The IRS Thinks We Are Transients

I can't figure out where my tax home is let alone where I want it to be. According to one publication our tax home is not in Germany because we came here for work that is temporary in nature (i.e. at the onset we expected it to be completed in one year or less). It turns out that temporary or indefinite are all a state of mind. If you think that you are going to be in a foreign country for less than a year but you end up staying longer ... you're temporary until you realize that you are staying past the 12 month mark. If you think that you are going to be in a foreign country for more than a year but you end up returning to the U.S. before the year is up then you are indefinite (and your tax home is abroad) until you realize that you will be going back to the U.S. early (at which time you will be temporary). Your status actually changes. You can have a tax home in Germany for 8 months (thinking you will be there for 2 years) and then in the 9th month you find out that you will be leaving in month 11. For the last two months you now have a tax home in the U.S.

Okay ... by this publication we clearly have our tax home in the U.S. But we have no home in the U.S., nor do we do any business in the U.S. so according to another publication ... out tax home is NOT in the U.S. Where is it?

There is actually a formal definition of itinerant worker (the publication clarifies this means transient) but we don't quite meet that definition either.