A recent report advises U.S. citizens that, although up to $80,000 of income earned in a "foreign country" can normally be excluded from taxable income, that does not apply if you earned the money in Antarctica.
Antarctica, which is not technically in the United States (although I’m pretty sure I saw a chunk of it floating by the California coast the other day), may seem relatively foreign. But the IRS ruled in Arnett v. Commissioner that it is not a "foreign country," at least for tax purposes. (It is considered "foreign" for other purposes, most of which seem to involve requests for a government to do something down there.) The law in question, the agency ruled, was only intended to protect people from being taxed twice on foreign-earned income. Since there is no government in Antarctica — as far as we know — the danger of double-taxation does not exist.
Bad news for David Arnett, a Wisconsin resident who had worked at McMurdo Station, the largest U.S. base on the continent, on the coast of the Ross Sea. Arnett was looking to exclude almost $50,000 that he earned while working down there for Raytheon, but the IRS said no — proving that it will pursue taxpayers to the ends of the earth, or at least the south end.
If you are looking to visit McMurdo Station, which you should do in the summer, go to New Zealand, turn left, and then go another 2200 miles south. Upwards of 1000 people live and work most of the year at McMurdo, probably freezing their asses off but now slightly warmed by the knowledge that they at least are not being double-taxed.
Link: Legal Satyricon
Link: National Science Foundation