What if you don't make it 330 days?

[robb131]

I work for KBR in Afghanistan, but I'm sure the rules are the same here. I got a job offer in the states but they want me to start sooner than the 330 days I need to fulfill my overseas obligations. I didn't have any taxes taken out of my checks while I was over here, either. I have a wife and 3 kids in the states and don't own a home. I want to take this job but I don't want to have to pay some huge amount of taxes either. Is there any way around it?

[Uno]

I did the same thing in Bahrain. Came back BEFORE 330 days. No taxes taken out...

It sucked, I had to pay ALOT!!! I used a tax attorney and he saved me $500 over what I calculated. But I still had to pay.


My move was not a surprise me because I sort of envisioned it few months ahead of time. So I saved for it. But it still hurts to buy Uncle Sam a new car...along the lines of a nice new mustang...

[raptor78]

I also came back early (7 months into the year)...

I researched extensively and spoke with the IRS directly several times and got names/ID numbers of the people I spoke with...

What I ended up with was as follows:

I was working in Iraq and Kuwait (mainly Iraq) on the KBR project... When I left, I was able to to file for a prorated exemption of the income I earned while there... The exemption was based on the fact the area I was in was a declared combat zone... There was a standing instruction from the embassy for all US citizens to leave the region... Therefore I was able to claim the exemption on account of leaving for personal safety at the request of my embassy...

The IRS published annually, a list of countries and the dates the exemption to the overseas income rules applies to...

May not work for everyone, but if you are creative in wording the reason you returned early on your return, you can likely claim the exemption...

I know KBR definitely does not want people knowing about this liitle loophole, but I made sure it was legit from the IRS before filing it...

[Javabear]

Originally Posted by raptor78

I also came back early (7 months into the year)...

I researched extensively and spoke with the IRS directly several times and got names/ID numbers of the people I spoke with...

What I ended up with was as follows:

I was working in Iraq and Kuwait (mainly Iraq) on the KBR project... When I left, I was able to to file for a prorated exemption of the income I earned while there... The exemption was based on the fact the area I was in was a declared combat zone... There was a standing instruction from the embassy for all US citizens to leave the region... Therefore I was able to claim the exemption on account of leaving for personal safety at the request of my embassy...

The IRS published annually, a list of countries and the dates the exemption to the overseas income rules applies to...

May not work for everyone, but if you are creative in wording the reason you returned early on your return, you can likely claim the exemption...

I know KBR definitely does not want people knowing about this liitle loophole, but I made sure it was legit from the IRS before filing it...

Have you got any publication numbers for any of that? I would love to shoot this all over my base!

[raptor78]

Originally Posted by Javabear

Have you got any publication numbers for any of that? I would love to shoot this all over my base!

Pull publication 54, look at page 14, Waiver of Time Requirements...

The 2006 version of the report mentioned has not been published yet... You will need to call the IRS to ask what the publication number for the country list is... This only applies to civilians, not military members... Its a loophole, might be closed at some point, for the moment, legal way... Basically, claiming I left the the country early for fear of my personal safety, with government support...

The clause is designed for US citizens who happen to be in a region when combat breaks out, but it doesn't limit the use of the clause in this way either... Like I said, loophole... One KBR/ITT and such do not want you to know :)

Best of luck

[Javabear]

Thanks Raptor!!!

[raptor78]

I'll expect my finder's fee to be deposited into my Warka account... 10% of the tax savings from each person you tell :)

Good luck...

[firedawg2000]

WOW, there might actually be an excape root from KBR prison in Iraq. Thanks for the info.

[firedawg2000]

Originally Posted by raptor78

Pull publication 54, look at page 14, Waiver of Time Requirements...

The 2006 version of the report mentioned has not been published yet... You will need to call the IRS to ask what the publication number for the country list is... This only applies to civilians, not military members... Its a loophole, might be closed at some point, for the moment, legal way... Basically, claiming I left the the country early for fear of my personal safety, with government support...

The clause is designed for US citizens who happen to be in a region when combat breaks out, but it doesn't limit the use of the clause in this way either... Like I said, loophole... One KBR/ITT and such do not want you to know :)

Best of luck

I wrote my tax lady on this. She confirmed that it is legit. Here's the reply I received from her:

It took a bit to undestand what you were asking me, but I think it's this: "If I leave Iraq before the 330 days, so I still get the exclusion?" The answer to that question yes. The Waiver of Time Requirements in the publication you mentioned was helpful, and I'm sure that Iraq will be on the 2006 list when the IRS gets around to publishing it.

So, my question to you is, how long do you plan on staying in Iraq? If you are still there when I do your taxes, our argument for exlusion won't be valid and you wouldn't have met the 330 days test. If you're not sure, then we would file without the exclusion and then when the 330 days test is met, or you leave due to adverse conditions, then we can go back and amend your return.

Just keep me posted on your location and plans, and I'll keep you out of trouble with the IRS!

[Iraqfiredawg]

Guys,
There is another rumor floating around in Iraq. Some have been told by their tax people that we all under the combat zone exclusion. That we should file same as the military under publication 3? Anyone else have any info on this one?

[Javabear]

Originally Posted by Iraqfiredawg

Guys,
There is another rumor floating around in Iraq. Some have been told by their tax people that we all under the combat zone exclusion. That we should file same as the military under publication 3? Anyone else have any info on this one?

Publication 3 deals with military folks only. That rumor was floating around here as well for awhile. If you are not now in the military you do not qualify.

[marsmars]

What form do we use to claim the 330 day exemption?

[Stuck@Cedar]

Instructions: http://www.irs.gov/pub/irs-pdf/i2555.pdf

Form: http://www.irs.gov/pub/irs-pdf/f2555.pdf

[apostle]

Originally Posted by Iraqfiredawg

Guys,
There is another rumor floating around in Iraq. Some have been told by their tax people that we all under the combat zone exclusion. That we should file same as the military under publication 3? Anyone else have any info on this one?

By all means you are under that exclusion. I even got a check BACK from the IRS because when my CPA found out I was in Iraq and he filed last year he stamped COMBAT ZONE on the return and the next check that was sent in was returned, for this reason. There is a LOT of information to be found concerning this. I am trying to find the original of an IRS code that I saw that says your spouses are also under the tax ememption! I'll post that when I find it.

Information is power as the saying goes. Here ya go. It's not totally pertinent but this will get you started.

http://www.irs.gov/newsroom/article/...101265,00.html

Q-16: Do the deadline extension provisions apply only to members of the U.S. Armed Forces serving in the combat zone?
A-16: No. Unlike the combat zone military pay exclusion, the deadline extensions also apply to individuals serving in the combat zone in support of the U.S. Armed Forces, such as merchant marines serving aboard vessels under the operational control of the Department of Defense, Red Cross personnel, accredited correspondents, and civilian personnel acting under the direction of the U.S. Armed Forces in support of those forces.

[raptor78]

Originally Posted by apostle

By all means you are under that exclusion. I even got a check BACK from the IRS because when my CPA found out I was in Iraq and he filed last year he stamped COMBAT ZONE on the return and the next check that was sent in was returned, for this reason. There is a LOT of information to be found concerning this. I am trying to find the original of an IRS code that I saw that says your spouses are also under the tax ememption! I'll post that when I find it.

Information is power as the saying goes. Here ya go. It's not totally pertinent but this will get you started.

http://www.irs.gov/newsroom/article/...101265,00.html

Q-16: Do the deadline extension provisions apply only to members of the U.S. Armed Forces serving in the combat zone?
A-16: No. Unlike the combat zone military pay exclusion, the deadline extensions also apply to individuals serving in the combat zone in support of the U.S. Armed Forces, such as merchant marines serving aboard vessels under the operational control of the Department of Defense, Red Cross personnel, accredited correspondents, and civilian personnel acting under the direction of the U.S. Armed Forces in support of those forces.

Realize, this exclusion pertains to the extension of filing, not to the exclusion of income... Income exclusion, under pure combat zone rules, do not apply to civilians, whether on a government contract or not... If you are OFFICIALLY, a government employee, then it may apply (officially a GS-?? rated person)... I realize KBR appoints a GS-?? rating to their people, but it is not an official posting by the government...

The exclusion I mentioned earlier is a loophole and I expect at some point they will close the hole, but until they do, I figure each person wishing to come home early would benefit by using it... Obviously, KBR and other contract firms (ITT) do not want their folks knowing about this and will likely indicate it is false and you can't do this.. If in doubt, do as a couple other did above and clear it with your tax professional... IRS code is open to interpretation... If audited, you just have to prove your interpretation is logical and accurate based on the verbage the IRS uses, not the intent... We are governed by the letter of the law not the intended use of the law...

[GNandGS]

To add to that, in marrying overseas I learned that law trumps document.

In other words, just because I could download a PDF or find info on the gov site, doesnt mean squat. It was/is possible to have dated info. They told me it was my responsibility to follow up.

It was so bad that opposite "rules" were found depending on what page I viewed online. bleh.

Definitely check with your tax guy!

[marsmars]

RAPTOR,
Where on the tax for do I say my life was in danger and I had to flee the country?

Thanks.
Dave

[Lonestar]

Where can you obtain forms and instructions for 2004 in regards to this loophole? I would like to file an ammended return.

[Anaconda_Dinar_Sheik]

Defensebasecomp@aol.com

Any civilian coming back from Iraq or Afgan, if you are having any physical or mental promblems, You fall under something called The Defense Base Act. I gave you the above link to a lawyer in Houston, his name is Gary Pitts. This lawyer is free, his fee is paid by the Dept of Labor. You can also call him at (713) 910-0555.

[Britney Spears]

I was told by a friend who has been in country 24 months now that he has used the Combat Zone Exclusion. He just hand writes in red ink across the top of his form COMBAT ZONE. Told me hes done it twice already with no problems. This is my first year here, but I already know that Im not going to meet the 330 day rule. Ill let you know if that works for me. Im going to do same as him, He said his tax man said to do it that way.

~Britney Spears