Souza v. Commissioner

Frank Souza and Cecelia Souza, Petitioners, v. Commissioner of Internal Revenue, Respondent Souza v. Commissioner Docket No. 66156 United States Tax Court 33 T.C. 817; 1960 U.S. Tax Ct. LEXIS 211; February 8, 1960, Filed *211 Decision will be entered under Rule 50. 1. Frank Souza, captain of a fishing vessel, took his vessel to Peru and fished in the waters within 200 miles of the Peruvian coastline. Peru claimed sovereignty and jurisdiction over the waters adjoining its coast to a distance of 200 miles and confiscated vessels fishing therein without a Peruvian permit. Frank's operations were subjected to extensive regulation by the Peruvian Government. The executive branch of the United States Government does not recognize the Peruvian claims to sovereignty and jurisdiction beyond 3 miles from the Peruvian coast. Frank arrived in Peru June 7, 1953, and during 1953 and 1954 he spent some of his time ashore in Paita, Peru, part of his time fishing within 3 miles of Peru, and part of his time fishing beyond 3 miles off the coast of Peru, but within 200 miles of the coast. There is no proof that he spent 510 days ashore in Peru and fishing within 3 miles from Peru during 1953 and 1954. Held, that Frank was not present in a foreign country 510 days during the period in question within the provisions of section 911(a)(2), I.R.C. 1954, and therefore his earnings in 1953 and 1954 are not excludible*212 from gross income under the provisions of such section. 2. While fishing in the waters off Peru, Frank maintained a hotel room in Paita, Peru, where he kept his belongings when at sea, and where he stayed when in port and not aboard ship. Frank's wife and daughter, who lived at the family home in San Diego, California, visited him for 70 days in Peru during the summer of 1954, spending some of the time at his hotel and part of the time aboard the vessel. Held, Frank was not a bona fide resident of Peru during 1954. 3. Held, additions to tax under section 294(d)(1)(A), I.R.C. 1939, for failure to file declarations of estimated tax without reasonable cause sustained; additions to tax under section 294(d)(2) for substantial underestimation not sustained, Commissioner v. Acker, 361 U.S. 87, followed. Philip Crittenden, Esq., for the petitioners. Michael P. McLeod, Esq., for the respondent. Black, Judge. BLACK *818 The respondent determined deficiencies and additions to the petitioners' taxes under sections 294(d)(1)(A) and 294(d)(2), I.R.C. 1939, as follows: Additions to tax Year Deficiency Sec. 294(d)(1)(A) Sec. 294(d)(2) — 1953 — $ 211.10 $ 140.73 — 1954 — $ 5,715.62 550.55 367.02 *214 Petitioners claim a refund in the amount of $ 2,345.42 in tax paid for 1953. Respondent's disallowance of refund and determination of deficiency are explained in the statutory notice as follows: You claim that the net amount of $ 10,461.32 (consisting of $ 11,078.76 compensation for personal services while in Terra Colorado, Peru, less $ 617.44 loss from boat operation) reported on your return as taxable income should be excluded from income since you allegedly left the United States on May 1, 1953 and did not return until February 16, 1955. It has been determined that the amount of $ 10,461.32 was correctly included in gross income. Your claim for refund will, therefore, be disallowed in full. * * * * * * * You excluded from gross income from partnership interests the amount of $ 19,843.05, crew shares earned while working out of Terra Colorado, Peru. It has been determined that the amount of $ 19,843.05 represents taxable gross income and is not excludable from gross income under the provisions of section 911 of the Internal Revenue Code of 1954. Additions to the tax were explained in the notice as follows: Penalties have been asserted under the provisions of sections 294(d)(1)(A)*215 and 294(d)(2) of the Internal Revenue Act of 1939 for failure to file declarations of estimated tax and for substantial underestimation of estimated tax. The issues for decision are: (1) Whether petitioner Frank Souza was present in Peru for 510 days during 18 consecutive months so as to entitle him to exclusion from gross income of income earned there under section 911(a)(2) of the 1954 Code; *819 (2) Alternatively, whether petitioner Frank Souza was a bona fide resident of Peru during the entire year 1954 so as to entitle him to exclusion from gross income of income earned there during 1954 under section 911(a)(1) of the 1954 Code; and (3) Whether petitioners Frank Souza and Cecelia Souza are liable for additions to tax for failure to file a declaration of estimated tax and for substantial underestimation of estimated tax as provided in sections 294(d)(1)(A) and 294(d)(2), I.R.C. 1939. FINDINGS OF FACT. A stipulation of facts has been filed by the parties and is incorporated herein by this reference. Petitioners Frank Souza and Cecelia Souza are, and at all times material herein were, husband and wife. For the years 1953 and 1954 they filed timely joint income tax returns *216 with the director of internal revenue, Los Angeles, California. (For convenience, Frank Souza will hereinafter be referred to as petitioner.) During the years in issue, and for many years prior thereto, petitioner maintained a home in San Diego, California, in which he, his wife, and their daughter resided. Petitioner was captain and part owner of the fishing vessel, Sun Splendor, which operated under United States registry. The operating and majority owner of the vessel was Sun-Pacific, Inc., a California corporation, which operated a fish cannery in San Diego, and owned a number of other vessels which supplied the cannery with fish. Prior to May 2, 1953, the Sun Splendor had operated at a substantial loss. On that date, the vessel, with petitioner in command, departed San Diego for Paita, Peru, for the purpose of fishing in the waters off Peru under contract to deliver fish to Compania Pesquera Nor-Pacifico, S.A., a Peruvian subsidiary of Sun-Pacific, Inc. Petitioner brought his vessel into Paita, Peru, on June 7, 1953. From that time and until after December 31, 1954, the vessel fished the waters within 200 miles of the Peruvian coastline. During the years in issue, *217 the Government of Peru, as well as the Governments of Chile and Ecuador, claimed sovereignty and jurisdiction over the sea adjoining its coastline to a minimum distance of 200 nautical miles from its coastline. From time to time the Peruvian Government attempted to exercise jurisdiction in those waters, and in so doing confiscated a number of fishing vessels operating within those waters without a Peruvian permit. The executive department of the Government of the United States does not recognize the claim of Peru to sovereignty over the seas to a minimum of 200 miles from its coastline, but recognizes the sovereignty of Peru over waters to a distance of 3 miles from its coastline. *820 Petitioner's fishing operations in the waters within 200 miles of the Peruvian coastline were carried on under a Peruvian permit. Petitioner surrendered his ship's papers to the Port Captain of Paita, and operated under Peruvian papers. In accordance with Peruvian law, 80 per cent of his crew were Peruvians. During the periods involved, petitioner maintained a room at a hotel in Paita, Peru, where he kept his belongings while at sea, and stayed while in port and not aboard the vessel. Petitioner's*218 wife and daughter visited petitioner for 70 days during July, August, and September 1954. They stayed at the hotel where petitioner maintained his room except for two periods of an approximate total of 24 days when they were at sea with petitioner aboard the Sun Splendor, and a brief time which petitioner's wife spent in a hospital by reason of an intestinal illness. Prior to the visit of his wife and daughter, petitioner had concluded that there was no place in Paita or its environs which was fit for habitation by American women. Petitioner communicated this information to his wife. In applying for her passport to Peru, petitioner's wife stated that she intended to stay there for 3 months and that the purpose of her trip was to visit in that country. Neither petitioner nor his wife ever intended to make their home either temporarily or permanently in Peru. Petitioner was not a bona fide resident of Peru during 1954, nor was he present in Peru 510 days during the years in issue. Petitioner consulted with a licensed (not certified) public accountant before going to Peru with regard to taxation of income he might earn abroad. The accountant was accountant, or bookkeeper, for*219 Sun-Pacific, Inc., and for others. He was experienced in keeping accounts of fishing vessels, and aided in the preparation of income tax returns of many fishermen. Petitioner knew of his aid to others in the preparation of their income tax returns. This accountant advised petitioner that after he had spent 18 months in Peru he would have no United States income tax to pay on his earnings from fishing on the Sun Splendor. Petitioner's income tax returns for 1953 and 1954 are in evidence and neither of them is shown to have been prepared by the accountant who gave petitioner the above advice. It has been stipulated as follows: That Frank Souza arrived in Paita, Peru with the Sun Splendor on June 7, 1953; that he returned to San Diego, California on December 20, 1953; that he returned to Paita, Peru on January 14, 1954; that he returned to San Diego on February 14, 1955; that he returned to Paita, Peru on April 15, 1955; that he returned to the United States in January, 1957. That, except for the periods of time Frank Souza was in the United States as aforementioned, he was ashore in Peru or aboard the Sun Splendor fishing the waters within 200 miles of the coastlines of Peru*220 for the entire period from June 7, 1953 to after December 31, 1956. *821 That for each of the years, 1953 and 1954, Frank and Cecelia Souza did not file a declaration of estimated tax and made no payments of estimated tax. Petitioner's income as captain of the Sun Splendor was derived from his portion of the crew's share which was based upon tonnage of fish caught by the vessel. Petitioner received periodic (approximately every 2 or 3 months) accountings of these earnings. In 1953, petitioner's crew share from the Peruvian operation was $ 11,078.76, and in 1954 it was $ 19,843.05. Petitioners reported the full amount of the crew share in 1953 as taxable income on their return for that year. Subsequently, a claim for refund was filed in which such crew share was excluded from gross income on the ground that such amount was "entirely earned while employed and living in Terra Colorado, Peru." Petitioners, for the year 1954, did not report on their return Frank's crew share as gross income but treated it as being excludible under the income tax statute. Petitioner was a part owner of the Sun Splendor in the years in issue. As such, he received an annual statement of *221 the vessel's accounts from the operating owner, Sun-Pacific, Inc., approximately 2 months after the close of each calendar year. In 1953, petitioner suffered a net loss of $ 617.44 on the vessel's operations, and in 1954 received net income of $ 1,556.60, which petitioners reported on their return for that year. This operating statement of the Sun Splendor which petitioner received annually from the Sun-Pacific, Inc., had nothing to do with petitioner's crew share of the earnings. Petitioner reported other income in 1953 in the amount of $ 2,068.69, and in 1954, the amount of $ 3,603.20, in addition to the $ 1,556.60 from the operation of the Sun Splendor. Petitioners' failure to file declarations of estimated tax for 1953 and 1954 was not due to reasonable cause. OPINION. The first issue presented is whether, as petitioner contends, he was present in Peru for a period of 510 days during an 18-month period so as to entitle him to exclude under the provisions of section 911(a)(2) 1 of the Internal Revenue Code of 1954, 2 from *822 gross income earnings he received from sources outside the United States. Respondent has determined that petitioner was not present in Peru*222 or any foreign country when he was fishing more than 3, but less than 200, nautical miles from the shores of Peru. Petitioner argues that because Peru claimed sovereignty extending 200 miles into the Pacific Ocean from its shores, performed acts under color of such claim, and subjected petitioner to extensive regulation under such claims, he was within the territorial waters of and, consequently, in Peru. Alternatively, petitioner argues that should we hold against him as to the limits of the territorial waters of Peru, the facts and circumstances surrounding petitioner's presence in the waters within 200 miles of Peru were such as to render him present in Peru. Petitioner's argument that because he was fishing in the waters within 200 miles of Peru over which that nation claimed sovereignty, he was present in the territory of Peruvian sovereignty, cannot prevail. It is stipulated by the parties "[that] the Executive Department of the Government of the United States does not recognize the claim of Peru to sovereignty over the seas to a minimum of 200 miles from its coastlines, but recognizes the sovereignty of Peru over its waters to a distance of three miles from its coastlines." Further, we take judicial notice 3 of the facts that the executive branch in its conduct of foreign affairs has traditionally denied asserted extensions by foreign countries of territorial waters beyond 3 miles, 4*225 and that the executive branch protested the extension claimed by Peru. 5Congress, also, *224 denied such claims in enacting a bill, 22 U.S.C. sections 1971-1976, for the protection of American-flag vessels seized by foreign countries. 6 These facts preclude us from finding that petitioner was within the territorial waters of Peru when he was fishing in waters within 200 *823 miles of the Peruvian coastline but not within 3 miles of the Peruvian coastline. The governing principle of law has an early judicial origin and is rooted in the basic concept of the division of powers upon which the Constitution of the United*226 States is founded. The determination of the boundaries of nations is a matter of foreign affairs which is the function of the political departments of government, not the judicial. Foster v. Neilson, 2. Pet. 253, 307 (1829). Courts may not grant that recognition of an alleged territorial extension of sovereignty by a foreign country which the executive branch of government withholds. Williams v. Suffolk Insurance Co., 13 Pet. 415, 420 (1839). Petitioner was not physically present within the territorial limits of Peru, when fishing in waters beyond 3 miles from the Peruvian coastline. Petitioner's main contention in this respect is not sustained. Turning to petitioner's alternative argument that the facts and circumstances surrounding his presence in waters within 200 miles of the Peruvian coastline justify a finding that he was constructively present in Peru, despite our conclusion that Peruvian territorial waters extend only 3 miles from that nation's coastline, we find that petitioner cannot prevail on this ground. The substance of petitioner's contention is that because his operations were based in Peru, and were at all times subject*227 to extensive de facto, if not de jure, regulation by the Peruvian Government so long as he fished within 200 miles of Peru, he was constructively present within the territorial limits of Peru although physically outside those limits. In construing an earlier provision 7 for the exclusion of earnings abroad from gross income, it was concluded that the physical presence of the taxpayer was the factor determinative of his geographical location. Hoofnel v. Commissioner, 166 F. 2d 504 (C.A. 9), affirming 7 T.C. 1136, certiorari denied 334 U.S. 833. In its ordinary acceptation, the word "present" connotes physical location. Cf. Webster's New International Dictionary (2d ed. rev. 1950). Only by the operation of some amiable legal fiction can one who is physically 197 miles outside a country be present in that country. We do not find that Congress intended that the metaphysical concept of constructive presence should prevail in such a situation. *228 We hold, therefore, that petitioner has failed to prove that he was present in Peru during 1953 and 1954 for 510 days during 18 consecutive months within the intendment of section 911(a)(2). The second question arising herein is whether petitioner was a bona fide resident of Peru for an uninterrupted period which includes all *824 of 1954 within the provisions of section 911(a)(1)8*230 of the 1954 Code. 9 This affects only the taxable year 1954. The statute does not define the term, "bona fide resident." In Regulations 118, section 39.116-1(a)(2), the term is explicated by reference to sections 39.211-2 through 39.211-6, relating to the residence or nonresidence of aliens in the United States. An apt paraphrasing of section 39.211-2 (formerly section 29.211-2, Regulations 111), rendered in Weible v. United States, 244 F. 2d 158 (C.A. 9), as it applies in determining the residence or nonresidence of citizens of the United States in foreign countries, is set forth marginally. 10*231 Within the intent of section 911(a)(1), a taxpayer need not be a domiciliary of a foreign country or countries to qualify as a resident thereof. Weible v. United States, supra.*229 Conversely, mere physical presence in a foreign country for the specified period of time does not qualify a taxpayer as a resident of a foreign country within the ambit of section 911(a)(1). Downes v. Commissioner, 166 F. 2d 504 (C.A. 9), affirming 7 T.C. 1053. If the latter were not so, the enactment would have been an empty deed and the words of the report by the Senate Finance Committee 11 meaningless phrases. *825 The petitioner has established that he was engaged in fishing operations conducted from a base in Paita, Peru, from June 7, 1953, until January 1957. These operations were conducted under permits issued by the Peruvian Government, in accordance with Peruvian regulations, subject to Peruvian supervision. As required by that country, 80 per cent of the crew of the ship petitioner captained was composed of Peruvian citizens. Petitioner was required by the Peruvian Government to surrender his ship's papers and his passport, and to conduct operations and travel under Peruvian papers. He maintained a*232 room in a hotel in Paita in which he kept his personal effects and in which he stayed when his presence was not required on board the vessel. Petitioner's wife and daughter, whose residence was in San Diego, California, visited with him for a period of 70 days during 1954, of which they spent 24 days on board the vessel with petitioner and the remainder in the hotel in which petitioner maintained a room. Undoubtedly, petitioner's wife and daughter continued to reside in San Diego throughout the years 1953 and 1954. It is doubtless true that petitioner could have been a resident of Peru in those years and his wife and daughter could have continued to reside in San Diego. One does not have to change his domicile to change his residence. Herman Frederick Baehre, 15 T.C. 236. In that case, we said: "Petitioner does not contend that he changed his domicile or had any intention of doing so; however, a change of domicile is not necessary to come within the provisions of section 116(a)(1) [the same as section 911(a)(1), I.R.C. 1954]." We held that during the period in question Baehre had become a bona fide resident of Canada. However, in the Baehre*233 case the facts show that soon after he went to Canada he gave up his residence in the United States, took his furniture and possessions there; also, his wife came and they rented a residence in Canada and lived there until sometime in 1944, when they returned to the United States. We have no comparable facts in the instant case. Petitioner, we think, has failed completely to show that he was subjected to any greater burdens or responsibilities than those to which a transient or sojourning fishing captain would have been subjected. He has shown no social or economic contacts with Peru which a nonresident captain could not show. In short, he has shown little or nothing more than mere presence in Peru as the captain of an operating fishing vessel during the taxable years in question. We conclude, therefore, that petitioner has failed to prove by a preponderance of the evidence that he was a bona fide resident of Peru for the taxable year 1954, and sustain respondent's determination that his income earned in Peru is not excludible from gross income under section 911(a)(1). Cf. Downs v. Commissioner, supra. The third issue presented is whether respondent correctly determined*234 additions to the tax for the taxable years here involved under *826 section 294(d)(1)(A) of the 1939 Code 12 for failure to file a declaration of estimated tax and under section 294(d)(2) for substantial underestimation of estimated tax. It is stipulated that petitioner did not file a declaration of estimated tax for either year here involved. In the consideration of this issue as to section 294(d)(1)(A) additions to tax, it is important to inquire who were required to file a declaration of estimated tax in 1953 and 1954. Section 58, I.R.C. 1939, as applicable to petitioner's taxable years reads, in part, as follows: SEC. 58. DECLARATION OF ESTIMATED TAX BY INDIVIDUALS. (a) Requirement of Declaration. -- Every individual * * * shall, at the time prescribed in subsection (d), make a declaration of his estimated tax for the taxable year if -- (1) his gross income from wages * * * can reasonably be expected to exceed the sum of $ 4,500 plus $ 600 with respect to each exemption provided in section 25(b); or (2) his gross income from sources other than wages * * * can reasonably be expected to exceed $ 100 for the taxable year and his gross income to be $ 600 or more. *235 Petitioner contends that in failing so to file, he relied upon the advice of a licensed public accountant that no estimate was required of him. We are unable to find that the accountant gave such advice; the accountant did not testify. Petitioner testified only that the accountant told him that if he should*236 remain in Peru for 510 days during a period of 18 months he would not have to pay taxes on income earned there. There is no testimony that the accountant told petitioner he would not have to estimate his tax. We do not find, therefore, that petitioner failed to file estimates because he relied upon the advice of a competent adviser. Even if it be assumed that petitioner was entirely ignorant of the requirements for filing declarations of estimated tax, that fact would not establish reasonable cause for failure to file declaration of estimated tax. See Walter M. Joyce, 25 T.C. 13; Andre Picard, 28 T.C. 955. In the latter case, we said: That ignorance of the law does not amount to reasonable cause, for the purposes herein, has previously been considered and decided by this Court contrary to the contention of the petitioners, and their contention is likewise denied here. Walter M. Joyce, 25 T.C. 13. * * * Petitioner further contends that he was justified in failing to file estimations because it was impossible for him to know his income *827 until he received a statement of income*237 from Sun-Pacific, Inc., following the completion of the calendar year's business operations. Petitioner, as captain of a fishing vessel, knew the size of his catches and he knew that he was to be paid a captain's share. Petitioner's wife was authorized to draw $ 300 per month against his earnings and petitioner made further drawings in Peru against his earnings. Those earnings in fact amounted to a little more than $ 11,000 in 1953 and almost $ 20,000 in 1954. While it is true that petitioner, as part owner of the vessel, might and did suffer a deductible loss from the vessel's operations, this loss would serve to reduce petitioner's tax but not his gross income, which is the yardstick by which a taxpayer judges whether he must file an estimate under section 58 of the 1939 Code (now section 6015 of the 1954 Code). Additionally, petitioner received other income in an amount slightly in excess of $ 2,000 in 1953 and of $ 3,000 in 1954. With gross income of approximately $ 13,000 in 1953 and $ 22,000 in 1954, we cannot conclude that petitioner could not reasonably expect that his gross income would exceed the minimum requirements of section 58. Respondent has determined additions*238 to the taxes of petitioner for both failure to estimate and substantial underestimation. Pursuant to the decision in Commissioner v. Acker, 361 U.S. 87, we hold that the addition for substantial underestimation may not be imposed where no declaration of estimate was filed. We sustain respondent's determination of additions to taxes for failure to file declarations of estimated tax without reasonable cause and do not sustain additions for substantial underestimation. Decision will be entered under Rule 50. Footnotes 1. SEC. 911. EARNED INCOME FROM SOURCES WITHOUT THE UNITED STATES. (a) General Rule. -- The following items shall not be included in gross income and shall be exempt from taxation under this subtitle: * * * * (2) Presence in foreign country for 17 months. -- In the case of an individual citizen of the United States, who during any period of 18 consecutive months is present in a foreign country or countries during at least 510 full days in such period, amounts received from sources without the United States (except amounts paid by the United States or an agency thereof) if such amounts constitute earned income (as defined in subsection (b)) attributable to such period; * * *↩ 2. So far as pertinent here the provisions of section 911(a) of the 1954 Code are the same in effect as those of section 116(a)↩ of the 1939 Code. References to the one are equally applicable to the other, and cases interpreting the one are equally interpretive of the other. 3. "All courts of justice are bound to take judicial notice of the territorial extent of the jurisdiction exercised by the government whose laws they administer, or of its recognition or denial of the sovereignty of a foreign power, as appearing from the public acts of the legislature and executive, although those acts are not formally put in evidence, nor in accord with the pleadings." Jones v. United States, 137 U.S. 202, 214↩. 4. "We have made it clear from the beginning that in our view the 3-mile rule is and will continue to be established international law, to which we adhere. * * * Furthermore, we have made it clear that in our view there is no obligation on the part of states adhering to the 3-mile rule to recognize claims on the part of other states to a greater breadth of territorial sea." Closing statement by the chairman of the United States delegation to the United Nations Conference on the Law of the Sea, 38 Dept. State Bull. 1110, 1111.↩ 5. See 32 Dept. State Bull. 935.↩ 6. See S. Rept. No. 2214, 83d Cong., 2d Sess. (1954), which states, inter alia: "The traditional policy of the United States is to support the principle of the freedom of the seas, and to this end this country does not recognize claims to jurisdiction over alleged territorial waters greater in breadth than three marine miles from the coast. * * * [The] need for legislation at this time has developed from seizures of American-flag fishing vessels which have taken place in the last several years as the result of extravagant territorial claims which are strictly contrary to the traditional position of the United States with regard to the seaward limits of national jurisdiction."↩ 7. Sec. 116(a), I.R.C. 1939↩. 8. SEC. 911. EARNED INCOME FROM SOURCES WITHOUT THE UNITED STATES. (a) General Rule. -- The following items shall not be included in gross income and shall be exempt from taxation under this subtitle: (1) Bona fide resident of foreign country. -- In the case of an individual citizen of the United States, who establishes to the satisfaction of the Secretary or his delegate that he has been a bona fide resident of a foreign country or countries for an uninterrupted period which includes an entire taxable year, amounts received from sources without the United States (except amounts paid by the United States or any agency thereof) if such amounts constitute earned income (as defined in subsection (b)) attributable to such period; * * *↩ 9. See footnote 2, supra↩. 10. "Section 29.211-2 being the definition of a nonresident alien we have taken the liberty of rewording and restating it so as to make it directly applicable to a bona fide resident of a foreign country, as the expression is used in Section 29.116-1. To do this we have excluded certain of the words appearing in Section 29.211-2 (which appear in brackets) and have inserted appropriate conforming words (appearing in italics). "'(An Alien) A citizen of the United States actually present in (the United States) a foreign country or countries who is not a mere transient or sojourner is a bona fide resident of (the United States) a foreign country or countries for the purposes of the income tax exemption provided for in Section 116. Whether he is a transient is determined by his intentions with regard to the length and nature of his stay. A mere floating intention, indefinite as to time is not sufficient to constitute him a transient. If he lives in (the United States) a foreign country or countries and has no definite intention as to his stay, he is a resident. One who goes to (the United States) a foreign country or countries 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) citizen, makes his home temporarily (in the United States) abroad he becomes a foreign resident, though it may be his intention at all times to return to his domicile (abroad) in the United States when the purpose for which he (came) left the United States↩, has been consummated or abandoned. * * *'" 11. "[The] term 'bona fide' residence abroad has been construed quite strictly with the result that many persons who have gone abroad to work even for a relatively long period of time have been unable to meet the test of a 'bona fide resident' of a foreign country. Sometimes this has occurred because the nature of the individual's work is such as to make it difficult to establish a 'residence' in the more widely accepted use of the term." S. Rept. No. 781, 82d Cong., 1st Sess. (1951), p. 53.↩ 12. SEC. 294. ADDITIONS TO THE TAX IN CASE OF NONPAYMENT. (d) Estimated Tax. -- (1) Failure to file declaration or pay installment of estimated tax. -- (A) Failure to File Declaration. -- In the case of a failure to make and file a declaration of estimated tax within the time prescribed, unless such failure is shown to the satisfaction of the Commissioner to be due to reasonable cause and not to willful neglect, there shall be added to the tax 5 per centum of each installment due but unpaid, and in addition, with respect to each such installment due but unpaid, 1 per centum of the unpaid amount thereof for each month (except the first) or fraction thereof during which such amount remains unpaid. * * *↩