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Forms 2555-EZ for 2001 were silent as to December 2001, and
petitioners made mistakes designating applicable periods on the
Forms 2555-EZ that they initially filed for both 2001 and 2002.
Also, because of the shift to respondent of the burden of
proof, respondent bears the burden to prove that petitioners were
not in a foreign country for the first 19 days of December 2001.
Respondent argues further that for 2001 there are
insufficient facts in evidence to evaluate the requirements of
the foreign earned income exclusion under any applicable period
other than January 1 to December 31, 2001.
We disagree. Petitioners’ log, Myron’s testimony, and the
Navy review of the log establish petitioners’ presence in foreign
countries for the applicable period we utilize for 2001 -- namely
January 7, 2001, to January 6, 2002, as well as for 2002.
Respondent also makes a procedural argument as to why we
should analyze petitioners’ qualifications for the exclusion only
under the applicable periods petitioners indicated on their
initially filed Forms 2555-EZ. Respondent argues that our
utilization of a different applicable period for 2001 to measure
petitioners’ foreign physical presence constitutes a new issue
not raised by the pleadings.
Although we have adjusted petitioners’ applicable period for
2001, the issue remains what it has always been: Do petitioners
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