Originally Posted by
Typhoonpilot
It's not a claim. I know three pilots personally who have had that specific audit from the IRS.
Any pilot who files for the foreign earned income exclusion would be well advised to keep thorough records of all their flights (including any flight path maps) to be able to record, to the minute, their percentage of time in/over international waters. The IRS will want proof and they place the burden on you, the taxpayer, to prove your exact percentage of work time in international airspace. When you include ground duties, etc the actual percentage can be quite small.
As a result of those ongoing audits I actively bid to fly trips that kept me over land most of the time and kept all the flight path maps to prove it.
Typhoonpilot
Expats are an easy target. Politicians from both parties can make us out to be the bad guys, and for the most part they do not have to answer to us. Many of the laws tax laws targeting expats have very low overhead cost to the US government for implementation but according to CBO analysis have the potential for significant windfall. So these laws are often supported on a bi-partisan basis which means the chance for repealing them is extremely small. Also expats are the only group who has seen an increase in IRS audits in the past few years, so not only are politicians focusing on expats, the IRS is as well.
So again the point is made, if you work overseas, or are considering it, make sure you are 100% tax compliant (or if you have a second passport, use that for your overseas work so if the IRS takes your U.S. passport you can at least still work).