Rev. Rul. 64-285

Advice has been requested concerning the resident or nonresident alien status, for Federal income tax purposes, of a nonimmigrant alien of the class described in section 101(a)(15)(E)(i) of the Immigration and Nationality Act, 8 U.S.C. 1101(a)(15)(E)(i).

Section 101(a)(15)(E)(i) of the Act provides, in part and in effect, that an alien entitled to enter the United States under and in pursuance of the provisions of a treaty of commerce and navigation between the United States and the foreign state of which he is a national, and the spouse and children of any such alien if accompanying or following to join him, solely to carry on substantial trade, principally between the United States and the foreign state of which he is a national shall be classified as a nonimmigrant alien. An alien admitted to the United States as a nonimmigrant of the class described in section 101(a)(15)(E)(i) of the Act is admitted for a period of time fixed by the admitting officer. A nonimmigrant alien of this class is sometimes referred to as a "Treaty Trader."

Section 1.871-1 of the Income Tax Regulations provides, in part, that for Federal income tax purposes alien individuals are divided generally into two classes, namely, resident aliens and nonresident aliens. Resident aliens are, in general, taxable the same as citizens of the United States.

Section 1.871-2(b) of the regulations provides, in part, that an alien actually present in the United States who is not a mere transient or sojourner is a resident of the United States. Whether he is a transient is determined by his intentions with regard to the nature and length of his stay. If he lives in the United States and has no definite intention as to his stay, he is a resident. Where an alien comes to the United States for a definite purpose which is of such a nature that an extended stay may be necessary for its accomplishment, and to that end the alien makes his home temporarily in the United States, he becomes a resident, though it may be his intention at all times to return to his domicile abroad when the purpose for which he came has been consummated or abandoned.

O.D. 197, C.B. 1, 164 (1919), holds that if an alien has been residing in the United States for as much as one year there is a presumption that such alien is a resident of the United States and this presumption will be indulged for purposes of income taxes in the absence of known facts showing that the alien is, in fact, a transient. A year's presence in the United States by an alien does not, however, establish residence beyond a doubt. It merely raises a presumption of residence which may be rebutted by any proper evidence showing that the alien is, in fact, a transient; that is, a nonresident.

Accordingly, it is held that a nonimmigrant alien of the class described in section 101(a)(15)(E)(i) of the Act is considered a resident alien for Federal income tax purposes if he has been present in the United States for one full taxable year and, on the basis of the facts presented in the particular case, it can be shown that such alien is not a mere transient. If, however, he has not been present in the United States one full taxable year, he is presumed to be a nonresident alien.