McCain v. Commissioner
United States Tax Court
In 1979, petitioner was employed in the Panama Canal Zone by the Panama Canal Co. until Sept. 30 and thereafter by the Panama Canal Commission. Held, petitioner is not entitled to either (1) deductions under sec. 913, I.R.C. 1954, for certain foreign living expenses or (2) a foreign earned income exclusion under sec. 911, I.R.C. 1954, because his only income consisted of wages received from "an agency of the United States."
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In 1979, petitioner was employed in the Panama Canal Zone by the Panama Canal Co. until Sept. 30 and thereafter by the Panama Canal Commission. Held, petitioner is not entitled to either (1) deductions under sec. 913, I.R.C. 1954, for certain foreign living expenses or (2) a foreign earned income exclusion under sec. 911, I.R.C. 1954, because his only income consisted of wages received from "an agency of the United States." Held, further, the 1979 Panama Canal Treaty and its implementing agreement, T.I.A.S. 10030 and 10031, do not exempt petitioner from U.S. taxation on the wages he received…
1Opinion of the Court
Featherston, Judge:
Respondent determined a deficiency in the amount of $3,570.16 in petitioner’s Federal income tax for 1979. The issues for decision are the following:(1) Whether petitioner is entitled to either a deduction for certain excess foreign living expenses under section 913,1 or the hardship area foreign earned income exclusion provided by section 911 by virtue of his employment in the Panama Canal Zone during 1979;(2) Whether petitioner is exempt from taxation by the United States of his income earned while employed by the Panama Canal Commission during the period from October 1,…
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