17
allowances he received as part of the total foreign earned income
reflected on the form. Petitioner included a total figure for
the allowances he received in 1989 and 1990 in the space beside
the description for such allowances and described some allowances
as tax exempt; therefore, he did not include these amounts as
part of the total foreign earned income. Petitioner reflected
the home leave allowance as taxable in the only year it was
received. He reported the NATO education allowances as tax-
exempt in 1 year and as part of his foreign earned income in 2
other years. Petitioner consistently determined that the costs
of living, overseas differential, and the quarters allowances
were foreign earned income for all 3 years. Consequently,
petitioner reported foreign earned income for the years 1988,
1989, and 1990 totaling $96,585.59, $71,241.36, and $78,628.21,
respectively, before applying the limitations of section
911(b)(2)(A). On his returns, petitioner claimed exclusions from
income of $83,486.54, $65,100, and $70,000 for the years 1988,
1989, and 1990, respectively. For each year, petitioner
consistently reported that his employer was the "NATO
International Staff."
Respondent's notice of deficiency determined that petitioner
was not entitled to the total amounts claimed as section 911
exclusions because the salary petitioner received from the DOA
was not qualified foreign earned income.
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011