DocketNumber: Docket No. 21290-88
Citation Numbers: 61 T.C.M. 2758, 1991 Tax Ct. Memo LEXIS 268, 1991 T.C. Memo. 239
Judges: WELLS
Filed Date: 5/29/1991
Status: Non-Precedential
Modified Date: 11/21/2020
*268
MEMORANDUM FINDINGS OF FACT AND OPINION
Respondent determined deficiencies in petitioner's Federal income tax as follows:
Year | Amount |
1982 | $ 13,356 |
1983 | 15,566 |
1984 | 19,809 |
The issue to be decided in the instant case is whether petitioner is entitled to the foreign earned income exclusion under
FINDINGS OF FACT
Some of the facts have been stipulated for trial pursuant to Rule 91. The stipulation and accompanying exhibits are incorporated in this Opinion by reference.
When he filed *269 his petition in the instant case, petitioner resided in Freeport, Grand Bahama, Bahamas. Petitioner is a United States citizen.
During the years in issue, petitioner was employed as a flight engineer for The Flying Tiger Line, Inc. (Flying Tiger) and was a member of the Air Line Pilots Association, a union. Petitioner started working in the aviation field in 1946 and was a flight radio operator before becoming a flight engineer. Flying Tiger operates an international air cargo service, and petitioner's primary responsibility for Flying Tiger involved monitoring and operating various aircraft mechanical systems during the course of flight. Petitioner also was required to perform pre-flight and post-flight aircraft inspections.
Petitioner's Flying Tiger "base station," i.e., the place where petitioner's trip assignments for Flying Tiger originated and ended, was John F. Kennedy International Airport (JFK) in New York City. Flying Tiger referred to JFK as petitioner's "domicile." Under the union contract applicable to petitioner, petitioner was provided with a traveling expense allowance based upon duty time away from JFK. The contract also provided that Flying Tiger was responsible*270 for furnishing lodging (and transportation to and from such lodging) to pilots (including flight engineers) while they were at "layover" stations during trip assignments. Petitioner's trip assignments potentially involved stops in five or more cities before return to JFK, and his average trip assignment usually lasted about seven days. Petitioner generally flew two trip assignments per month for ten and a half months out of the year.
Petitioner became a widower in 1965. Between 1976 and 1982, he rented three different apartments in the Bahamas, sharing apartments with a friend who was a pilot. In April 1983, petitioner purchased a condominium in Freeport, Grand Bahama, Bahamas. As of the date of trial, petitioner still owned that condominium and lived there with his second wife, a Danish citizen whom he married in February 1989. The Forms W-2 reporting petitioner's compensation from Flying Tiger for the years in issue listed petitioner as having a Bahamas address and listed Flying Tiger's address as Los Angeles International Airport.
Flying Tiger never imposed any residency requirements on petitioner. The union contract applicable to petitioner did, however, indicate that*271 if a pilot's base, or domicile, was transferred at the request of Flying Tiger, Flying Tiger would pay for the pilot's moving expenses to the new domicile. During the years in issue, Flying Tiger did not service the Bahamas. Petitioner chose to spend time in the Bahamas between flight assignments because he enjoyed the beauty, climate, and peaceful atmosphere of the Bahamas. Petitioner was required to report to JFK for trip assignments one hour prior to departure of his flight. Petitioner traveled to JFK on passenger airlines from Freeport, receiving a 75 percent discount on ticket prices as an airline personnel privilege. Most of petitioner's flights for Flying Tiger departed from JFK around midnight. However, when petitioner had a morning departure from JFK, he would arrive in New York the evening before and stay at a hotel close to the airport. Flying Tiger did not pay for such overnight accommodations in New York.
During the years in issue, petitioner owned a house in East Meadows, New York (a suburb of New York City), in which his adult daughter lived. Petitioner previously had occupied that house, which was completely paid for. Petitioner also maintained a post office*272 box address at JFK and generally had correspondence regarding his investments sent to his JFK address because he felt that the mail service in the United States was more reliable than in the Bahamas. He received mail from Flying Tiger in the "crew" mail box at JFK. Petitioner did not maintain a mailing address at any airport other than JFK.
In order to maintain his license as a flight engineer, petitioner was required to undergo FAA physical examinations. He used a doctor located in the vicinity of JFK during the years in issue for those examinations. Flying Tiger also required petitioner to attend annual flight training sessions; those sessions were held in Los Angeles. Petitioner's tax returns for the years in issue were prepared by an accounting firm located in the JFK vicinity; his investment broker was also located in New York. During the years in issue, in addition to maintaining a checking account in the Bahamas, petitioner maintained savings accounts, checking accounts, mutual fund accounts, money market accounts, and certificates of deposit with banks and investment houses located in the New York City area.
In his returns for the years in issue, petitioner reported*273 his compensation from Flying Tiger as foreign earned income on Form 2555, listing his "tax home" as Freeport, Grand Bahama, Bahamas. The Bahamas did not impose an income tax during the years in issue.
OPINION
The foreign earned income exclusion of (A) 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 (B) 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.
Petitioner claims that he was a qualified individual during the years in issue pursuant to
The definition of "tax home" is contained in (3) Tax Home. -- The term "tax home" means, with respect to any individual, such individual's home for purposes of the term "tax home" has the same meaning which it has for purposes of
Petitioner does not argue that his regular or principal place of*275 business was in the Bahamas; he freely admits that Flying Tiger did not service the Bahamas and that he had no business purpose for living there. Petitioner, however, argues that the term "tax home" generally should be construed to refer to one's place of residence, or dwelling place, and that, under such construction, the Bahamas qualifies as his tax home.
Essentially, petitioner's argument is that the general rule for determining "tax home" set forth in
Petitioner directs our attention to two Second Circuit opinions indicating that "home," for purposes of
We decline petitioner's invitation to apply the Second Circuit's definition of "home" in the instant case. As we have found in the findings of fact above, petitioner resided in the Bahamas at the time he filed his petition in the instant case. See section 7482(b). Our finding was based on petitioner's testimony, the statement of residence in his petition, and his consistent assertions on brief. In his reply brief, moreover, petitioner states that the instant case is appealable to the District of Columbia Circuit and asserts that such Circuit has never ruled on the issue of whether "home" for purposes of
*279 As an alternative argument, petitioner asserts that, even if "tax home"
In his reply brief, petitioner attempts to distinguish
Petitioner also argues that
Petitioner finally argues that legislative history of The Congress was concerned with the increasing competitive pressures that American businesses faced abroad. The Congress decided that in view of the nation's continuing trade deficits, it is important to allow Americans working overseas to contribute to the effort to keep American business competitive. The Congress believed that the tax burdens imposed on these individuals made it more expensive for U.S. businesses to * * * Accordingly, the Congress changed the tax law to
Thus, Congress was concerned with the treatment of Americans
Because petitioner failed to establish that his tax home was outside the United States, we need not consider his argument with respect to residency, or respondent's argument concerning the source of petitioner's income. For the foregoing reasons, we hold for respondent.
1. Unless otherwise indicated, all section references are to the Internal Revenue Code as amended and in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.↩
2. In an unpublished opinion,
3. Staff of J. Comm. on Taxation, General Explanation of the Economic Recovery Tax Act of 1981 at 43 (J. Comm. Print 1981).↩
Edward W. And Leona J. Andrews v. Commissioner of Internal ... , 931 F.2d 132 ( 1991 )
Jack E. Golsen and Sylvia H. Golsen v. Commissioner of ... , 445 F.2d 985 ( 1971 )
A. J. Michel, Jr. And Raymonde A. Michel v. Commissioner of ... , 629 F.2d 1071 ( 1980 )
Robert F. Six and Ethel Merman Six, Plaintifffs-Appellants ... , 450 F.2d 66 ( 1971 )
Francis J. Markey and Hazel L. Markey v. Commissioner of ... , 490 F.2d 1249 ( 1974 )
Robert Rosenspan v. United States , 438 F.2d 905 ( 1971 )
Dale W. Folkman and Judy A. Folkman v. United States of ... , 615 F.2d 493 ( 1980 )
Lee E. Coombs and Judy B. Coombs v. Commissioner of ... , 608 F.2d 1269 ( 1979 )
Nester and Lavain M. Ellwein v. United States of America, ... , 778 F.2d 506 ( 1985 )
York v. Commissioner of Internal Revenue , 160 F.2d 385 ( 1947 )
Commissioner v. Flowers , 66 S. Ct. 250 ( 1946 )
Peurifoy v. Commissioner , 79 S. Ct. 104 ( 1958 )