## Facts

- John T. Lemay and Yvonne P. Lemay filed a joint federal return and sought to exclude roughly $75,000 of John Lemay’s 1982 earnings as foreign earned income under 26 U.S.C. § 911(a)(1).
- In 1982, John Lemay worked for Penrod Drilling Company as an assistant drilling superintendent on an offshore oil rig in Tunisia’s territorial waters.
- Lemay worked a rotational schedule: 28 days on the rig followed by 28 days in Lake Charles, Louisiana, returning to the same U.S. residence during each off-duty period.
- Penrod paid Lemay’s travel between Louisiana and Tunisia and provided his food and lodging while abroad; it also paid Tunisian taxes related to his Tunisian earnings.
- During work periods, Lemay spent essentially all time on the rig and was on call 24 hours a day; he sometimes traveled to Sfax, Tunisia, where he stayed in employer-paid hotels or apartments.
- Lemay had limited contacts with Tunisia outside work (occasional meetings and social interactions), and his day-to-day life abroad was largely confined to employer-controlled settings.
- Lemay maintained substantial U.S. ties, including a U.S. bank account, a Louisiana driver’s license, and Louisiana voter registration and voting.
- The Commissioner determined an income tax deficiency for 1982; the Tax Court upheld the deficiency, finding Lemay was not a “qualified individual” because his “abode” remained in the United States. The taxpayers appealed.

## Issues

1. Whether Lemay’s “abode” was within the United States during 1982, triggering 26 U.S.C. § 911(d)(3) and preventing him from being treated as having a foreign “tax home.”
2. Whether, in light of the tax-home/abode limitation, Lemay was a “qualified individual” eligible for the foreign earned income exclusion for 1982.

## Decision

- The Fifth Circuit affirmed the Tax Court’s judgment for the Commissioner.
- The court held that Lemay’s abode remained in Louisiana during 1982.
- Because § 911(d)(3) denies foreign tax-home status when the taxpayer’s abode is in the United States, Lemay could not have a tax home in Tunisia for the relevant period.
- As a result, Lemay was not a “qualified individual” under § 911 and could not claim the foreign earned income exclusion for 1982.

## Legal Principles

- Under 26 U.S.C. § 911(d)(1), eligibility for the foreign earned income exclusion requires, among other conditions, that the taxpayer’s tax home be in a foreign country.
- Section 911(d)(3) provides a statutory bar: a taxpayer is not treated as having a foreign tax home for any period in which the taxpayer’s abode is within the United States.
- “Abode” focuses on where the taxpayer’s personal, domestic, and familial life is centered, not merely where the taxpayer works or is physically present for employment.
- Rotational or offshore foreign work, combined with regular returns to a U.S. residence and continued civic and financial ties to the United States, supports a finding that the taxpayer’s abode remains in the United States.

## Conclusion

The court upheld the denial of the § 911 foreign earned income exclusion because Lemay’s rotational offshore assignment did not shift his abode from Louisiana to Tunisia, and § 911(d)(3) therefore barred treating Tunisia as his tax home for 1982.


Lemay v. Comm’r of Internal Revenue, 837 F.2d 681 (5th Cir. 1988)