Court Opinion

ID: 9442913
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:03:52.076161+00
Date Added: 2024-06-11T17:29:17.053547
License: Public Domain

PHILLIPS, Chief Judge
(dissenting).
During the taxable year ending December 31, 1945, Kyle received wages from Compañía Constructora Bechtel-McCone, S.A., a foreign corporation, for personal services rendered that company in Saudi Arabia. He received no other income. He filed an income tax return with the Collector at Oklahoma City, Oklahoma, and reported such wages. A tax of $923.22 was assessed, which Kyle '-paid. Thereafter, he filed a timely claim for refund on the ground that for the entire taxable year ending December 31, 1945, he was a citizen of the United States, a bona fide resident of Saudi Arabia, and that the wages received constituted earned income. The Commissioner failed either to allow or reject the claim within six months. Thereupon Kyle brought this action for refund of the tax paid, with interest and costs. The trial court found that during the entire taxable year of 1945 Kyle was a citizen of the United States and a bona fide resident of Saudi Arabia; that during such year he received from sources without the United States the amount of wages reflected in his income tax return, and that such wages constituted earned income and were exempted from taxation. This is an appeal from a judgment awarding Kyle $923.22, with interest and costs.
Section 116 of the Internal Revenue Code, as amended by § 148(a) of the Revenue Act of 1942, 56 Stat. 798, 841, and § 107 of the Revenue Act of 1943, 58 Stat. 21, 31, provides that in the case of an individual citizen of the United States who is a bona fide resident of a foreign country during the entire taxable year, the amounts received by him from sources without the United States, if such amounts constituted earned income, shall not be included in gross income and shall be exempt from taxation.
Section 29.116-1 of Treasury Regulations 111, as amended by T. D. 5373, 1944 Cum. Bull. 143, in part, provides:
“Whether the individual citizen of the United States is a bona- fide resident of a foreign country shall be determined in general by the application of the principles of sections 29.211-2, 29.211-3, 29.211-4, and 29.211-5, relating to what constitutes residence or non-residence, as the case may be, in the United States in the case of an alien individual.”
Section 29.211-2 of Treasury Regulation 111, in part, provides:
“An alien actually present in the United States who is not a mere transient or sojourner is a resident of the United States for purposes of the income tax. Whether he is a transient is determined by his intentions with regard to the length and nature of his stay. A mere floating intention, indefinite as to time, to return to another country is not sufficient to constitute him a transient. If he lives in the United States and has no definite intention as to his stay, he is a resident. One who comes to the United States for a definite purpose which in its nature may be promptly accomplished is a transient; but if his purpose is of such a nature that an extended stay may be necessary for its accomplishment, and to that end the alien makes his home temporarily in the United States, he becomes a resident, though it may be his intention at all times to return to his domicile abroad when the purpose for which he came has been consummated or abandoned.”
The word “resident” is a term of many and varied meanings.1 It was, therefore, appropriate for the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, to adopt inter*357pretive regulations.2 As used in the statute and as interpreted by the regulation “residence” means broadly, presence as an inhabitant in a given place,3 not as a transient, but either indefinite as to time or for a purpose that is of such a nature that an extended stay be necessary for its accomplishment, although the person intends at all times to return to his domicile when the purpose has been consummated or abandoned.4
On October 9, 1944, Kyle entered into a preliminary contract with Bechtel-McCone, by which he offered to enter into its employ at Ras Tanura, Saudi Arabia, or in the general vicinity thereof, and Bechtel-McCone, subject to conditions not now material, agreed to engage Kyle to proceed to Saudi Arabia and upon his arrival at the place of employment to enter into a more formal contract for a period of employment to commence October 6, 1944. The formal contract entered into between Bechtel-Mc-Cone and Kyle provided that he should enter into its employ for a period of 18 months; that it would pay him a base salary of $450 per month and would furnish him meals and sleeping accommodations; and that upon the completion of Kyle’s services he would depart from the zone of operations and Bechtel-McCone would pay his travel expenses from San Francisco to Saudi Arabia and back to San Francisco.
Kyle was a pipefitter and oil well driller. He proceeded to Saudi Arabia, arriving there prior to Christmas, 1944. He left Saudi Arabia to return to the United States about May 25, 1946, While his contract of employment was for 18 months, he was told that at the end of the contract he could obtain other employment at Saudi Arabia, either with Bechtel-McCone or with oil companies operating in that area. Bechtel-McCone offered him additional employment and tried to persuade him to stay for the additional period. He returned to the United States because he became dissatisfied with a change in personnel of Bechtel-Mc-Cone. His purpose in accepting the employment was to earn and save sufficient money to purchase a small stock farm that would provide him with a home and make him secure. He intended to stay in Saudi Arabia for 18 months, and for a further indefinite period. He thought it would take him about three years to earn and save sufficient money to purchase the farm. He did not decide to return to the United States-until about May 10, 1946. It is true that in his original application for a passport, which was attended to by Bechtel-McCone, Kyle stated that he intended to return within 18 months. However, on September 17, 1945, he applied for an extension of his passport for a period of 11 months.
While in Saudi Arabia Kyle was located at two different points, Dhahran and Tanu-ra. Bechtel-McCone furnished him board and lodging and he slept in barracks. He was employed in the construction of a refinery at Tanura and a stabilization plant at Dhahran.
From the foregoing it will be seen that Kyle sought employment in a foreign country for the purpose of earning and saving sufficient money to provide him with a home and security. It was a purpose of such a nature that an extended stay would be necessary for its accomplishment. It will be further observed that while he intended ultimately to return to his domicile in the United States, the period of his stay beyond 18 months was indefinite as to time.
In the light of the applicable regulations, the undisputed facts, and the inferences to be drawn from such facts, which were peculiarly for the trial court, I do not think the trial court’s finding that Kyle was a bona fide resident of Saudi Arabia during the entire tax year of 1945 was erroneous. Accordingly, I would affirm.

. Commissioner v. Swent, 4 Cir., 155 F.2d 513, 515; Myers v. Commissioner, 4 Cir., 180 F.2d 969, 971; United States v. Rubinstein, 2 Cir., 166 F.2d 249, 254.

. Seeley v. Commissioner, 2 Cir., 186 F.2d 541, 543.

. Myers v. Commissioner, 4 Cir., 180 F.2d 969, 971; Seeley v. Commissioner, 2 Cir., 186 F.2d 541, 543.

. Myers v. Commissioner, 4 Cir., 180 F.2d 969, 971; Seeley v. Commissioner, 2 Cir., 186 F.2d 541, 543; Swenson v. Thomas, 5 Cir., 164 F.2d 783, 784.