Monday, April 20, 2020

Physical Presence Tests for 2019 Waived for Several Countries

In a Rev Proc 2020-14, 2020-16 IRB 661, the IRS has waived the residency and presence tests that apply for purposes of the 2019 Code Sec. 911 foreign earned income and foreign housing cost exclusions with respect to certain U.S. individuals in the Democratic Republic of the Congo, Haiti, Iraq, Sudan and Venezuela, due to adverse conditions in those countries.
For 2019, the Treasury Secretary, in consultation with the Secretary of State, has determined that war, civil unrest, or similar adverse conditions precluded the normal conduct of business in the following countries beginning on the specified date:
  • Congo, Democratic Republic of the – January 13, 2019;
  • Haiti – February 14, 2019; 
  • Iraq – May 14, 2019; 
  • Sudan – April 11, 2019; and
  • Venezuela – January 24, 2019. 
For purposes of Code Sec. 911, an individual who left the Democratic Republic of Congo on or after January 13, 2019, will be treated as a qualified individual for the period during which that individual was present in, or was a bona fide resident of, the Democratic Republic of Congo if the individual establishes a reasonable expectation that he or she would have met the requirements of Code Sec. 911(d) but for those conditions.
To qualify for relief under section Code Sec. 911(d)(4), an individual must have established residency, or have been physically present, in the foreign country on or before the date that the Treasury Secretary determines that individuals were required to leave the foreign country. Thus, for example, individuals who were first physically present or established residency in the Democratic Republic of Congo after January 13, 2019, are not eligible to qualify for the exception provided in Code Sec. 911(d)(4) for tax year 2019.
 
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