rp-98-38.pdf

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Part III
26 CFR 601.105: Examination of returns and claims for refund,
credit, or abatement; determination of correct tax liability.
(Also Part I, § 911, 1.911-1)
Rev. Proc.
SECTION 1. PURPOSE
01. This revenue procedure provides information to any
individual who failed to meet the eligibility requirements of
§ 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 1997.
02. The Internal Revenue Service has previously listed
countries for which the eligibility requirements of § 911(d)(1)
of the Code are waived under § 911(d)(4) because of adverse
conditions in those countries during the time periods stated.
See Rev. Proc. 97-51, 1997-45 I.R.B. 9, Rev. Proc. 96-33, 1996-1
C.B. 720, and Rev. Proc. 95-45, 1995-2 C.B. 412. This revenue
procedure lists countries added to the list in 1997, for which
the eligibility requirements of § 911(d)(1) are waived. Rev.
Proc. 97-51, Rev. Proc. 96-33, and Rev. Proc. 95-45 remain in

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full force and effect; the periods listed therein are omitted
from this revenue procedure for brevity.
SEC. 2. BACKGROUND
01. Section 911(a) of the Code allows a "qualified
individual," as defined in § 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 § 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,

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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 1997, 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 countries beginning
on or after the specified periods:
Date of Departure
CountryOn or After
Albania March 12, 1997
Cambodia July 9, 1997
Central African Republic March 28, 1997
Democratic Republic of the Congo
(formerly Zaire) May 3, 1997
Republic of the Congo June 7, 1997
Sierra Leone May 28, 1997
Tajikistan November 26, 1997
.05 Accordingly, for purposes of § 911 of the Code, an
individual who left one of the foregoing countries on or after the
specified departure date shall be treated as a qualified individual
with respect to the period during which that individual was present
in, or was a bona fide resident of, such foreign country if the
individual establishes a reasonable expectation of meeting the
requirements of § 911(d) but for those conditions.
.06 To qualify for relief under § 911(d)(4) of the Code, an
individual must have established residency or have been physically
present in the foreign country on or prior to the date that the
Secretary of the Treasury determines that individuals were required to

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leave the foreign country. Individuals who establish residency or are
first physically present in the foreign country after the date that
the Secretary prescribes, shall not be treated as qualified
individuals under § 911(d)(4) of the Code pursuant to
§ 911(d)(4)(C). For example, individuals who are first physically
present in Albania after March 12, 1997, are not eligible to qualify
for the exemption prescribed in § 911(d)(4) of the Code.
.07 In order to assist those individuals who are filing prior
year or amended tax returns, the Internal Revenue Service is
republishing the country added to the list in 1996 for which the
eligibility requirements of § 911(d)(1) of the Code are waived under
§ 911(d)(4) for the year 1996:
Date of Departure
CountryOn or AfterOn or Before
Central African Republic May 21, 1996 September 12, 1996
No new departure dates were added to the list for tax years 1994 and
1995.
SEC. 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.
SEC. 4. EFFECT ON OTHER DOCUMENTS
Rev. Proc. 97-51, 1997-45 I.R.B. 9 is supplemented.
DRAFTING INFORMATION

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The principal author of this revenue procedure is Leslie B. van
der Wal of the Office of Associate Chief Counsel (International). For
further information regarding this revenue procedure contact Carl
Cooper on (202) 622-3840 (not a toll-free call).