On August 18, 2021, the Tax Court issued a Memorandum Opinion in the case of Wood v. Commissioner (T.C. Memo. 2021-103). The primary issues presented in Wood v. Commissioner were whether the petitioner is entitled to exclude from gross income, as “foreign earned income” under IRC § 911(a)(1), the wages she earned while employed as a contractor on a U.S. military base in Afghanistan; and (2) whether the petitioner is liable for a late-filing penalty under IRC § 6651(a)(1) for 2015. Background to Wood v. Commissioner The petitioner was a defense contractor in Afghanistan. She spent 22 days in the United States during 2012, 42 days during 2013, zero days during 2014, and 40 days during 2015 (including June 7-23). The petitioner returned to Texas in April 2016 when her employment ended due to a military drawdown in Afghanistan; however, she immediately began looking for other defense contracting work in…