Thomas v. Commissioner , 33 B.T.A. 725 ( 1935 )

L. E. L. THOMAS, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Thomas v. Commissioner

Docket No. 77746.

United States Board of Tax Appeals

33 B.T.A. 725; 1935 BTA LEXIS 712;

December 13, 1935, Promulgated

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">*712 In 1929 the petitioner, an alien residing in the United States, went to Russia under a contract to perform services there for a period of two years. He returned to the United States on his vacation in 1930. At the expiration of his vacation he went again to Russia, where, because of an extension of his contract shortly before its termination he remained until his next vacation in 1932, when he returned to the United States. At the expiration of this vacation he went to Russia, where he remained until in 1933, when upon the termination of his services there he returned to the United States. Since his return in 1933 he has married a citizen of the United States and has continued to live here. Upon the occasion of each of petitioner's returns to the United States his reentry was by means of permits issued to him on the basis of applications made by him indicating that his visits abroad were only temporary. Held that the petitioner was an alien resident of the United States during the taxable year 1931 and that the salary he received during that year for services performed in Russia constituted taxable income.

E. H. McDermott, Esq., for the petitioner.

G. W.">*713 Brooks, Esq., for the respondent.

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TRAMMELL

">*725 This proceeding is for the redetermination of a deficiency in income tax of $619.56 for 1931. The only matter in controversy is the correctness of the respondent's action in including in petitioner's taxable income the amount of $14,323 received by him during the taxable year as salary from the Freyn Engineering Co., Chicago, Illinois, for services performed in Russia.

">*726 FINDINGS OF FACT.

The petitioner was born at Melbourne, Province of Quebec, Canada, in 1877. He resided continuously in Canada until 1897. In the summer of that year he was employed for approximately four months in an engineering office at South Milwaukee, Wisconsin. He then returned to Canada and completed a course in mechanical engineering at McGill University, Montreal, in the spring of 1898. He then returned to South Milwaukee, Wisconsin.

From May 1898 to March 1, 1927, the petitioner successively held fourteen positions, varying in length from four months to seven years, with various steel companies at South Milwaukee, Wisconsin; Dubuque, Iowa; Youngstown, Lorain, South Lorain, Cleveland, and Newburg, Ohio; Bremerton, ">*714 Washington; Neville Island, Pennsylvania; East Chicago, Indiana; and Sydney, Nova Scotia, Canada. The petitioner's last position during this period was at East Chicago, Indiana, where he was employed from February 1920 to March 1, 1927. During the World War the petitioner was employed by the Gary Tube Co. at South Lorain, Ohio, and the United States Steel Co., Ordnance Department, Neville Island, Pennsylvania.

During the period from May 1898 to March 1, 1927, the petitioner was unmarried and lived in rooms at private homes under verbal agreements from month to month. He resided with one family at 37 Twenty-first Street, East Chicago, Indiana, for seven years, and when they removed to Hammond, Indiana, he went with them and remained with them until he removed to the Southmoor Hotel, 6646 Stony Island Avenue, Chicago, Illinois, in October 1927.

Aside from a house that he and a friend built solely for renting purposes but subsequently sold, which was never occupied by him, the petitioner never owned a home in the United States nor did he ever occupy a house or apartment in the United States under a lease. Practically all vacations were spent at Melbourne, Quebec, with his parents. ">*715 The petitioner's only other relative is a brother, living at Montreal, Canada. For several years the brother has been an invalid valid and the petitioner has contributed to his support and maintenance.

On March 1, 1927, petitioner resigned his position at East Chicago, Indiana. He had put in many years of steady work and he decided to take a long vacation, possibly to retire. In the event of retirement he preferred to live in Melbourne, where he still had many friends, at Montreal, where his brother lived, or at Victoria, British Columbia, where he also had friends. The petitioner, however, has never been in Victoria.

Thereafter, about the middle of October 1927, the petitioner accepted a position with the Freyn Engineering Co., Chicago, Illinois, ">*727 in connection with engineering services for the Russian Government. He had not previously worked for that company and did not seek the employment. The petitioner conducted representatives of the Russian Government on a tour of various iron and steel plants in the United States and assisted in the preparation of general plans for a proposed iron and steel plant to be constructed in Russia. In May 1928 petitioner went">*716 to Russia to present the completed plans to the Russian Government. In September 1928 he returned to Chicago to work out certain alterations. Petitioner again went to Russia about January 1, 1929, to present the alterations.

On March 2, 1929, during petitioner's second trip to Russia, the Freyn Engineering Co. entered into a new contract with the Russian Government, agreeing to supply fourteen engineering specialists to render technical service in Russia for a period of two years beginning May 1, 1929. The work was to be performed under the direction of State Institute for Projecting Metallurgical Plants, known as "Gipromez." Petitioner agreed with the Freyn Engineering Co. to serve as supervisor of this group of technical specialists in Russia. His employment thereafter was confined entirely to the work in Russia. Petitioner returned to the United States in March 1929 to assemble the technical group and to settle his own affairs in this country. About three weeks later, in April, he departed for Russia, pursuant to the new contracts.

The purpose of the group was to supply the Russian Government with technical service, advice and information as to such industrial projects">*717 as might be assigned to them, but principally in relation to the preparation of plans for various iron and steel plants. The group was not engaged in construction work. Their work was not confined to particular projects. On their arrival they were given certain projects, but later others developed, and in all they worked on 18 to 20 different projects.

Successive extensions continued the contract with the Russian Government and petitioner's employment for two additional years, to May 1933. In May 1933, while petitioner was in Russia, the contract expired and petitioner's employment was terminated. Petitioner has neither sought nor accepted further employment. He left Russia during May 1933. After landing at New York about June 20, he went directly to Montreal to spend two or three weeks with his brother, who was seriously ill, and then came to Chicago, reporting informally to the Freyn Engineering Co.

During the period the petitioner was in Russia he was entitled, under his contract with the Freyn Engineering Co., to annual vacations. In the fall of 1930 he took a vacation of two months. Part of the time was spent with his brother in Montreal, and the balance was spent">*718 in Chicago, mostly at the office of the Freyn Engineering Co. ">*728 in connection with the selecting of six additional men for the group in Russia. His next vacation was two years later, in 1932. He spent a portion of the time with his brother in Canada, and only a small portion with the Freyn Engineering Co. The company paid the expenses of both vacations, pursuant to its contract with petitioner. Except for these two vacations, petitioner was continuously in Russia from about May 1, 1929, until the middle of May 1933.

When petitioner was first employed by the Freyn Engineering Co., in October 1927, he moved to the Southmoor Hotel at Chicago. He did not have an apartment or a lease, but merely occupied a single room with bath. He could, and on several occasions did, check in and out as at any hotel, paying only for the time he actually occupied the room. He stopped at the Southmoor Hotel, occupying similar quarters, in September 1928 upon returning from his first trip to Russia, in March 1929 upon returning from his second trip, and while in Chicago during his vacations in 1930 and 1932, checking in or out as the occasion required. He did not occupy any particular">*719 room on these occasions, but successively occupied various rooms. He returned to the Southmoor Hotel after the termination of his employment in 1933.

During the four years in Russia petitioner and other members of the group, some of whom were accompanied by their wives, lived in a building of twelve apartments at Leningrad, provided by the Russian Government pursuant to its contract with the Freyn Engineering Co. The building had been remodeled for this purpose and further alterations were made to suit the personal convenience of the occupants. The individuals paid rent for the apartments. Petitioner continued to pay rent upon his Russian apartment even when absent on his vacations. They engaged a housekeeper, cooks, maids, laundresses, and other servants.

Before returning to Russia in April 1929 petitioner opened an agency account with the Harris Trust & Savings Bank at Chicago, giving the bank a power of attorney to act with respect to his securities, which were listed in the account. This agency account was revocable at will. Petitioner also packed such of his personal effects as he would not need in Russia, consisting principally of clothing, technical books, and blue">*720 prints, and stored them with a storage company in Chicago both in 1929 and at the time of his two preceding trips to Russia. They were packed ready for shipment to wherever petitioner should direct the warehouse to ship them. The petitioner reacquired these effects upon his return to the Southmoor Hotel in 1933. Many of these possessions have not yet been unpacked, and are ready at the present time to be taken away or shipped.

">*729 Prior to petitioner's first departure for Russia in 1928 he had been informed that if he had taken out his first citizenship papers he could obtain an American passport. On February 17, 1928, he executed and filed in the United States District Court for the Northern District of Illinois a Declaration of Intention, wherein, among other things, he declared that he then resided at 6646 Stony Island Avenue, Chicago, Illinois, and that it was his intention in good faith to become a citizen of the United States and to permanently reside therein. The petitioner subsequently learned that he could not obtain an American passport on the basis of having taken out his first citizenship papers, and on each of the occasions that he went to Russia he went">*721 on a British passport. The petitioner has never completed the taking out of full citizenship papers.

Prior to the departure of petitioner on his first trip to Russia he executed an application form of the United States Department of Labor, Immigration Service, reciting therein that "The undersigned, being an alien, hereby makes application for a reentry permit, as provided in section 10 of the immigration act of 1924", and stating in support thereof that his address in the United States was 6646 Stony Island Avenue, Chicago, Illinois, that he was employed by the Freyn Engineering Co. of Chicago, Illinois, and that his reason for going abroad was "Business in connection with firm's Russian contracts." Pursuant to this application there was issued to the petitioner on April 2, 1928, a permit to reenter the United States as a nonquota immigrant. This permit provided that it should expire on April 2, 1929, and was surrendered by the petitioner to an inspector of the United States Immigration Service when he returned to the United States in September 1928.

On April 12, 1929, the petitioner subscribed and swore to Internal Revenue form 1040 C, an individual income tax return to be">*722 used by departing aliens, for the taxable period January 1 to April 30, 1929. In this return the petitioner stated that he was a resident of the United States. The filing of a similar form by the petitioner upon his subsequent departures from the United States was not required as the collector of internal revenue accepted the assurance of the petitioner's agent that the tax of the petitioner would be paid.

In the fall of 1930 the petitioner returned to the United States from Russia for a vacation of two months. On October 22, 1930, he executed an application to the United States Department of Labor, Immigration Service, for a reentry permit, as provided in section 10 of the Immigration Act of 1924, stating, among other things, that he last arrived in the United States at New York on October 4, 1930, that his principal residence in the United States was at 6646 Stony Island Avenue (Southmoor Hotel), Chicago, Illinois, that he had resided at that address for about 9 months, ">*730 that his place of business or employment was at 310 South Michigan Avenue, Chicago, Illinois, that he proposed to depart from the United States November 14, 1930, for a proposed absence of about">*723 9 months, and that his reason for going abroad was business. Pursuant to this application there was issued to the petitioner on October 30, 1930, a permit to reenter the United States as a nonquota immigrant. This permit provided that it should expire on October 30, 1931.

Before the American Vice Consul at Helsingfors, Finland, the petitioner on October 9, 1931, subscribed and swore to a "Request for Extension of Reentry Permit" which read in part as follows:

Leonard E. L. Thomas, residing at Southmoor Hotel, 6646 Stony Island Avenue, Chicago, Ill., hereby applies to the Commissioner General of Immigration at Washington D.C. for the extension for one year of my permit No. 659612 issued October 30, 1930. * * *

* * *

I desire the extension for the following reasons: The applicant represents the Freyn Engineering Co., 310 South Michigan Blvd., Chicago, Ill., is under contract to remain in Russia for one year ending April 30, 1932. The status of the applicant's business in Russia makes it desirable that he remain in that country until about the latter part of July, 1932, when it is his intention to return to the United States, two extensions of six months are desired so that">*724 the applicant need not make an extra trip from Russia to Finland to apply for another extension.

Pursuant to this request the petitioner's reentry permit was on October 29, 1931, extended until April 30, 1932.

Before the American Vice Consul at Helsingfors, Finland, the petitioner on February 18, 1932, subscribed and swore to an application for a further extension of his permit to reenter the United States. In this application he stated, among other things, that his address in the United States was the Southmoor Hotel, 6646 Stony Island Avevue, Chicago, Illinois. The following was stated as his reasons for an extension of the permit:

The applicant representing Freyn Engineering Co., 310 S. Michigan Blv'd., Chicago, Ill., is under business contract to remain in U.S.S.R. for one year ending April 30, 1932, with one interim vacation. The status of the applicant's business in U.S.S.R. makes it highly desirable that he remain in that country until about the latter part of July 1932, when it is his intention to return to the United States. As the current permit will expire April 30th, 1932, an extension of it is requested to admit of the applicant's remaining in U.S.S.R. until">*725 the latter part of July, 1932.

Pursuant to this application the petitioner's reentry permit was on March 7, 1932, extended to October 30, 1932, and the petitioner reentered the United States on September 2, 1932.

Shortly after the petitioner's arrival in the United States he made an application for another reentry permit under the provisions of section 10 of the Immigration Act of 1924. In this application it was recited, among other things, that the petitioner last ">*731 arrived in the United States on September 2, 1932; that his last permanent residence before date of entry was Chicago, Illinois, U.S.A.; that his present residence in the United States was 6646 Stony Island Avenue, Chicago, Illinois; that he proposed to depart from the United States about October 8, 1932, for an absence of eight to nine months; and that his reason for going abroad was to complete a business contract between the Freyn Engineering Co. and the U.S.S.R. Government. Pursuant to this application, a reentry permit was issued to the petitioner.

In making out customs declarations upon his returns to the United States, the petitioner on the first occasions when he had been absent for a relatively">*726 short time of from two to four months stated that he was a resident alien. However, on one occasion, when he had been absent a year and a half or two years, he stated that he was a nonresident alien.

During the petitioner's vacation in the United States and while attending a party in October 1930 he met for the first time Frances Hageman, an American citizen who was born in the United States of parents now residing in the United States. She conducted a dress shop in Chicago, traveled a good deal, and often went abroad. During their conversation she asked him where he was going to be so that she might meet him again some time. He told her that after he had finished with the work in Russia he might stay there on a special contract or might go back to Canada, and that he did not know where they could over meet again.

Although the petitioner and Frances Hageman never met again until in January 1934, and in the meantime had not communicated with each other, they were married early in June 1934. Since the middle of June 1934 they have been living at Hammond, Indiana, in a large furnished residence, all of which was leased from the owner except one apartment which he and his family">*727 occupy. The petitioner and his wife occupy the residence from month to month under a verbal agreement with the owner.

Under the authority conferred upon it by the petitioner when he opened an agency account with it in April 1929, the Harris Trust & Savings Bank at Chicago prepared and filed Federal income tax returns for the petitioner for 1929 through 1933. In the early part of 1930 the employee of the bank who had supervision of filing returns, knowing that the petitioner was a resident alien at the time of his departure from the United States, assumed that since the petitioner had left the country he was a nonresident alien. Due to pressure of work prior to March 15, 1930, and acting on this assumption, the employee of the bank decided to take advantage of the additional time beyond March 15 allowed a nonresident alien to file a return. Sometime after March 15, 1930, this employee told the secretary of ">*732 the Freyn Engineering Co. that the bank proposed to file a return for the petitioner as a nonresident alien. The secretary of the Freyn Engineering Co. told him that the petitioner had taken out his first citizenship papers, so he thought the petitioner would not">*728 wish that to be done. While not entirely agreeing with what he had been told, the employee of the bank directed that the return be filed as that of a resident alien. Subsequent returns filed by the bank for the petitioner, including that for 1931, the year in controversy, followed the 1929 precedent without further consideration of the question as to whether the petitioner was a resident or a nonresident of the United States. In the petitioner's return for 1931 it is stated that he was a citizen or resident of the United States.

During 1931 the Freyn Engineering Co. paid the petitioner $14,323.20 as salary for his services. While it is stated in the return filed for the petitioner for that year that the amount was received by the petitioner, no part of it was included in taxable income. In explanation of the omission of the item from income it is stated that the amount constituted earned income from sources without the United States and was received for personal services rendered without the United States over a 12-month period. In determining the deficiency the respondent determined that the petitioner was a resident alien of the United States during 1931 and that the amount">*729 received by him as compensation from the Freyn Engineering Co. constituted taxable income.

OPINION.

TRAMMELL: The petitioner states that there is no doubt but that he was a resident of the United States when he filed his income tax return in April 1929, prior to his departure to Russia, where he was to render services in that country under a two-year contract. He, however, contends that under the facts in the case he was a resident of Russia and not of the United States from May 1929 to May 1933, and that therefore the salary received by him from the Freyn Engineering Co. in 1931 is not subject to tax in the United States. The respondent contends that his action in determining that the petitioner was an alien resident in the United States in 1931 and that the salary in question was taxable was correct and should be sustained.

Pertinent portions of the Revenue Act of 1928 are as follows:

SEC. 22. GROSS INCOME.

(a) General definition. - "Gross income" includes gains, profits, and income derived from salaries, wages, or compensation for personal service, of whatever kind and in whatever form paid, * * * and income derived from any source whatever.

* * *

(9) ">*730 ">*733 MISCELLANEOUS ITEMS. - The following items, to the extent provided in section 116:

Earned income from sources without the United States;

* * *

SEC. 31. EARNED INCOME CREDIT.

(a) Definitions. - For the purpose of this section -

(1) "Earned income" means wages, salaries, professional fees and other amounts received as compensation for personal services actually rendered, * * *.

SEC. 116. EXCLUSIONS FROM GROSS INCOME.

In addition to the items specified in section 22(b), the following items shall not be included in gross income and shall be exempt from taxation under this title:

(a) Earned income from sources without United States. - In the case of an individual citizen of the United States, a bona fide nonresident of the United States for more than six months during the taxable year, amounts received from sources without the United States if such amounts constitute earned income as defined in section 31; * * *

SEC. 119. INCOME FROM SOURCES WITHIN UNITED STATES.

* * *

(c) Gross income from sources without United States. - The following items of gross income shall be treated as income from sources without the United States:

* * *

">*731 (3) Compensation for labor or personal services performed without the United States;

* * *

Regulations 74, relating to the Revenue Act of 1928, provide as follows:

ART. 1022. Definition. - A "nonresident alien individual" means an individual -

(a) Whose residence is not within the United States; and

(b) Who is not a citizen of the United States.

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 or not 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">*732 be his intention at all times to return to his domicile abroad when the purpose for which he came has been consummated or abandoned. An alien whose stay in the United States is limited to a definite period by the immigration laws is not a resident of the United States within the meaning of this article.

">*734 ART. 1025. Loss of residence by alien. - An alien who has acquired residence in the United States retains his status as a resident until he abandons the same and actually departs from the Inited States. An intention to change his residence does not change his status as a resident alien to that of a nonresident alien. Thus an alien who has a cquired a residence in the United States is taxable as a resident for the remainder of his stay in the United States.

In support of his contention that he was a resident of Russia from May 1929 to May 1933 and not a resident of the United States during this period, the petitioner relies in part on certain portions of his testimony as to his intentions and state of mind prior to and during this period. The petitioner testified that when he left the United States in April 1929 he considered that he was closing his affairs">*733 here, that he abandoned his residence here and took up his residence in Russia, and that while he anticipated at that time that if he did not return to the United States to live he probably would return to look after the securities held in the agency account with the Harris Trust & Savings Bank and certain real estate loans. He also testified that in 1931 he regarded his home as being in Russia and that he was not in such a frame of mind then that he could have said as to what country or place he would go in event his work in Russia terminated.

The two-year contract under which the petitioner went to Russia in April 1929 expired about May 1, 1931. Immediately prior to the expiration of that contract an arrangement was made to extend the time of his service for another year. The permit to enter the United States issued to the petitioner on October 30, 1930, was due to expire on October 30, 1931. The evidence shows that on October 9, 1931, the petitioner made and swore to a request for an extension of this permit reciting that he resided at the Southmoor Hotel, 6646 Stony Island Avenue, Chicago, Illinois, and that the status of his business in Russia made it desirable for him">*734 to remain in Russia until the latter part of July 1932, when it was his intention to return to the United States. This indicates that in 1931 the petitioner still considered his residence was in Chicago, Illinois, and that it was his intention to return to the United States as soon as the status of his business in Russia would permit.

The regularity with which the petitioner made application for reentry permits when departing from the United States, the representations made in such permits, his action in returning to the United States just as soon as and just as often as his business engagements in Russia permitted, and his continued residence here since the final termination of his activities in Russia in our opinion do not indicate that the petitioner abandoned his residence in the United States when he went to Russia in 1929 or that he thereafter intended ">*735 to or did make Russia his home. If the petitioner intended to abandon his residence in the United States in April 1929 and thereafter take up his residence in and make his home in Russia, as he now testifies, it would seem that he would have informed his employer and his agent in the United States of such intention. ">*735 The record fails to disclose that he gave them such information. As far as his employer was concerned, the petitioner left it under a contrary impression and left his agent wholly in doubt, as is evidenced by the incident relating to the filing of petitioner's 1929 income tax return by his agent. The statement as to his future whereabouts made by the petitioner at a party in October 1930 to one who was then only a casual acquaintance but who later became his wife is without any particular significance. Neither appears to have attached any importance to their meeting or their conversation. In fact they never communicated with each other nor met again until in January 1934, when petitioner's wife would not have known who he was if she had not been told. The statement itself fails to indicate that the petitioner then had any definite intention of staying in Russia any longer than his business engagement required.

So far as we can determine the petitioner's absence from the United States during the time he was in Russia was purely temporary and made necessary by his business engagement. Always prior to each of his departures the petitioner availed himself of the provisions of">*736 the immigration laws to obtain a reentry into the United States when his business engagement in Russia permitted his return here.

The Immigration Act of 1924, secs. 3, 4, and 10 (8 U.S.C.A. §§ 203, 204, and 210) provides in part as follows:

§ 203. "Immigrant" defined. - When used in this subchapter the term "immigrant" means any alien departing from any place outside the United States destined for the United States * * *

§ 204. "Nonquota immigrant" defined. - When used in this subchapter the term "nonquota immigrant" means -

* * *

(b) An immigrant previously lawfully admitted to the United States, who is returning from a temporary visit abroad;

(c) An immigrant who was born in the Dominion of Canada * * *

§ 210. (a) Reentry permits; persons entitled to; application for; form and contents; verification; photograph accompanying. - Any alien about to depart temporarily from the United States may make application to the Commissioner General for a permit to reenter the United States, stating the length of his intended absence, and the reasons therefor. Such applications shall be made under oath, and shall be in such form and contain">*737 such information as may be by regulations prescribed, and shall be accompanied by two copies of the applicant's photograph.

">*736 (b) Issue by Commissioner General with approval of Secretary of Labor; life of permit; form and contents of permit; photograph attached. If the Commissioner General finds that the alien has been legally admitted to the United States, and that the application is made in good faith, he shall, with the approval of the Secretary of Labor, issue the permit, specifying therein the length of time, not exceeding one year, during which it shall be valid. The permit shall be in such form as shall be by regulations prescribed and shall have permanently attached thereto the photograph of the alien to whom issued, together with such other matter as may be deemed necessary for the complete identification of the alien.

(c) Extension of life of permit. - On good cause shown the validity of the permit may be extended for such period or periods, not exceeding six months each, and under such conditions, as shall be by regulations prescribed.

* * *

(e) Surrender of permit on return to United States. - Upon the return of the alien to the United States">*738 the permit shall be surrendered to the immigration officer at the port of inspection.

(f) Effect of permit on rights of alien. - A permit issued under this section shall have no effect under the immigration laws, except to show that the alien to whom it is issued is returning from a temporary visit abroad; but nothing in this section shall be construed as making such permit the exclusive means of establishing that the alien is so returning.

The phrase "lawfully admitted" as used in § 204(b) means lawfully admitted for permanent residence, as was stated in International Mercantile Marine Co. v. Elting, 67 Fed.(2d) 886. In construing the meaning of the word "temporary" in the phrase "returning from a temporary visit abroad" as used in §§ 204(b) and 210, it was said in United States ex rel. Lesto v. Day, 21 Fed.(2d) 307:

The word "temporary," in the phrase "returning from a temporary visit abroad," means more than the mere retention of domicile; that is, an intention to keep the United States as a home, to which one will ultimately return. * * * Without attempting a complete definition of "a temporary visit," we may say that we think">*739 the intention of the departing immigrant must be to return within a period relatively short, fixed by some early event.

The length of time an alien is absent from the United States is not alone determinative of the question upon his return as to whether he is returning from a temporary visit abroad. In Serpico v. Truedell, 46 Fed.(2d) 669, an alien went abroad in 1914 to complete his education, leaving his parents and other members of his family in the United States. In 1925, after the completion of his education, he sought to return to the United States. It was held that although he had been absent 11 years he was returning from a temporary visit abroad and was entitled to be admitted to the United States.

In order to avail himself of the provisions of the immigration laws and obtain an easy reentry into the United States the petitioner held himself out to the immigration authorities as one who ">*737 had been admitted to the United States for permanent residence and represented that in going abroad he was not abandoning the residence and domicile established here, but was going abroad temporarily and would return just as early as his business engagement, ">*740 the duration of which was fairly definitely fixed, would permit. Having thus held himself out and satisfied the immigration officials that his absence was to be only temporary and thereby having obtained the benefits of his action, we think he is to be bound by it. Little weight is to be given statements that he now makes to the effect that his intentions then were contrary to what his acts purported them to be.

In our opinion the facts in the case establish that the petitioner never acquired residence in Russia, but retained his residence in the United States. The respondent's action in determining that the petitioner was a resident of the United States during the taxable year and that the salary received for services rendered in Russia is subject to tax is sustained. Cf. Frederico Stallforth,30 B.T.A. 546">30 B.T.A. 546; affd., 77 Fed.(2d) 548.

The petitioner urges that, should we hold that he was a resident alien of the United States during the taxable year, the salary received by him in that year for services in Russia is nevertheless not taxable because of being excluded from gross income under section 116(a) of the Revenue Act of 1928. That section provides">*741 that, in the case of an individual citizen of the United States who is a bona fide nonresident thereof for more than six months during the taxable year, the amounts of earned income received from sources without the United States shall not be included in gross income and shall be exempt from taxation. The petitioner, while recognizing that the provisions of the section specifically apply to the case of an individual citizen of the United States, nevertheless urges that Congress, by providing in the other sections of the act the same deductions, credits and rates of tax for residents of the United States irrespective of whether they are citizens or aliens, has indicated an intention to treat citizens and resident aliens upon the same basis, and that we should therefore hold the provisions of section 116(a) to be applicable to the salary in controversy. Statutes providing for exemptions from tax are to be strictly construed and are to be applied only to cases falling clearly within their intendment. Congress having expressly limited the provisions of section 116(a) to the cases of citizens of the United States, such provisions may not be applied to the case of one not a citizen of">*742 the United States. 30 B.T.A. 546">Frederico Stallforth, supra.

Decision will be entered for the respondent.