Filed September 18, 2017, the Tax Court ruled in Linde V. Commissioner, TCM 2017-180, that determination as to whether or not the Tax Home of an American civilian contractor working for the DoD for other than limited durations, is deemed to be in a foreign country for purposes of qualifying to exclude income pursuant to Internal Revenue Code Section 911 if they qualify under the “physical presence test”. Without going into the details of the case in this posting, Americans who resided outside the United States and met the 330/365 day PP test may be able to claim the foreign earned income exclusion, even if they worked in countries such as Iraq or Afghanistan. For those who have otherwise qualified for the exclusion but filed without claiming it (care must be taken as to whether or not it is deemed that the taxpayer chose to “opt out” of the exclusion or if their return was recently audited or presently being audited by the IRS, they need to revisit their open tax returns to see if they meet the criteria of this Tax Court decision.

In TCM 2017-180 the judge ruled that in determining whether or not the taxpayer’s “abode” is in the United States, all facts and circumstances need to be scrutinized. According to Judge Vasquez, “Considering the unique facts and circumstances of this case, including Mr. Linde’s continuous employment in Iraq up to the date of trial, we find that Mr. Linde’s ties to Iraq were stronger than his ties to the United States during the years in issue. We therefore hold that Mr. Linde’s abode was not in the United States and that his tax home was in Iraq”