Taxpayers qualifying for the exclusions who have filed their 2016 income tax returns should consider filing amended returns for that year. Because the 2017 housing amounts eligible for exclusion or deduction may also be used for 2016 tax returns, those taxpayers who excluded or deducted housing costs under Section 911 on their 2016 returns should consider amending their 2016 returns if the allowable amount increased for 2017. Reg. 301.91003(a) provides taxpayers the opportunity to correct the error assuming the taxpayer acted in good faith, as long as the interests of the Government are not prejudiced.9 Evidence of the taxpayer's good faith includes requesting relief prior to the IRS discovering the failure, failure due to intervening events beyond the control of the taxpayer, failure due to the taxpayer's lack of awareness of the need for the election (after exercising reasonable diligence), reasonable reliance on the written advice of the IRS, or reasonable reliance on a qualified tax professional who failed to make, or advise the taxpayer to make, the election.10 Limitations Section 911 (b)(1)(B (ii) excludes amounts "paid by the United States or an agency thereof to an employee of the United States or an agency thereof" from the definition of foreign earned income.11 This results in no foreign earned income exclusion for pay received by military and civilian employees of the U.S. or its agencies while working in a foreign country. Conclusion These annual updates to the housing exclusion/deduction and foreign earned income exclusion provide opportunities for eligible taxpayers to reduce their tax liability and, in some cases, obtain refunds of taxes paid in prior years.