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Checkpoint Contents Federal Library Federal Editorial Materials Federal Tax Coordinator 2d Chapter O Foreign Income O-1200 Qualified

Individuals Under the Bona Fide Foreign Residence and the Foreign Physical Presence Tests. O-1203 U.S. abode.

Federal Tax Coordinator 2d

O-1203. U.S. abode.

The exact definition of abode depends on the context in which it is used. However, it doesn't mean one's principal place of business. Thus, abode has a domestic rather than a vocational meaning and stands in contrast to the definition of tax home under Code Sec. 162(a)(2). 14 An individual's temporary presence in the U.S. while he maintains a foreign tax home doesn't necessarily mean that he has a U.S. abode during that time. Maintenance of a U.S. dwelling by an individual, whether or not that dwelling is used by the individual's spouse and dependents, doesn't necessarily mean that the individual has a U.S. abode. 15 In the following cases the taxpayers weren't allowed to exclude foreign earned because they maintained a U.S. abode: ... Oil rig workers who alternated 28-day work periods on a rig off the coast of country F and 28-day rest periods with their families in state S did not have a foreign tax home because their abode was in the U.S., although their principal place of business was in a foreign country. The workers maintained strong economic, financial and personal ties to state S, and had only transitory contacts with the foreign country. 16 ... Oil rig worker who alternated 28-day work periods on rigs off the coasts of foreign countries G and H with 28-day rest periods with his family in the U.S. He spent about 50% of the time with his family in state S, he had state S bank accounts, he had a state S driver's license, and he was registered to vote in state S. In contrast, he had minimal contacts with countries G or H. His work periods were spent on the offshore rig, and his only contact with the mainland was during layovers of a few hours en route to or from the U.S. on each of his rest periods. 17 ... In a case with facts similar to Adams (footnote 17), a worker's abode remained in the U.S. even when he wasn't a registered U.S. voter, 18 or where the layovers on his rest period flights to and from the U.S. were up to one night in length. 19 ... A mechanical technician who alternated six-week on-duty periods in a work compound in country B and four-week off-duty periods with his wife at their residence in state G. He spent about 40% of his time at his residence in state G, maintained a bank account and was registered to vote there. By contrast, the taxpayer had only minimal contact with country B and was required to remain in the compound night and day during the on-duty periods. 20 ... A taxpayer alternated 56-day work periods in country F with 28-day rest periods during which he returned to the U.S. to visit his wife and children. Taxpayer was in country F for 247 days during the year, and while there he lived in a bachelor camp provided by his employer. Although he had a country F driver's license, he kept his U.S. driver's license. He never owned a house, apartment, or other real property in country F. The court determined that his contact with country F society was transitory and minimal. Thus, it wasn't practicable or possible for him to have established an abode in country F. 21 ... An oil rig worker assigned to a mainland rig in country N worked for a 28-day period and was allowed a 28-day rest period. He returned to the U.S. to his home in state S during every rest period. The fact that he was on the mainland rather than on an offshore rig was immaterial. He was in a company compound, isolated from country N life. His family remained in state S, his mail was sent to state S, he maintained his state S driver's license and state S bank accounts. Although he could have brought his family to country N, he elected to have them remain in the U.S. The court stated that he made no attempt to integrate himself into country N society, and that the taxpayer had no intent to build permanent ties with country N. 22 ... In a case with facts similar to those in Eubanks (footnote 22), except that the taxpayer: (1) maintained a checking account in country N (which was used to exchange currency), (2) had a local driver's license, and (3) for the first four months of one of the years in issue returned to his parent's home, where his two children lived while he had a house built. The court stated that his decision not to bring his wife and children to country N assured his eventual return to the U.S. Thus, he never had a long-term

intention to stay in country N as a resident. Instead, his ties to country N were transitory in nature, and he intended to and did maintain strong economic, familial, and personal ties to state S. 23 ... A pipeline construction supervisor stationed in country G, who was on a six-week work period followed by a three-week rest period. His family remained in state S, and he returned home to the U.S. during every rest period. In country G he lived on an isolated installation maintained by his employer. He made no personal contacts outside the workplace. 24 ... An oil company employee who worked in country B for six out of every ten weeks during all of the year. Taxpayer's connection with country B was limited since he was required to live in a guarded and fenced-in compound while he worked there and was required to leave country B when off duty. In addition: (1) his wages were deposited in U.S. currency in a Florida bank account, (2) he owned a car in Florida, (3) he leased an apartment in Florida, (4) he sent his son to a boarding school in Florida, (5) he returned to Florida during most of his off-duty time to spend time with his son, (6) his employer required him to maintain an abode in the U.S., and (7) all his mail was delivered to his Florida apartment. 25 In the following cases the court determined that the taxpayer didn't maintain a U.S. abode: ... An airline pilot who was a bona fide resident of Japan because he maintained his tax home at a hotel room near the Japanese airport out of which he flew. The court said that a purpose of the abode requirement was to limit tax benefits to taxpayers who actually incurred living expenses while living outside the U.S. The court stated that in the oil rig and oil compound worker cases the taxpayers were on duty on oil rigs or in oil field compounds, they slept in employer-provided housing, ate employer-provided meals, and returned home to the U.S. after each work period on employer-provided flights. In addition, their families were not allowed to join them abroad. These taxpayers didn't incur any costs associated with living abroad. Instead, they were basically commuting on a regular basis from their homes in the U.S. However, in the present case the taxpayer paid for his meals and housing while living in Japan, he paid Japanese income taxes as a Japanese resident, and his wife, who elected to remain in Alaska for her own personal career reasons, could have joined him in Japan if she had so desired. Her decision to remain in the U.S. did not affect his intent to make Japan his residence. Thus, his abode was in Japan. The court reached this conclusion despite the fact that he owned the house in Alaska in which his wife lived. 26 IRS disagrees with the Fifth Circuit's opinion in Jones, (footnote 26). IRS believes that under the facts of the case the taxpayer maintained a U.S. abode. Therefore, he couldn't have a tax home abroad. IRS will continue to litigate essentially identical cases outside of the Fifth Circuit. 27 ... In a case with facts similar to those in Jones (footnote 26), even though the taxpayer periodically visited his family at their U.S. residence. These occasional visits didn't cause the U.S. residence to be his abode, because the visits were limited by his flight schedule. Thus, taxpayer's tax home for the foreign earned income exclusion was the base airport in Japan from which his flights originated. 28 For the penalty for improper court activities assessed on an oil rig worker who files a petition to exclude foreign earned income without meeting all of the tests for exclusion, see V-2600 et seq.

Bujol, Robert C., (1987) TC Memo 1987-230, PH TCM 87230, 53 CCH TCM 762, affd(1988, CA5) 842 F2d 328 (unpublished).

Reg 1.911-2(b).

Bujol, Robert C., (1987) TC Memo 1987-230, PH TCM 87230, 53 CCH TCM 762, affd(1988, CA5) 842 F2d 328 (unpublished) ; Lemay, John T., (1987) TC Memo 1987-256, PH TCM 87256, 53 CCH TCM 862, affd(1988, CA5) 61 AFTR 2d 88-667, 837 F2d 681, 88-1 USTC 9182 ; Richard, James R., (1988) TC Memo 1988-217, PH TCM 88217, 55 CCH TCM 864 ; Bassett, Robert E., (1988) TC Memo 1988-218, PH TCM 88218, 55 CCH TCM 867; Howe, Harold E., (1988) TC Memo 1988-277, PH TCM 88277, 55 CCH TCM 1153; Harrington, James Jr., (1989) 93 TC 297 ; Wilson, William R., (1991) TC Memo 1991-491, PH TCM 91491, 62 CCH TCM 900;Musshafen, Paul D., (2009) TC Summary Opinion 2009-115.

Adams, William M. Jr., (1989) TC Memo 1989-91, PH TCM 89091, 56 CCH TCM 1394.

Abrams, Patrick J., (1990) TC Memo 1990-517, PH TCM 90517, 60 CCH TCM 915.

Bosarge, William Henry, (1989) TC Memo 1989-15, PH TCM 89015, 56 CCH TCM 1043.

Chesley, James O., (1988) TC Memo 1988-266, PH TCM 88266, 55 CCH TCM 1112.

Welsh, Lyle D., (1988) TC Memo 1988-512, PH TCM 88512, 56 CCH TCM 560.

Eubanks, John, (1989) TC Memo 1989-233, PH TCM 89233, 57 CCH TCM 391.

Moudy, James R., (1989) TC Memo 1989-216, PH TCM 89216, 57 CCH TCM 327.

Benham, Dean A., (1989) TC Memo 1989-215, PH TCM 89215, 57 CCH TCM 323.

Doyle, James S., (1989) TC Memo 1989-463, PH TCM 89463, 57 CCH TCM 1436.

Jones, George H. v. Com., (1991, CA5) 67 AFTR 2d 91-795, 927 F2d 849, 91-1 USTC 50174, revg & remg(1989) TC Memo 1989616, PH TCM 89616, 58 CCH TCM 689.

Action on Decision 1991-014, 7/3/91.


Cobb, Joe S., (1991) TC Memo 1991-376, PH TCM 91376, 62 CCH TCM 408.
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