A contractor can log more days on foreign soil than the foreign earned income exclusion requires and still watch the IRS take the whole exclusion away, because the day count was never the test that mattered most. IRC Section 911(d)(1) makes a foreign tax home a separate, first requirement that sits in front of both the bona fide residence test and the physical presence test, and many of the FEIE disputes that reach Tax Court are really tax home cases. Contractors in Iraq and Afghanistan, offshore rig crews on rotating schedules, and even a Japan Airlines pilot have all fought this exact battle, and the outcome comes down to a single question. Where was your abode?
What Is the Tax Home Requirement for the Foreign Earned Income Exclusion?
The tax home requirement is a threshold condition that both FEIE tests share. IRC Section 911(d)(1) defines a "qualified individual" as a US citizen or resident whose tax home is in a foreign country and who also meets the bona fide residence test, an uninterrupted period including an entire taxable year, or the physical presence test, at least 330 full days in any 12 consecutive months. Treasury Regulation 1.911-2(a)(1) makes clear the tax home has to be foreign for the whole of that period, and a partial stretch of it is never enough.
IRC Section 911(d)(3) then defines tax home by borrowing the travel-away-from-home concept in Section 162(a)(2), and adds the rule that decides most of these cases: an individual is not treated as having a foreign tax home for any period the individual's abode is within the United States, unless that individual is serving in an Executive order combat zone in support of the Armed Forces. Treasury Regulation 1.911-2(b) fills in the mechanics, placing the tax home at the individual's regular or principal place of business, or, absent one, at the individual's regular place of abode in a real and substantial sense. The IRS's FEIE tax home page backs that up. Your tax home is the general area of your main place of business or post of duty, regardless of where you maintain your family home, and if you have no regular place of business your tax home becomes wherever you regularly live.
Can You Pass the 330 Day Test and Still Lose the FEIE?
You can, and the case that proves it left no room for the IRS to argue about the days. In Haskins v. Commissioner, 820 F. App'x 994 (11th Cir. 2020), Janice Haskins worked in Afghanistan through 2011 and 2012, and the Tax Court found, with the Commissioner conceding the point, that she was physically present there for more than 330 days. That should have ended the inquiry under a day count reading of the statute. It did not, because the Eleventh Circuit affirmed that her abode never left the United States. She kept an Arizona home, a US driver's license, and a bank account, and she used that account to pay household bills and her son's schooling while she was overseas. Her ties to Afghanistan were confined to living on a military base with no ability to bring family and no travel off base.
Why 330 Days Is Not the Finish Line
CautionTreasury Regulation 1.911-2(a)(1) requires a foreign tax home "throughout" the qualifying period, and Harrington v. Commissioner, 93 T.C. 297 (1989), held that Congress intended the same tax home standard to govern a claim built on physical presence and a claim built on bona fide residence alike. There is no version of the physical presence test that skips the abode question. A taxpayer who racks up 340 or 350 days abroad while still running family, banking, and household life from a US address is checking the wrong box first.
Haskins also shows the limits of relying on later law to rescue an earlier year. The 2018 combat zone amendment to Section 911(d)(3) applies only to tax years beginning after December 31, 2017, so it never reached her 2011 and 2012 years even though Afghanistan had been an Executive order combat zone since 2001.
What Is an Abode for FEIE Purposes?
Abode is where your life actually is. The IRS treats the word as a domestic concept tied to your family, economic, and personal ties, measured by where you bank, where your kids go to school, and where your spouse lives day to day. A desk in an office, a rig off the coast, or a cockpit over an ocean tells you where the tax home might sit, but it says nothing about the abode, and the two can point to entirely different countries for the same person in the same year.
Treasury Regulation 1.911-2(b) supplies the fallback rule for a taxpayer with no fixed office: absent a regular or principal place of business, the tax home sits at the individual's regular place of abode in a real and substantial sense. That single sentence is why abode evidence, bank statements, school enrollment, voter registration, and lease or mortgage records, ends up doing more work in these disputes than a stamped passport ever does.
Does Keeping a US Home or Family in the United States Disqualify You From the FEIE?
Owning a house back home is not, by itself, the disqualifying fact people assume it is. Treasury Regulation 1.911-2(b) makes that explicit. Maintenance of a dwelling in the United States, whether or not that dwelling is used by the individual's spouse and dependents, does not necessarily mean the individual's abode is in the United States. Temporary presence in the United States carries the same qualifier. The regulation asks a real and substantial question about where your family, economic, and personal ties actually sit, and a US house sitting empty or rented is only one data point in that mix.
Jones v. Commissioner, 927 F.2d 849 (5th Cir. 1991), shows the rule working in a taxpayer's favor. A Japan Airlines pilot based in Tokyo won bona fide resident status and a foreign tax home even though his wife kept her own career and their townhome in Anchorage, Alaska. The Fifth Circuit drew a sharp line between him and the offshore rig workers who had already lost similar claims: Jones paid his own Japanese housing, meals, and vacation travel, and he paid Japanese income tax, while the rig workers in Lemay and Bujol had their housing, meals, and flights home paid by their employers.
How Does the Tax Home Rule Apply to 28 On, 28 Off Rotational Workers?
Rotational schedules have generated more losing FEIE claims than almost any other fact pattern, and the IRS's own published example describes exactly why. Its Example 1 covers a worker on an offshore oil rig in a foreign country's territorial waters, working a 28 day on, 28 day off schedule and returning to a family residence in the United States during every off period. The IRS concludes that worker has an abode in the United States and cannot claim either exclusion or the housing deduction, no matter how many days the on periods add up to.
Rotational Workers Who Lost the Exclusion
Case Pattern- Lemay v. Commissioner, 837 F.2d 681 (5th Cir. 1988). Tunisia offshore rig, 28 on and 28 off, wife and daughter in Lake Charles, Louisiana, where the family voted, banked, and held their licenses.
- Bujol v. Commissioner, T.C. Memo. 1987-230. UAE offshore rig, the same 28 on, 28 off pattern, family in Louisiana, employer required the taxpayer to keep a US residence.
- Harrington v. Commissioner, 93 T.C. 297 (1989). Angola platform, 28 on and 28 off, family in Frankston, Texas, where the children attended school and the family held a Texas bank account.
- Evans v. Commissioner, T.C. Memo. 2015-12. Sakhalin Island, Russia, a 30 on and 30 off schedule, with roughly 23 of every 30 off days spent at a Louisiana home the taxpayer owned and paid for.
Evans is worth a second look because the outcome split in two directions. The Tax Court denied the exclusion on the same abode reasoning as the earlier rig cases, yet it declined to impose the accuracy related penalty because the taxpayer had reasonably relied on a competent preparer for what the court itself called a technical area of tax law. Losing the exclusion does not automatically mean owing a penalty too, and a good faith reliance argument can defeat the penalty even where the exclusion claim fails outright.
What Is the Difference Between a Temporary and an Indefinite Work Assignment?
The temporary versus indefinite distinction borrows directly from the flush language of IRC Section 162(a), which states that a taxpayer is not treated as temporarily away from home for any period of employment exceeding one year. The IRS translates that into a working rule for the tax home test: an assignment you expect to last one year or less, and that in fact does, is temporary, while one you expect to last more than one year is indefinite from the start. A temporary absence from a US tax home never earns the exclusion, however many days it lasts, because the tax home itself never moved abroad.
Linde v. Commissioner, T.C. Memo. 2017-180, shows how that plays out for someone whose paperwork looked, on its face, temporary. A retired Army helicopter pilot flew for government contractors in Iraq under a series of one year contracts that were routinely renewed across 2010 through 2012. The Tax Court held that the pattern of renewal, combined with the pilot's genuine intent to keep working there, made the employment indefinite, even though no single contract ran longer than a year on paper. Contract length alone never settles the question; what the taxpayer actually expected, and what the pattern of renewals actually showed, does.
Do War Zone Contractors Ever Win an FEIE Tax Home Case?
Some do, and the split between the winners and the losers comes down to the same abode facts that decide every other tax home dispute. Linde won because he lived outside the Green Zone, traveled around Iraq for work, held an Iraqi residency visa, and paid his own flights home from Kuwait out of his own pocket. Daly v. Commissioner, T.C. Memo. 2013-147, sits at the opposite end: a Utah based contractor whose Afghanistan and Iraq assignments each ran only about three months, who spent no more than 106 and 93 days in those countries across two full years, and who stayed confined to US military bases the entire time while his wife remained in Utah. His ties were, in the Tax Court's framing, severely limited and transitory.
Haskins fits the same losing pattern over a longer stay: more than 330 days in Afghanistan, but a US home, bank account, and household bills still running from Arizona, against base housing her family could not join. The question was never the country or the day count. It was whether the contractor's home life crossed the ocean with the job.
Does the Combat Zone Exception Fix the Abode Problem for Military Contractors?
It narrows the abode bar for a specific group, but it does not remove the tax home test altogether. The Bipartisan Budget Act of 2018 added the current combat zone language to Section 911(d)(3), and that amendment applies only to tax years beginning after December 31, 2017. Under it, a person serving in an area the President has designated by Executive order as a combat zone for Section 112 purposes, in support of the US Armed Forces, can be treated as having a foreign tax home even while their abode stays in the United States. The IRS lists the current Executive order zones as Afghanistan, the Kosovo area, and the Arabian Peninsula, which covers the land territory of Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab Emirates along with the surrounding waters named in the order.
Two limits matter as much as the relief itself. The exception lifts only the abode bar; the contractor still has to pass the bona fide residence test or the 330 day physical presence test, and still needs a genuine foreign principal place of business for the tax home to attach to at all. And the exception reaches only areas formally designated by Executive order under Section 112. The IRS uses the phrase combat zone loosely elsewhere to describe qualified hazardous duty areas such as the Sinai Peninsula and countries that receive Department of Defense certified support status, but whether those broader categories also satisfy the specific language of Section 911(d)(3) is not settled in anything verified here, so a contractor working in one of those adjacent areas should confirm the current designation before assuming the same relief applies.
Build the Abode File Before You Need It
The record that wins these cases is built while the facts are still current. Reconstructing it after an IRS notice arrives is far harder and far less convincing. Keep the foreign lease or housing arrangement, the pattern of off period travel, local bank and civic ties if any exist, the contract renewal history, and a clear statement of intent about how long the assignment was expected to run. Every winning case in this line, Jones and Linde alike, rested on exactly that kind of contemporaneous record.
What Should a Contractor Check Before Claiming the Exclusion?
Check the abode before the day count. The statute requires a foreign tax home and a passing day count, and racking up days abroad answers only the second half of that. IRC Section 911(d)(3) denies a foreign tax home to anyone whose abode stays in the United States, and decades of Tax Court cases involving rig workers, pilots, and war zone contractors show that abode is decided by family, banking, and household facts. A passport full of stamps carries little weight against that record. A contractor claiming the exclusion needs both a foreign tax home and a documented foreign abode, and the 2018 combat zone exception solves only half of that problem for a narrow group serving in specific Executive order zones. Confirm your own year and designation before relying on any of it.
For the day count and election mechanics themselves, see our Form 2555 foreign earned income exclusion guide and our bona fide residence versus physical presence test comparison.
Have questions about qualifying for the foreign earned income exclusion on a rotational, contractor, or overseas assignment? Contact TS CPA for a free consultation. We respond within the same day.
Official IRS and Government Sources
- IRC Section 911, Citizens or Residents of the United States Living Abroad
- IRC Section 162, Trade or Business Expenses
- Treasury Regulation 1.911-2, Qualified Individuals
- IRS, Foreign Earned Income Exclusion, Tax Home in Foreign Country
- IRS, Foreign Earned Income Exclusion, Physical Presence Test
- IRS, Combat Zones
- IRS, Instructions for Form 2555 (2025)
- IRS Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad
- Rev. Proc. 2024-40, 2025 Inflation Adjustments
- Rev. Proc. 2025-32, 2026 Inflation Adjustments