-13-
and 912. We disagree. Article 7 of the treaty defines the term
“United States civilian employee” for purposes of the treaty and
the related Status of Forces Agreement, not for the Internal
Revenue Code. Moreover, “a civilian employee of the United
States government employed in Australia in connection with the
facility” is not defined in the treaty to include contractors or
their employees. Contractors and their personnel are
specifically referred to as such in several other parts of the
treaty, such as in paragraph (1) of article 9.
Even if we were to find that petitioners were employees of
the U.S. Government, they would still not be entitled to exclude
income under section 912 because they have not shown that they
meet the other requirements of section 912. Petitioners
introduced no evidence concerning any allowances they received,
nor have they shown that they received a cost of living
allowance, foreign area allowance under chapter 9 of title I of
the Foreign Service Act of 1980, section 4 of the Central
Intelligence Agency Act of 1949, as amended, or any other
allowance described in section 912. See sec. 912.
We conclude that Mr. and Mrs. Hargrove and Mr. and Mrs.
Breeding are not entitled to exclude any amounts from income
under section 912.
IV. Accuracy-Related Penalty
We next consider whether petitioners Mr. and Mrs. Hargrove
and Mr. and Mrs. Breeding are liable for accuracy-related
penalties under section 6662(a) for the relevant years.
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