2013-06-12
Last week the Tax Court published its opinion in Daly v. Commr., TC Memo 2013-147. In this case , the Tax Court held that an individual who spent 106 days in Iraq in 2007 and 93 days in Iraq in 2008 did not qualify for the Code §911 foreign earned income exclusion. Apparently some of the days were also spent in Afghanistan, but the number of days in Afghanistan was not specified.
The Tax Court held that the individual’s abode was in the U.S. and therefore his tax home (for Code §911 purposes) was also in the U.S. Further, even if the individual’s abode and tax home were not in the U.S. the individual did not meet the bona fide residence test or the 330 day physical presence test. Although the individual requested a waiver of the 330 day requirement, neither Iraq nor Afghanistan was included on the list of foreign countries where war, civil unrest, or similar adverse conditions existed for purposes of Code §911(d)(4)(B). See for example Rev. Proc. 2009-22.
It is a bit surprising that this case made it all the way to the Tax Court. One would think that the taxpayer or the taxpayer’s counsel would have concluded beforehand that it would not be fruitful. Apparently a number of arguments advanced by the taxpayer were not even addressed by the Tax Court. The sentence at the end of the case states: “Contentions we have not addressed are irrelevant, moot, or meritless.”