Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 72-54

1972-1 C.B. 213

Sec. 893

IRS Headnote

Compensation paid by a foreign municipality to a resident employee for services performed in the United States is considered wages paid by a foreign government within the meaning of section 893 of the Code.

Full Text

Rev. Rul. 72-54

A foreign municipality that is a political subdivision of a foreign government pays compensation to an employee who is a resident citizen of the foreign country for services performed for the municipality while the employee is present in the United States for purposes of observing and studying pollution control methods utilized by certain United States cities.

Held, compensation paid by the foreign municipality to the employee is considered to be wages paid by a foreign government within the meaning of section 893 of the Internal Revenue Code of 1954. Such wages for official services performed in the United States are exempt from taxation provided the conditions set forth in section 893 of the Code are otherwise met.