In White v. Hofferbert, D.C.Md.1950, 88 F.Supp. 457, an exemption was allowed under section 116(a)(1) to an officer of an American corporation who went to Sweden and Spain to serve his company. For two of the taxable years for which the exemption was allowed, taxpayer spent almost six months of each of those years in the United States. He paid no taxes to either Sweden or to Spain, and when wartime restrictions were lifted, his wife joined him in Spain for only a brief period, returning to the United States for reasons of health, and remaining in this country when her mother became ill. There the Court stated, at page 461:
'The fact that taxpayer did not pay foreign taxes is relevant but not of itself conclusive or controlling.'
And further, at page 463:
'* * * If the taxpayer was a bona fide foreign resident in the foreign country, his temporary absence therefrom on business or vacation trips does not defeat the exemption.'
In Yaross v. Kraemer, D.C.Conn.1949, 83 F.Supp. 411, the taxpayer, a United States citizen domiciled in Connecticut, went to Canada during World War II on a full time basis to ferry airplanes to combat areas. He made several trips to Connecticut during this period, each of short duration, retained his interest in a United States company, and bought and sold another business in this country. The Court held taxpayer to be a bona fide resident of Canada.
In Weible v. United States, 9 Cir., 1952, 244 F.2d 158, taxpayer and his wife sought refund of taxes, claiming they were paid on income exempt under the provisions of Section 116, of the Act of 1939. Taxpayer was hired by Max Factor to aid in the planning and construction of manufacturing plants in foreign countries, and the training of personnel to operate them. The taxpayer agreed to remain permanently outside of the United States except for short periods of training and consultation. The taxpayer became integrated in each foreign country to the extent of establishing social and business contacts locally. He had bank accounts in Los Angeles during this period where his employer deposited his checks, and he continued making payments toward the purchase of a lot in the United States. The Appellate Court, reversing the District Court's decision in favor of the Government, held that it could properly substitute its judgment for that of the trial court upon finding that the judgment of the latter was contrary to the weight of the evidence. Commissioner of Internal Revenue v. Fiske's Estate, 7 Cir., 1942, 128 F.2d 487, certiorari denied 317 U.S. 635, 63 S. Ct. 63, 87 L. Ed. 512; Bogardus v. Commissioner of Internal Revenue, 1937, 302 U.S. 34, 58 S. Ct. 61, 82 L. Ed. 32. The reviewing Court found that Weible was a bona fide resident of foreign countries because he was (1) a citizen of the United States, (2) actually present in the foreign countries, (3) not a transient or sojourner; also (4) that he had at all times more than a floating intention to remain in the foreign countries, (5) for a period of time indefinite as to duration, (6) the purpose of his stay in the foreign countries could not be promptly accomplished, but was of such a nature as to require an indefinite extended foreign residence, even though (7) it was his intention to return to the United States when the purpose for which he entered the foreign countries had been accomplished or abandoned.
The Government in the present case relies heavily upon the case of Jones v. Kyle, 10 Cir., 1951, 190 F.2d 353. Kyle, the taxpayer, was a pipe-fitter by trade, who was married and lived in Oklahoma. In order to earn enough money to enable him to purchase a farm in Oklahoma he signed an 18 month contract in 1944 with a Brazilian corporation to work in Saudi Arabia. He had the option of remaining longer in Saudi Arabia if he desired, and upon initially leaving the United States he intended to stay abroad for three years. He made no effort to take his wife with him, and while overseas he lived in a barracks with 700 to 800 other American workmen. He did nothing to identify himself with the customs or habits of that country, nor did he pay any taxes there. Most of his salary was paid to his wife in Oklahoma. The Court said, at page 355:
'Viewed in their totality these facts and circumstances make it clear that the taxpayer did not go to Saudi Arabia for permanent residence. He did not go there for an indefinite or undetermined period. * * * He went for a specific purpose and for a fixed period of time.'
This case is readily distinguishable from the case at bar where our taxpayer purchased a home and completely entered into the social life, customs and habits of France, in addition to the other distinguishing facts already mentioned in this opinion.
In Downs v. Commissioner of Internal Revenue, 9 Cir., 1948, 166 F.2d 504, certiorari denied 1948, 334 U.S. 832, 833, 68 S. Ct. 1346, 92 L. Ed. 1759, the plaintiff signed a contract with Lockheed Aircraft Corp. in 1942 whereby he agreed to serve overseas in a position related to the prosecution of World War II. Taxpayer agreed to abide by the regulations of the United States Government, as well as those of his employer.
The Court, in denying the relief sought stated, at page 509:
'In practically all but geography petitioners, were on American soil, actually under the American flag, performing services for the benefit of the American Government, using materials furnished them by the American Government through the American contractor -- Lockheed.'
As in the Kyle case, supra, these facts are different from those in the case before us.
An order may be presented in conformity with the conclusions hereinabove set forth.
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