No, this is not about a certain examination known to those of us of a certain age. This is the story of a Personal Services Agreement between the US Dep’t of State and Sidney O’Kagu, 151 T. C. 6, filed 9/29/18.

Sid O was in Germany, had a German work permit, kept a bank account there in an onshore local bank into which our tax dollars (first being converted into Euros) were directly deposited to pay Sid O for his labors as a security equipment tech in the Frankfurt consulate. And he didn’t get a lot of US employee benefits.

Sid O claims Section 911(a)(1) foreign earned income exclusion.

Nope, says ex-Ch J Michael B (“Iron Mike”) Thornton, and his colleagues respond: “so say we all.”

Sid O says 22 USC §2269 means he’s not an employee of the US gov’t, because he’s got a positive PSA.

Ex-Ch J Iron Mike ripostes with the last clause of said statute: “…for purposes of any law administered by the Office of Personnel Management.” 151 T. C. 6, at p. 6.

Well, dear ol’ Title 26 of the USC is not administered by DOS OPM. And Ex-Ch J Iron Mike has caselaw to prove it.

But more elegantly: “Petitioner has cited, and we are aware of, no other clause of the Basic Authorities Act or any other provision of law that would suggest any other construction or effect of the Basic Authorities Act as applied to this case.

“Clearly, section 911 is not a ‘law administered by’ the Office of Personnel Management.  Rather, it is part of the Internal Revenue Code, which (with exceptions not relevant here) is administered ‘by or under the supervision of the Secretary of the Treasury.’  Sec. 7801(a).  Accordingly, pursuant to 22 U.S.C. sec. 2669(c) petitioner is considered an employee of the U.S. Government for income tax purposes, notwithstanding his assertions about the nature of his employment perquisites and conditions.  Consequently, the wages that he received from the U.S. Department of State do not constitute foreign earned income within the meaning of section 911(b)(1).  He is therefore not entitled to the foreign earned income exclusion for the years in issue.” 151 T. C. 6, at p. 7-8.

Partial summary J for IRS.

Partial? What’s missing from this picture?

My sophisticated readers will rise as one and yell “The 20% accuracy chops!”

Ex Ch-J Iron Mike is on the case: “Respondent has not sought summary judgment with respect to the sec. 6662(a) accuracy-related penalties.  We leave that issue for further proceedings.” 151 T. C. 6, at p. 8, footnote 3.

No Section 6751(b) Boss Hoss sign-off? Stay tuned.