An International Tax Guide for Professors Taking Non-U.S. Sabbaticals

Michelle Dhanda (J.D. 2010, Suffolk) has published, International Taxation: A Guide for Academics Abroad, 32 Suffolk Transnat'l L. Rev. 701 (2009). Here is part of the Introduction:

Academics are one group who consistently travel to other nations, and their tax burden is relatively heavy. Once preparation for an academic career is complete, however, academics abroad can take advantage of one very important tax benefit: income exclusion for U.S. tax purposes. Further, academics are not required to pay foreign taxes while residing abroad under many bilateral tax treaties negotiated by the Department of Treasury.

Thus, academics may receive one particular benefit that others, even business people, may not. The IRS has not welcomed the idea of academics working abroad, tax-free, because the purpose of this statutory exclusion in section 911 of the tax code was to assist American businesses competing abroad. Despite the resistance from the IRS, however, public policy and equity are good grounds for continued academic tax exclusion, and the Department of Treasury's tax treaties support exclusion.

This Note will explain some of the tax consequences of academic sabbaticals abroad. Specifically, Part II of this Note will provide a history of the applicable tax law, both congressional and administrative. Part III will consider various hypothetical academic situations, and Part IV will demonstrate how academics may benefit from tax laws. Finally, Part V will summarize the benefits and burdens of specific travel decisions.

John R. Dundon, EA - www.1040.com/jd - Taxpayer Advocate - Enrolled with the United States Department of Treasury to Practice before the IRS - Under contract with the United States Department of Treasury as a Certified ITIN Acceptance Agent - Direct phone # 720-234-1177