Originally Posted by
southflyer
Watch out guys; the IRS in currently conducting a new drive to tax the foreign income exclusion. They are now targeting the time you spend over "international waters" as taxable, no kidding, as they are now arguing international waters do not constitute a foreign country... so if you are flying long-haul world-wide, well, your exclusion might now be reduced to just a fraction of that 80000plus... and you can thank that to the mavericks out there writing those nifty brown nosing articles on the WSJ and the Chicago Tribune, way to go!
Interesting, that would affect the guys who use the 330 day rule but not those who use the residency rule. That said, any drive like that is doomed to failure since it violates the spirit of the exclusion. The exclusion realistically being for sevices
not rendered because one is not in the USA. Whether one is inside the borders of a foreign country or flying over them is moot, he/she is still not using the services of the U.S. government in any form or fashion.
Typhoonpilot