rp-99-20.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. 99-20

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 1998.

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 on and after the date stated. See
Rev. Proc. 98-38, 1998-27 I.R.B. 29, Rev. Proc. 97-51, 1997-2
C.B. 526, and Rev. Proc. 96-33, 1996-1 C.B. 720. This revenue
procedure lists countries added to the list in 1998, for which
the eligibility requirements of § 911 (d) (1) are waived. Rev.
Proc. 98-38, Rev. Proc. 97-51, and Rev. Proc. 96-33 remain in
full force and effect.

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

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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,
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 1998, 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

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on or after the specified dates:

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

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 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 August 14,
1998, are not eligible to qualify for the exemption prescribed in

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§ 911 (d) (4) of the Code for taxable year 1998.

07\. In order to assist those individuals who are filing
prior year or amended tax returns, the Internal Revenue Service
is republishing the countries added to the list for tax years
1995, 1996 and 1997, for which the eligibility requirements of §
911 (d) (1) of the Code are waived under $ 911 (d) (4) :

Tax Year 1995 - No new departure dates were added to the
list.

Tax Year 1996 -

Date of Departure

Country
On or After

On or Before

Central African
Republic
May 21, 1996

September 12, 1996

Tax Year 1997 -

Date of Departure

Country

On or After

Albania

March 12,1997

Cambodia

July 9, 1997

Central African Republic

March 28, 1997

Democratic Republic of the Congo

May 3, 1997

Republic of the Congo

June 7, 1997
May 28, 1997
November 26, 1997

Sierra Leone

Tajikistan

## SEC. 3. INQUIRES

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. 98-38, 1998-27 I.R.B. 29 is supplemented.

DRAFTING INFORMATION

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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) .