ETI and IC-DISC export tax benefits for government contractors

As contracts for the Middle East and tsunami-ravaged areas are being awarded, government contractors, as well as traditional commercial exporters, find themselves exporting goods and services through defense, humanitarian and developmental programs sponsored directly or indirectly by the US. Unfortunately, government contractors have to jump through many hoops before they can enjoy the permanent tax savings available under the extraterritorial income exclusion regime or the interest-charge domestic international sales corporation regime. They must vet contracts to demonstrate eligibility, which requires close coordination between the tax function, accounting department and contract officers. Sometimes, this might require going back to the agency that awarded the contract for details on the bidding circumstances. And there will be times when contracts are classified and cannot be directly examined by tax and accounting personnel.