(1)(B)(iv)). An individual may not amend his return to change the treatment of income with respect to the section 911(a)(1) exclusion after the period provided by section 6511(a). The special period of limitation provided by section 6511(d)(3) does not apply for this purpose. For example, C, a qualified individual, receives an advance bonus of $10,000 in 1982, salary of $70,000 in 1983, and a performance bonus of $10,000 in 1984, all of which are foreign earned income for 1983. C has a section 911(a)(1) limitation for 1983 of $80,000, and has no housing cost amount exclusion. On his income tax return for 1983, C elects to exclude foreign earned income of $70,000 received in 1983. C may also exclude his $10,000 advance bonus received in 1982 (by filing an amended return for 1982), or he may exclude the $10,000 performance bonus received in 1984 on his 1984 income tax return. However, C may not exclude part of the 1982 bonus and part of the 1984 bonus.
(3) Exception for year-end payroll period. Notwithstanding paragraph (e)(1) of this section, salary or wage payments of a cash basis taxpayer shall be attributed entirely to the year of receipt under the following circumstances:
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Treas. Reg. §1.911-3(f)Examples.
Examples. The following examples illustrate the application of this section.
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Treas. Reg. §1.911-3(i)§1.911-3(i)
The period for which the payment is made is a normal payroll period of the employer which regularly applies to the employee;
(ii) The payroll period includes the last day of the employee's taxable year;
(iii) The payroll period does not exceed 16 days; and
(iv) The payment is part of a normal payroll of the employer that is distributed at the same time, in relation to the payroll period, that such payroll would normally be distributed, and is distributed before the end of the next succeeding payroll period.
(4) Attribution of bonuses and substantially nonvested property to periods in which services were performed—(i) In general. Bonuses and substantially nonvested property are attributable to all of the services giving rise to the income on the basis of all the facts and circumstances. If an individual receives a bonus or substantially nonvested property (as defined in § 1.83-3(b)) and it is determined to be attributable to services performed in more than one taxable year, then, for purposes of determining the amount eligible for exclusion from gross income in the year the bonus is received or the property vests, a portion of such amount shall be treated as attributable to services performed in each taxable year (or portion thereof) during the period when services giving rise to the bonus or the substantially nonvested property were performed. Such portion shall be determined by dividing the amount of the bonus or the excess of the fair market value of the vested property over the amount paid, if any, for the vested property, by the number of months in the period when services giving rise to such amount were performed, and multiplying the quotient by the number of months in such period in the taxable year. For purposes of this section, the term “month” means a calendar month. A fraction of a calendar month shall be deemed a month if it includes fifteen or more days.
(ii) Examples. The following examples illustrate the application of this paragraph (e)(4).
(iii) Special rule for elections under section 83(b). If an individual receives substantially nonvested property and makes an election under section 83(b) and § 1.83-2(a) to include in his gross income the amount determined under section 83(b)(1)(A) and (B) and § 1.83-2(a) for the taxable year in which the property is transferred (as defined in § 1.83-3(a)), then, for the purpose of determining the amount eligible for exclusion in the year of receipt, the individual may elect either of the following options:
(A) Substantially nonvested property may be treated as attributable entirely to services performed in the taxable year in which an election to include it in income is made. If so treated, then the amount otherwise included in gross income as determined under § 1.83-2(a) will be excludable under section 911(a) for such year subject to the limitation provided in § 1.911-3(d)(2) for such year.
(B) A portion of the substantially nonvested property may be treated as attributable to services performed or to be performed in each taxable year during which the substantial risk of forfeiture (as defined in section 83(c) and § 1.83-3(c)) exists. The portion treated as attributable to services performed or to be performed in each taxable year is determined by dividing the amount of the substantially nonvested property included in gross income as determined under § 1.83-2(a) by the number of months during the period when a substantial risk of forfeiture exists. The quotient is multiplied by the total number of months in the taxable year during which a substantial risk of forfeiture exists. The amount determined to be attributable to services performed in the year the election is made shall be excluded from gross income for such year as provided in paragraph (d)(2) of this section. Amounts treated as attributable to services performed in subsequent taxable years shall be excludable in the year of receipt only to the extent such amounts could be excluded under paragraph (d)(2) of this section in such subsequent years. An individual may obtain such additional exclusion by filing an amended return for the taxable year in which the property was transferred. The individual may only amend his or her return within the period provided by section 6511(a) and the regulations thereunder.
(5) Moving expense reimbursements—(i) Source of reimbursements. For the purpose of determining whether a moving expense reimbursement is attributable to services performed within a foreign country or within the United States, in the absence of evidence to the contrary, the reimbursement shall be attributable to future services to be performed at the new principal place of work. Thus, a reimbursement received by an employee from his employer for the expenses of a move to a foreign country will generally be attributable to services performed in the foreign country. A reimbursement received by an employee from his employer for the expenses of a move from a foreign country to the United States will generally be attributable to services performed in the United States. For purposes of this paragraph (e)(5), evidence to the contrary includes, but is not limited to, an agreement, between the employer and the employee, or a statement of company policy, which is reduced to writing before the move to the foreign country and which is entered into or established to induce the employee or employees to move to a foreign country. The writing must state that the employer will reimburse the employee for moving expenses incurred in returning to the United States regardless of whether the employee continues to work for the employer after the employee returns to the United States. The writing may contain conditions upon which the right to reimbursement is determined as long as the conditions set forth standards that are definitely ascertainable and the conditions can only be fulfilled prior to, or through completion of the employee's return move to the United States that is the subject of the writing. In no case will an oral agreement or statement of company policy concerning moving expenses be considered evidence to the contrary. For the purpose of determining whether a storage expense reimbursement is attributable to services performed within a foreign country, in the case of storage expenses incurred after December 31, 1983, the reimbursement shall be attributable to services performed during the period of time for which the storage expenses are incurred.
(ii) Attribution of foreign source reimbursements to taxable years in which services are performed—(A) In general. If a reimbursement for moving expenses is determined to be from foreign sources under paragraph (e)(5)(i) of this section, then for the purpose of determining the amount eligible for exclusion in accordance with paragraphs (d)(2) and (e)(2) of this section, the reimbursement shall be considered attributable to services performed in the year of the move as long as the individual is a qualified individual for a period that includes 120 days in the year of the move. The period that is used in determining the number of qualifying days for purposes of the individual's section 911(a)(1) limitation (under paragraph (d)(2) of this section) must also be used in determining whether the individual is a qualified individual for a period that includes 120 days in the year of the move. If the individual is not a qualified individual for such period, then the individual shall treat a portion of the reimbursement as attributable to services performed in the year of the move, and a portion as attributable to services performed in the succeeding taxable year, if the move is from the United States to a foreign country, or to the prior taxable year, if the move is from a foreign country to the United States. The portion of the reimbursement treated as attributable to services performed in the year of the move shall be determined by multiplying the total reimbursement by the following fraction:
The remaining portion of the reimbursement shall be treated as attributable to services performed in the year succeeding or preceding the year of the move. Amounts treated as attributable to services performed in a year succeeding or preceding the year of the move shall be excludable in the year of receipt only to the extent such amounts could be excluded under paragraph (d)(2) of this section in such succeeding or preceding year.
(B) Moves beginning before January 1, 1984. Notwithstanding paragraph (e)(5)(ii)(A) of this section, this paragraph (e)(5)(ii)(B) shall apply for moves begun before January 1, 1984. If a reimbursement for moving expenses is determined to be from foreign sources under paragraph (e)(5)(i) of this section, then for the purpose of determining the amount eligible for exclusion in accordance with paragraphs (d)(2) and (e)(2) of this section, the reimbursement shall be considered attributable to services performed in the year of the move. However, if the individual does not qualify under section 911(d)(1) and § 1.911-2(a) for the entire taxable year of the move, then the individual shall treat a portion of the reimbursement as attributable to services performed in the succeeding taxable year, if the move is from the United States to a foreign country, or to the prior taxable year, if the move is from a foreign country to the United States. The portion of the reimbursement treated as attributable to services performed in the year succeeding or preceding the move shall be determined by multiplying the total reimbursement by the following fraction:
and subtracting the product from the total reimbursement. Amounts treated as attributable to services performed in a year succeeding or preceding the year of the move shall be excludable in the year of receipt only to the extent such amounts could be excluded under paragraph (d)(2) of this section in such succeeding or preceding year.
-
Treas. Reg. §1.911-4Determination of housing cost amount eligible for exclusion or deduction
(a) Definition of housing cost amount. The term “housing cost amount” means an amount equal to the reasonable expenses paid or incurred (as defined in section 7701(a)(25)) during the taxable year by or on behalf of the individual attributable to housing in a foreign country for the individual and any spouse or dependents who reside with the individual (or live in a second foreign household described in paragraph (b)(5) of this section) less the base housing amount as defined in paragraph (c) of this section. The housing cost amount must be reduced by the amount of any military or section 912 allowance or similar allowance excludable from gross income that is intended to compensate the individual or the individual's spouse in whole or in part for the expenses of housing during the same period for which the individual claims a housing cost amount exclusion or deduction.
(b) Housing expenses—(1) Included expenses. For purposes of paragraph (a) of this section, housing expenses include rent, the fair rental value of housing provided in kind by the employer, utilities (other than telephone charges), real and personal property insurance, occupancy taxes not described in paragraph (b)(2)(v) of this section, nonrefundable fees paid for securing a leasehold, rental of furniture and accessories, household repairs, and residential parking.
(2) Excluded expenses. Housing expenses do not include:
(i) The cost of house purchase, improvements, and other costs that are capital expenditures;
(ii) The cost of purchased furniture or accessories or domestic labor (maids, gardeners, etc.);
(iii) Amortized payments of principal with respect to an evidence of indebtedness secured by a mortgage on the taxpayer's housing;
(iv) Depreciation of housing owned by the taxpayer, or amortization or depreciation of capital improvements made to housing leased by the taxpayer;
(v) Interest and taxes deductible under section 163 or 164 or other amounts deductible under section 216(a) (relating to deduction of interest and taxes by cooperative housing corporation tenant);
(vi) The expenses of more than one foreign household except as provided in paragraph (b)(5) of this section;
(vii) Expenses excluded from gross income under section 119;
(viii) Expenses claimed as deductible moving expenses under section 217; or
(ix) The cost of a pay television subscription.
(3) Limitation. Housing expenses are taken into account for purposes of this section only to the extent attributable to housing for portions of the taxable year within the period during which the individual satisfies the requirements of § 1.911-2(a). Housing expenses are not taken into account for the period during which the value of the individual's housing is excluded from gross income under section 119, unless the individual maintains a second foreign household described in paragraph (b)(5) of this section. If an individual maintains two foreign households, only expenses incurred with respect to the abode which bears the closest relationship, not necessarily geographic, with respect to the individual's tax home shall be taken into account, unless one of the households is a second foreign household.
(4) Reasonableness. An amount paid for housing shall not be treated as reasonable, for purposes of paragraph (a) of this section, to the extent that the expense is lavish or extravagant under the circumstances.
(5) Expenses of a second foreign household—(i) In general. The term “second foreign household” means a separate abode maintained by an individual outside of the U.S. for his or her spouse or dependents (who, if minors, are in the individual's legal custody or the joint custody of the individual and the individual's spouse) at a place other than the tax home of the individual because of adverse living conditions at the individual's tax home. If an individual maintains a second foreign household the expenses of the second foreign household may be included in the individual's housing expenses under paragraph (b)(1) of this section. Under no circumstances shall an individual be considered to maintain more than one second foreign household at the same time.
(ii) Adverse living conditions. Solely for purposes of paragraph (b)(5)(i) of this section, adverse living conditions are living conditions which are dangerous, unhealthful, or otherwise adverse. Adverse living conditions include a state of warfare or civil insurrection in the general area of the individual's tax home. Adverse living conditions exist if the individual resides on the business premises of the employer for the convenience of the employer and, because of the nature of the business (for example, a construction site or drilling rig), it is not feasible for the employer to provide housing for the individual's spouse or dependents. The criteria used by the Department of State in granting a separate maintenance allowance are relevant, but not determinative, for purposes of determining whether a separate household is provided because of adverse living conditions.
(c) Base housing amount—(1) In general. The base housing amount is equal to the product of 16 percent of the annual salary of an employee of the United States who is compensated at a rate equal to the annual salary rate paid for step 1 of grade GS-14, multiplied by the following fraction:
For purposes of the above fraction, the number of qualifying days is determined in accordance with § 1.911-3(d)(3).
(2) Annual salary of step 1 of grade GS-14. The annual salary rate for a step 1 of grade GS-14 is determined on January first of the calendar year in which the individual's taxable year begins.
(d) Housing cost amount exclusion—(1) Limitation. A qualified individual who has elected to exclude his or her housing cost amount may only exclude the lesser of the full amount of either the individual's housing cost amount attributable to employer provided amounts or the individual's foreign earned income for the taxable year. A qualified individual who elects to exclude his or her housing cost amount may not claim less than the full amount of the housing cost exclusion determined under this paragraph.
(2) Employer provided amounts. For purposes of this section, the term “employer provided amounts” means any amounts paid or incurred on behalf of the individual by the individual's employer which are foreign earned income included in the individual's gross income for the taxable year (without regard to section 911). Employer provided amounts include, but are not limited to, the following amounts: Any salary paid by the employer to the employee; any reimbursement paid by the employer to the employee for housing expenses, educational expenses for the individual's dependents, or as part of a tax equalization plan; the fair market value of compensation provided in kind (including lodging, unless excluded under section 119, relating to meals and lodging furnished for the convenience of the employer); and any amount paid by the employer to any third party on behalf of the employee. An individual will only have earnings that are not employer provided amounts if the individual has earnings from self-employment.
(3) Housing cost amount attributable to employer provided amounts. For the purpose of determining what portion of the housing cost amount is excludable and what portion is deductible the following rules apply. If the individual has no income from self-employment, then the entire housing cost amount is attributable to employer provided amounts and is, therefore, excludable to the extent of the limitation provided in paragraph (d)(1) of this section. If the individual only has income from self-employment, then the entire housing cost amount is attributable to non-employer provided amounts and is, therefore, deductible to the extent of the limitation provided in paragraph (e) of this section. In all other instances, the housing cost amount attributable to employer provided amounts shall be determined by multiplying the housing cost amount by the following fraction: Employer provided amounts over foreign earned income for the taxable year. The housing cost amount attributable to non-employer provided amounts shall be determined by subtracting the portion of the housing cost amount attributable to employer provided amounts from the total housing cost amount.
(e) Housing cost amount deduction—(1) In general. If a portion of the individual's housing cost amount is determined under paragraph (d)(3) of this section to be attributable to non-employer provided amounts, the individual may deduct that amount from gross income for the taxable year but only to the extent of the individual's foreign earned income (as defined in § 1.911-3) for the taxable year in excess of foreign earned income excluded and the housing cost amount excluded from gross income for the taxable year under § 1.911-3 and this section.
(2) Carryover. If any portion of the individual's housing cost amount deduction is disallowed for the taxable year under paragraph (e)(1) of this section, such portion shall be carried over and treated as a deduction from gross income for the succeeding taxable year (but only for the succeeding taxable year) to the extent of the excess, if any, of:
(i) The amount of foreign earned income for the succeeding taxable year less the foreign earned income and the housing cost amount excluded from gross income under § 1.911-3 and this section for the succeeding taxable year over,
(ii) The portion, if any, of the housing cost amount that is deductible under paragraph (e)(1) of this section for the succeeding taxable year.
(f) Examples. The following examples illustrate the application of this section. In all examples the annual rate for a step 1 of GS-14 as of January first of the calendar year in which the individual's taxable year begins is $39,689.
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Treas. Reg. §1.911-4(a)Definition of housing cost amount.
Definition of housing cost amount. The term “housing cost amount” means an amount equal to the reasonable expenses paid or incurred (as defined in section 7701(a)(25)) during the taxable year by or on behalf of the individual attributable to housing in a foreign country for the individual and any spouse or dependents who reside with the individual (or live in a second foreign household described in paragraph (b)(5) of this section) less the base housing amount as defined in paragraph (c) of this section. The housing cost amount must be reduced by the amount of any military or section 912 allowance or similar allowance excludable from gross income that is intended to compensate the individual or the individual's spouse in whole or in part for the expenses of housing during the same period for which the individual claims a housing cost amount exclusion or deduction.
-
Treas. Reg. §1.911-4(b)Housing expenses—(1) Included expenses.
Housing expenses—(1) Included expenses. For purposes of paragraph (a) of this section, housing expenses include rent, the fair rental value of housing provided in kind by the employer, utilities (other than telephone charges), real and personal property insurance, occupancy taxes not described in paragraph (b)(2)(v) of this section, nonrefundable fees paid for securing a leasehold, rental of furniture and accessories, household repairs, and residential parking.
(2) Excluded expenses. Housing expenses do not include:
-
Treas. Reg. §1.911-4(c)Base housing amount—(1) In general.
Base housing amount—(1) In general. The base housing amount is equal to the product of 16 percent of the annual salary of an employee of the United States who is compensated at a rate equal to the annual salary rate paid for step 1 of grade GS-14, multiplied by the following fraction:
For purposes of the above fraction, the number of qualifying days is determined in accordance with § 1.911-3(d)(3).
(2) Annual salary of step 1 of grade GS-14. The annual salary rate for a step 1 of grade GS-14 is determined on January first of the calendar year in which the individual's taxable year begins.
255 Citing Cases
Like similarly situated employees, he was asked to sign (and he and his wife allegedly did sign) a Closing Agreement with the Internal Revenue Service (IRS or respondent) waiving the right to claim, with respect to wages earned at the base, the “foreign earned income exclusion” (FEIE) provided by section 911.1 In exchange Australia agreed that no Australian income tax would be withheld from his wages.
Severance, which was detailed on Schedule C, Profit or Loss From Business, attached to the 2010 joint return; unemployment compensation of $26,503 attributable to petitioner; and an exclusion of $91,500 of foreign earned income under section 911 attributable to Mr.
citizens of the rights awarded to them by the Congressional enacted [sic] IRC § 911.” Article 9 of Pine Gap I has no apparent effect on U.S.
§ 36B(d)(2)(A); see also Treas.
Section 911(d)(6) disallows a deduction to the extent expenses are allocable to amounts excluded from income pursuant to section 911(a) (foreign earned income exclusion).
Smith’s position, therefore, required an analysis of how the 1982 Treaty interacts with the Pine Gap Agreements and Australian law — including, for example, whether the 1982 Treaty might be viewed as overruling the Pine Gap Agreements, see Owner-Operator Indep.
itions to tax under section 6651(a)(1) and (2). Petitioner timely filed a Petition arguing that he qualifies for the foreign earned income exclusion because he is a resident of Saudi Arabia and otherwise meets the bona fide residence requirements of section 911. After filing his Petition, petitioner provided respondent with a Form W–2, Wage and Tax Statement, showing $109,024 in taxable wages, a Form 1099–R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insura
The Lamprechts understated their gross income for 2006 and 2007 by omitting all foreign source income from 25 [*25] their tax returns, and accordingly they claimed a tax benefit, either directly by maintaining implicitly that they were entitled to the section 911 foreign earned income exclusion (discussed below), or indirectly by understating their tax liabilities and receiving tax savings through underpayments.
Likewise, we hold that petitioner's principal place ofbusiness, and thus his tax home, was in San Jose, his home base and the location ofhis gateway travel airport, SJC.
36B(d)(2)(A); see also sec.
- 4 - [*4] earned income exclusion ("FEIE") ofsection 911 (we hold that he was not); (2) whether the Bellwoods were entitled to deduct unreimbursed employment expenses for 2013, 2014, or 2015 (we hold that they were not); and (3) whether the Bellwoods are liable for accuracy-related penalties for their 2013, 2014, and 2015 returns (we hold that the Bellwoods are l
After concessions, the issues for decision are whether petitioner's income may be excluded from gross income under section 911 and whether he is liable for the accuracy-relatedpenalty and the late-filing addition to tax.¹ Background Some ofthe facts have been stipulated, and the stipulated facts are incorporated in our findings by this reference.
We hold she is not eligible.
at 722. The amendment sought to address the situation in which a cooperative wished to make cash payments to patrons at some point before the time the cooperative was able to determine its net earnings. S. Rept. No. 91-552, at 293 (1969), 1969-3 C.B. 423, 609. Such payments would generally not qualify as patronage dividends becau
6662(a) 2004 $33,458 $8,364.50 $6,691.60 2005 42,053 10,513.25 8,410.60 2006 14,143 2,981.50 2,828.60 After concessions, the issues for decision are whether petitioners are eligible to exclude from their taxable income wages earned in Iraq and in Germany during those years pursuant to section 911, whether they are liable for the late-filing additions to tax, and whether they are liable for the substantial understatement penalties.
Petitioner attached to his returns Forms 2555, Foreign Earned Income, on which he claimed, pursuant to section 911, exclusions of$67,690 and $100,800 for 2014 and 2015, respectively.
We disagree with petitioner's contentions.
under principles oftax law, not bankruptcy law. Walstatter v. Commissioner, T.C. Memo. 1992-152, 1992 Tax Ct. Memo LEXIS 170, at *24; s_ee also Arnett v. Commissioner, 126 T.C. 89, 95 (2006) (holding that Antarctica is not a "foreign country" under sec. 911 even though it is a "foreign country" for purposes ofthe Federal Tort Claims Act). - 14 - [*14] that the taxpayer acted in good faith with respect to, that portion. Sec. 6664(c)(1). The determination ofwhetherthe taxpayer acted with reasonab
On his 2010 Form 2555 petitioner reported that his residence in Iraq 3Petitioner understood that he could have opted not to have taxes withheld by filing with Triple Canopy Form 673, Statement for Claiming Exemption From Withholding on Foreign Earned Income Eligible for the Exclusion(s) Provided by Section 911, but he chose not to exercise that option.
1.36B-1(e)(2), Income Tax Regs.; see also sec.
Neither section 911 nor the regulations thereunder define "abode". Thus we turn to our caselaw. In prior section 911 cases, we have examined and contrasted a taxpayer's domestic ties (i.e., his familial, economic, and personal ties to the United States) with his ties to the foreign country in which he claims a tax home in order to determine whether his abo
Accordingly, we hold that Mr.
whether section 911 entitles petitioners to exclude from their gross income for the subject years foreign earned income and housing costs of$184,207, $174,632, $177,876, and $140,416, respectively.5 We hold in accordance with 4Petitioners concede that they failed to report the following items for 2006: interest of$789 from the Larkin Family Partnership (LFP), a "small partnership" within the meaning ofsec.
Respondent contends that petitioner is not entitled to a foreign earned income exclusion under section 911 for tax year 2010 SERVED Apr 26 2017 - 2 - [*2] because he failed to make a timely election as required by the governing regulations.¹ We agree with respondent and accordinglywill grant the motion.
whether section 911 entitles petitioners to exclude from their gross income for the subject years foreign earned income and housing costs of$184,207, $174,632, $177,876, and $140,416, respectively.5 We hold in accordance with 4Petitioners concede that they failed to report the following items for 2006: interest of$789 from the Larkin Family Partnership (LFP), a "small partnership" within the meaning ofsec.
We hold that he was not.
The SERVED Dec 13 2016 - 2 - issue for decision is whether Curtis Lee Owens (petitioner), a civilian employee of the Red River Army Depot, is entitled to exclude under section 911 income earned while deployed in Kuwait during 2010.
However, pursuant to section 911(b)(1)(B)(ii), the foreign earned income for an individual does not include amounts "paid by the United States or an agency thereofto an employee ofthe United States or an agency thereof".
me from whatever sources derived". The United States employs a worldwide tax system, taxing its citizens on their income regardless ofits geographic sources. There are exceptions to the general rule, such as the foreign earned income exclusion under section 911. However, exemptions and exclusions from taxable income are construed narrowly, and the taxpayers must bring themselves within the clear scope ofthe exclusions. See, e.g., Commissioner v. Jacobson, 336 U.S. 28 (1949). Section 911(a) provi
Gereneser claimed both a section 911 foreign earned income exclusion and a foreign tax SERVED Aug 10 2016 - 2 - [*2] credit.¹ The Commissioner allowed the foreign earned income exclusion but disallowed the foreign tax credit because it would be an impermissible double benefit to exclude income and then claim a credit with respect to that same income.2 As to other non-NATO
We are confident that the Court ofAppeals for the Fifth Circuit would find these cases governed by the reasoning and result ofLemay and Bujol and factually distinguishable from Jones.
We are confident that the Court ofAppeals for the Fifth Circuit would find these cases governed by the reasoning and result ofLemay and Bujol and factually distinguishable from Jones.
Here, however, the issue ofwhether petitioner's 2007 compensation is excludible under section 911(a) was not actually litigated in this Court in the prior case at Dinger v. Commissioner, T.C. Dkt. No. 4060-07. See, e.g., United States v. Int'l Bldg. Co., 345 U.S. 502, 505 (1953) (there was "apro forma acceptance by the Tax Court of an agreement between the parties to settle their controversy for reasons undisclosed"). Therefore, we hold that collateral estoppel does not apply in this case.
-17- [*17] We hold, as we did in Faltesek, that the Secretary's interpretation and implementation ofthe statute is valid, because it reasonably implements Congress's specific grant ofauthority in section 911(d)(9) to prescribe regulations that are necessary and appropriate to carry out the purposes ofthe statute, and
is entitled to exclude from gross income, as "foreign earned income" under section 911(a), the wages he earned while deployed to the North Atlantic Treaty Organization (NATO) mission in Afghanistan.¹ Because we find that petitioner was an employee ofthe United States when performing these services, we hold that section 911(b)(1)(B)(ii) prevents his compensation from being characterized as "foreign earned income." Background This case was submitted fully stipulated under Rule 122.
Respondent argues that petitionerwas confined to the Green Zone when not on missions and prohibited from having any foreign contacts.
citizen and has no foreign earned income taxable under section 911 and related regulations.
, 964 (Ct. Cl. 1963) (American Red Cross is an "instrumentality" ofthe United States) with Rev. Rul. 60-36, 1960-1 C.B. 279 (American Red Cross is not an "agency" ofthe United States for purposes ofexcluding foreign income from taxation under former section 911). None ofthese courts found the term "agency" or "instrumentality" to have a plain meaning, and none ofthem relied on -23- dictionary definitions as a reliable guide to discerning the proper interpretation of these words in context. Petit
- 17 - [*17] Generally, section 911 provides to U.S.
4 (Ct. Cl. 1963) (American Red Cross is an “instrumentality” of the United States), with Rev. Rul. 60-36, 1960-1 C.B. 279 (American Red Cross is not an “agency” of the United States for purposes of excluding foreign income from taxation under former section 911). None of these courts found the term “agency” or “instrumentality” to have a plain meaning, and none of them relied on dictionary definitions as a reliable guide to discerning the proper interpretation of these words in context. Petition
- 9 - [*9] An individual who fails to meet the 330-day physical presence test of section 911(d)(1)(B) shall be treated as a qualified individual ifhe or she is eligible for a waiver ofperiod ofstay in a foreign country pursuant to section 911(d)(4).
The issues for decision are whether all or a portion ofpetitioners' income may be excluded under section 911 and whetherpetitioners are liable for the SERVED MAR 13 2013 - 2 - [*2] accuracy-relatedpenalty.
taxation; (2) whetherpursuant to section 911 she is entitled to a larger foreign earned income exclusion than respondent has allowed; and (3) whetherpursuantto section 901 she is entitled to any amount offoreign tax credit.
6114(a)(a taxpayer claiming that a treaty overrules or modifies a Federal tax law must disclose that position to the Commissioner).
1972) , to support their position that petitioner' s gambling winnings income is income from personal services: Robida addressed "earned income" under section 911 (regarding foreign earned income and taxation of,U.S.
citizen but resident of France, on all or a portion of her income; (2) whether petitioner is entitled to exclude all or a portion of her income under section 911; (3) whether petitioner is entitled to a credit under section 901 for all or a portion of the taxes paid to France; and (4) whether petitioner is liable for the accuracy-related penalty under section 6662.
Section 911, which applies to Mrs . Rogers is an exception to the U .S .. worldwide tax system . Section 911(a) allows~a "qualified individual" .to exclude from gross income "foreign ; earned income" .10 A "qualified individual"'is a U .S . citizen whose tax home is in a foreign country if that individual His a bona fide resident of a foreign count
Section 911 does not. define "employee" . Accordingly, we apply common law rules to determine whether a taxpayer is an employee . See United States v. Si-1k,,331 U.S . 704 (1947) ; Matthews v. Commissioner, 907 F.2d 1173, 1175 (D .C. Cir. 1990), affg. 92 T .C . 351 (1989) ; Weber v . Commissioner, 103 T .C . 378, 386 (1994), affd . 60 F.3d 1104 (4t
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a "foreign country" pursuant to section 911 and the regulations thereunder .
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “foreign country” pursuant to section 911 and the regulations thereunder.
Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a "foreign country" pursuant to section 911 and the regulations thereunder .
While section 911 excludes foreign earned income from gross income under certainl circumstances, section 911 does not apply to self-employment income .
Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a "foreign country" pursuant to section 911 and the regulations thereunder .
Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a "foreign country" pursuant to section 911 and the regulations thereunder .
Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a "foreign country" pursuant to section 911 and the regulations thereunder .
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v . Commissioner, 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) .(Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U .S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is n
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 (d)(1) establishes requirements a taxpayer must meet in order to be considered a qualified individual for purposes of section 911(a) . 26 First, the taxpayer' s "tax home" must have 26 Sec . 911(d)(1) defines the term "qualified individual" as follows : (1) * * * The term "qualified individual" means an individual whose tax home is in a
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Petitioner filed Federal income tax returns for 2002, 2003, and 2004 and attached to them Forms 2555-EZ, Foreign Earned Income Exclusion, claiming that all of his income in those years was foreign earned income excluded from gross income under section 911 for Federal income tax purposes .
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v . Commissioner, 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed: the arguments made by the parties herein regarding section 911 . The U .S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is n
Section 911 In Arnett v . Commissioner, 126 T. C. 89, 91-96 (2006 ) (Arnett I), affd. 473 F. 3d 790 ( 7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
s within the clear scope of the exclusion . Id . III . Section 91 1 In Arnett v. Commissioner, 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U .S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a "foreign country" pursuant to section 911 and the regulations thereunder . Arnett v . Commi
Section 911 In Arnett v . Commissioner, 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U .S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is no
Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “foreign country” pursuant to section 911 and - 4 - the regulations thereunder.
Section 911 In Arnett v . Commissioner, 126 T .C. 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit, to which an appeal of the case herein apparently lies, agreed with our analysis of section
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
rctica. R issued a notice of deficiency for 2000 in which R determined that the income Ps earned during 2000 from working in Antarctica is not excludable from income. Held: The income Ps earned in Antarctica is not excludable from income pursuant to I.R.C. sec. 911. Arnett v. Commissioner, 126 T.C. 89 (2006), affd. 473 F.3d 790 (7th Cir. 2007), followed. - 2 - Larry D. Harvey, for petitioners. Randall L. Preheim, for respondent. MEMORANDUM OPINION VASQUEZ, Judge: This case is before the Court on
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v . Commissioner, 126 T .C. 89, 1-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnet II), we addressed the arguments made by the parties herein rega ding section 911 . The U .S . Court of Appeals for the Seventh Cir uit agreed with our analysis of section 911 and affirmed our con c usion that Antarctica is not
Section 911 In Arnett v . Commissioner , 126 T.C. 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit, to which an appeal of the case herein apparently lies, agreed with our analysis of section
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v . Commissioner, 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F.3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not
within the clear scope of the exclusion . Id . III . Section 91 1 In Arnett v . Commissioner , 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a "foreign country" pursuant to section 911 and the regulations thereunder . Arnett v . Commis
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
within the clear scope of the exclusion . Id . III . Section 91 1 In Arnett v . Commissioner , 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a "foreign country" pursuant to section 911 and the regulations thereunder . Arnett v . Commis
Section 911 In Arnett v . Commissioner , 126 T .C . 89, 91-96 (2006) (Arnett I), affd. 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
6662 Penalty 2001 $27,555 $5,511 2002 6, 790 1,358 IER` ED FEB 2 2 2007 J - 2 - After concessions by the parties, the primary issue for decision is whether petitioners qualify for the foreign earned income exclusion of section 911 (hereinafter sometimes "exclusion") under the two conjunctive requirements thereof .
Section 911 In Arnett v . Commissioner , 126 T .C . 89, 91-96 (2006) (Arnett I), affd. 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U .S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is no
Section 911 In Arnett v . Commissioner, 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v . Commissioner, 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U .S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is no
Section 911 In Arnett v . Commissioner , 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is no
Section 911 In Arnett v . Commissioner, 126 T .C . 89, 91-96 (2006 ) (Arnett I), affd. 473 F .3d 790 ( 7th Cir . 2007 ) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is n
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
within the clear scope of the exclusion . Id . III . Section 91 1 In Arnett v . Commissioner, 126 T .C . 89, 91-96 (2006) (Arnett I), affd. 473 F .3d 790 (7th Cir . 2007) (Arnett II ), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion tha t Antarctica is not a "foreign country" pursuant to section 1,911 and the regulations thereunder . Arnett v . Com
Section 911 In Arnett v . Commissioner , 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U .S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is n
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v . Commissioner , 126 T.C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U .S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is no
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v . Commissioner, 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit, to which an appeal of the case herein apparently lies, agreed with our analysis of section 911 an
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v . Commissioner , 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U .S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is no
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v . Commissioner, 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U .S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is no
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
Section 911 In Arnett v. Commissioner, 126 T.C. 89, 91-96 (2006) (Arnett I), affd. 473 F.3d 790 (7th Cir. 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911. The U.S. Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is not a “fore
The treaty regarding Antarctica is still in effect, and therefore Antarctica remains a sovereignless region.3 Petitioner nevertheless contends that Martin has been overruled and superseded by the holding of the Supreme Court of the United States in Smith v.
Citizens, directly leads to §911 of Title 26 USC, which has to do with U.S.
Hargrove are not entitled to an exclusion under section 911 of $44,850 in 2000 and $31,861 in 2001, determined that the correct amount of tax is $16,533 for 2000 and $12,620 for 2001, and determined that Mr.
territory, such as Johnston Island, that they may not claim the exclusion for personal service income earned in a U.S. possession under sec- tion 931. They also cannot exclude this income as "foreign earned income" under the exclusion provision in section 911. At one time Johnston Island was listed as a U.S. pos- session for purposes of the possessions exclusion under 2Throughout 1999 and 2001, Mr. Smith worked on Johnston Island for Washington Group International, formerly Raytheon. For conven
Hargrove are not entitled to an exclusion under section 911 of $44,850 in 2000 and $31,861 in 2001, determined that the correct amount of tax is $16,533 for 2000 and $12,620 for 2001, and determined that Mr.
After a concession, the sole issue for decision is whether section 911 entitles petitioner to exclude from gross income the wage income he earned in Antarctica in 2001.
ence to that section;8 and (3) petitioners were not entitled to exclude from gross income the value of lodging under section 119. Petitioners do not dispute that they signed the closing agreement and that they agreed not to claim an exclusion under section 911. Petitioners contend that they did not claim an exclusion under section 911, but that they claimed an exclusion under section 912, which was not prohibited in the closing agreement. Moreover, petitioners contend that they claimed exclusion
As may be seen supra note 3, the revision of the dependent taxpayer rule continues the term “earned income”, but eliminates the reference to section 911 and does not provide any replacement definition.
2001), and held that Johnston Island does not constitute a foreign country for purposes of section 911 and does not constitute a specified possession for purposes of section 931.3 Therefore, the District Court, in spite of the conflicting regulation, which listed Johnston Island as a possession, concluded that wages earned on Johnston Island constituted taxable income.
The sole issue for decision is whether petitioner may exclude from gross income under either section 931 or section 911 compensation he earned for personal services he performed in 1997 - 2 - on Johnston Island, a U.S.
s of Practice and Procedure. - 2 - The issues for decision are: (1) Are the wages that petitioner received during 1998 while he was residing and working in Johnston Island excludable from petitioner’s gross income for that year under section 931 or section 911? We hold that they are not. (2) Is petitioner liable for the year at issue for the accuracy-related penalty under section 6662(a)? We hold that he is. FINDINGS OF FACT Most of the facts have been stipulated by the parties and are so found.
(Part II) 109. The damages provision was later adopted as section 6673 of the Internal Revenue Code of 1954. In 1989, Congress added section 6673(a)(2) to provide for an award of costs, expenses, and attorneys’ fees against an attorney where an attorney, including an attorney appearing on behalf of the Commissioner, has unreasona
island. Held: Ps may not exclude from their gross income under sec. 931, I.R.C., the compensation they earned on Johnston Island because that island is not a specified possession as defined in sec. 931(c), I.R.C. Alternatively, Ps claim that, under sec. 911, I.R.C., and sec. 1.931-1(b)(2), Income Tax Regs., they can exclude from gross income up to $70,000 of the 1Cases of the following petitioners are consolidated herewith: Eric N. Umbach, docket No. 12348-99; and Robert J. Haessly, docket No.
An individual’s tax home for purposes of applying section 911 is the same as an individual’s tax home for purposes of section 162(a)(2), relating to traveling expenses while away from home.
Petitioner contends that income is defined only by section 911 and the regulations under section 861 and that his receipts are excluded from those definitions.
island. Held: Ps may not exclude from their gross income under sec. 931, I.R.C., the compensation they earned on Johnston Island because that island is not a specified possession as defined in sec. 931(c), I.R.C. Alternatively, Ps claim that, under sec. 911, I.R.C., and sec. 1.931-1(b)(2), Income Tax Regs., they can exclude from gross income up to $70,000 of the 1Cases of the following petitioners are consolidated herewith: Eric N. Umbach, docket No. 12348-99; and Robert J. Haessly, docket No.
Section 6673 Section 911 of the Revenue Act of 1926, ch.
Section 6673 Section 911 of the Revenue Act of 1926, ch.
Section 6673 Section 911 of the Revenue Act of 1926, ch.
Section 6673 Section 911 of the Revenue Act of 1926, ch.
In California, the Ninth Circuit held that the claim filing requirements of California Government Code section 911.2, which required that all claims for money or damages for which the State is liable be presented within 1 year of the date that the claim arose, was applicable to the Federal Government.
territories and possessions; (3) income earned within the 50 States is exempt from tax under section 911 as foreign earned income;7 and (4) respondent has no authority delegated by the Secretary of Treasury to assess and collect subtitle A tax in the 50 States.
asonable cause. Second, petitioner claims that he based his decision not to file on advice he received from the U.S. consulate in Hong Kong that a return was not required if his income was less than 18Subject to certain limitations and restrictions, sec. 911 allows a citizen or resident of the United States living abroad to exclude from gross income up to $70,000 in foreign earned income. Sec. 911(a)(1), (b)(2)(A). - 25 - $70,000. However, petitioner admits that he did not disclose the fact that
Department of State, Office of Foreign Buildings Operations (FBO), qualifies for the section 911 foreign earned income exclusion.
ndent Docket No. 5731-93. Filed October 12, 1995. Pursuant to the U.S. Code, U.S. employees may be either detailed or transferred to international organizations for foreign service. P was transferred from the U.S. Army to NATO. For years after 1981, sec. 911, I.R.C., was amended to exclude from the definition of foreign earned income amounts "paid by the United States or an agency thereof to an employee of the United States or an agency thereof". Held: P was an employee of NATO, and not an emplo