IRS Revenue Procedure
2002-20

Code Sec. 911



<<FULL TEXT>>

26 CFR 601.105: Examination of returns and claims for refund, credit, or
abatement; determination of correct tax liability.
(Also Part I, section 911, 1.911-1)


REV. PROC. 2002-20

SECTION 1. PURPOSE

01. This revenue procedure provides information to any individual who
failed to meet the eligibility requirements of section 911(d)(1) of the
Internal Revenue Code because adverse conditions in a foreign country
precluded the individual from meeting those requirements for taxable year
2001.

02. The Internal Revenue Service has previously listed countries for
which the eligibility requirements of section 911(d)(1) of the Code are
waived under section 911(d)(4) because of adverse conditions in those
countries on and after the date stated. See Rev. Proc. 2001-27 (2001-19
I.R.B. 1155), Rev. Proc. 2000-14 (2000-1 C.B. 960), and Rev. Proc. 99-20
(1999-1 C.B. 872). This revenue procedure lists the country added to the
list in 2001, for which the eligibility requirements of section 911(d)(1)
are waived. Rev. Proc. 2001-27, Rev. Proc. 2000-14, and Rev. Proc. 99-20
remain in full force and effect.


SECTION 2. BACKGROUND

01. Section 911(a) of the Code allows a "qualified individual," as
defined in section 911(d)(1), to exclude foreign earned income and housing
cost amounts from gross income. Section 911(c)(3) of the Code allows a
qualified individual to deduct housing cost amounts from gross income.

02. Section 911(d)(1) of the Code defines the term "qualified
individual" as an individual whose tax home is in a foreign country and
who is (A) a citizen of the United States and establishes to the
satisfaction of the Secretary of the Treasury that the individual has been
a bona fide resident of a foreign country or countries for an
uninterrupted period that includes an entire taxable year, or (B) a
citizen or resident of the United States who, during any period of 12
consecutive months, is present in a foreign country or countries during at
least 330 full days.

03. Section 911(d)(4) of the Code provides an exception to the
eligibility requirements of section 911(d)(1). An individual will be
treated as a qualified individual with respect to a period in which the
individual was a bona fide resident of, or was present in, a foreign
country if the individual left the country during a period for which the
Secretary of the Treasury, after consultation with the Secretary of State,
determines that individuals were required to leave because of war, civil
unrest, or similar adverse conditions that precluded the normal conduct of
business. An individual must establish that but for those conditions the
individual could reasonably have been expected to meet the eligibility
requirements.

04. For 2001, the Secretary of the Treasury in consultation with the
Secretary of State, has determined that war, civil unrest, or similar
adverse conditions that precluded the normal conduct of business existed
in the following country beginning on the specified date:

Date of Departure

Country On or After
------- -----------
Macedonia July 27, 2001


05. Accordingly, for purposes of section 911 of the Code, an individual
who left Macedonia on or after July 27, 2001, shall be treated for 2001 as
a qualified individual with respect to the period during which that
individual was present in, or was a bona fide resident of Macedonia, if
the individual establishes a reasonable expectation of meeting the
requirements of section 911(d) but for those conditions.

06. To qualify for relief under section 911(d)(4) of the Code, an
individual must have established residency on or prior to July 27, 2001,
or have been physically present in Macedonia on July 27, 2001, the date
that the Secretary of the Treasury determined that individuals were
required to leave the foreign country. Individuals who establish residency
or are first physically present in Macedonia after July 27, 2001, shall
not be treated as qualified individuals under section 911(d)(4) of the
Code for taxable year 2001.

07. In order to assist those individuals who are filing prior year or
amended tax returns, the Internal Revenue Service is republishing the
countries listed for tax years 1998, 1999, and 2000, for which the
eligibility requirements of section 911(d)(1) of the Code are waived under
section 911(d)(4):

Tax Year 1998--

Date of Departure

Country On or After
------- -----------
Albania August 14, 1998
Democratic Republic of the Congo August 5, 1998
Eritrea June 5, 1998
Guinea-Bissau June 10, 1998
Indonesia May 15, 1998
Pakistan August 16, 1998
Sierra Leone December 23, 1998
Serbia-Montenegro October 11, 1998


Tax Year 1999--

Date of Departure

Country On or After
------- -----------
Eritrea February 12, 1999
Ethiopia February 12, 1999
Serbia-Montenegro March 20, 1999


Tax Year 2000--

Date of Departure

Country On or After
------- -----------
Eritrea May 19, 2000


SECTION 3. INQUIRIES

A taxpayer who needs assistance on how to claim this exclusion, or on
how to file an amended return, should contact a local IRS Office or, for a
taxpayer residing or traveling outside the United States, the nearest
overseas IRS office.


SECTION 4. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 2001-27 (2001-19 I.R.B. 1155) is supplemented.


DRAFTING INFORMATION

The principal author of this revenue procedure is Kate Y. Hwa of the
Office of Associate Chief Counsel (International). For further information
regarding this revenue procedure contact Ms. Hwa at (202) 622-3840 (not a
toll-free call).

<<END RULING>>


 

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