                         T.C. Summary Opinion 2016-83



                         UNITED STATES TAX COURT



       CURTIS LEE OWENS AND MELEIH ANN OWENS, Petitioners v.
         COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 8360-15S.                          Filed December 13, 2016.



      Curtis Lee Owens and Meleih Ann Owens, pro sese.

      Vivian Bodey and Peter Tran (student), for respondent.



                              SUMMARY OPINION


      COHEN, Judge: This case was heard pursuant to the provisions of section

7463 of the Internal Revenue Code in effect when the petition was filed. Pursuant

to section 7463(b), the decision to be entered is not reviewable by any other court,

and this opinion shall not be treated as precedent for any other case. Respondent

determined a $15,255 deficiency in petitioners’ Federal income tax for 2010. The
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issue for decision is whether Curtis Lee Owens (petitioner), a civilian employee of

the Red River Army Depot, is entitled to exclude under section 911 income earned

while deployed in Kuwait during 2010. Unless otherwise indicated, all section

references are to the Internal Revenue Code in effect for the year at issue.

                                    Background

      The material facts have been stipulated, and the stipulated facts are

incorporated in our findings by this reference. Petitioners maintained a permanent

residence in Texas in 2010, and they resided in Texas when they filed their

petition.

      Before and during 2010, petitioner was employed by Red River Army Depot

(RRAD) as a heavy mobile equipment mechanic leader or supervisor. RRAD is in

Texas and is part of the Army Tank-Automotive and Armaments Command, which

is an agency of the U.S. Department of the Army (Army). Petitioner is a U.S.

citizen. He was not a member of the military in 2010.

      During 2010, petitioner spent approximately 335 days in Kuwait performing

services for the U.S. Department of Defense. He worked as a mechanic ensuring

that military trucks were up to code.

      While in Kuwait, petitioner resided in “government quarters” provided by

his employer. The Army provided the equipment and workspace for petitioner to
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use in performing his work in Kuwait and controlled the manner and means by

which he performed his work.

      Petitioner’s compensation was paid and reported by the Defense Finance

and Accounting Service, which is an agency of the Department of Defense

providing payment and accounting services for military and civilian employees.

Petitioner was paid under the Federal Wage System and participated in the Federal

Employees Retirement System. Social Security contributions and income tax were

withheld from his wages.

      On their Federal income tax return for 2010, petitioners claimed a $91,500

foreign earned income exclusion under section 911. In doing so, they relied on the

erroneous advice of their tax return preparer, Sam Grubbs. In the notice of

deficiency on which this case is based, respondent disallowed the exclusion and

made resulting computational adjustments.

                                    Discussion

      Section 911(a) provides for an election by which a “qualified individual”

citizen of the United States living abroad may exclude from taxable income a

portion of the foreign earned income of the individual. However, section

911(b)(1)(B)(ii) specifically excludes from “foreign earned income” amounts

“paid by the United States or an agency thereof to an employee of the United
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States or an agency thereof ”. Although petitioner’s time in Kuwait was sufficient

for exclusion of a portion of his earnings under section 911, the circumstances of

his employment preclude his qualification for the exclusion.

      The stipulated facts and petitioner’s testimony leave no doubt that petitioner

was an employee of an agency of the United States during 2010. At the time of

trial, petitioner acknowledged the error in claiming the exclusion but explained

that he was advised by his tax return preparer that because he was a civilian

employee he qualified for the exclusion. That advice is inexplicable in view of the

express wording of the statute. In any event, because no penalty was determined

in the notice of deficiency the clearly erroneous advice is not material to our

determination.

      To reflect the foregoing,


                                                 Decision will be entered

                                           for respondent.
