Court Ruling: Antarctica Is Not A Foreign Country

A recent U.S. Tax Court ruling declared that Antarctica is not a foreign country for purposes of the U.S. tax code. The opinion of the court claims that since Antarctica does not have it’s own government or tax system it is not a foreign country in the eyes of the IRS, and therefore citizens working in Antarctica are not entitled to the foreign earned income exclusion (FEIE). The FEIE typically allows taxpayers living and working outside the U.S. for at least an entire calendar year to exclude up to $82,400 of their foreign-earned income from their federal tax liabilities. Although the taxpayers still have to pay taxes to the foreign country they work in, but since Antarctica does not require tax payments this rule does not apply.