Rev. Rul. 80-170

ISSUE

Is a nonresident alien spouse of a United States citizen, who joins with such citizen in making an election under section 6013(g) of the Internal Revenue Code to be treated as a United States resident, eligible for the deduction provided in section 913(a)(2) for certain expenses of living abroad, under the circumstances described below?

FACTS

A, a citizen and resident of foreign country X, is a nonresident alien spouse of a United States citizen. In 1979, A received compensation for personal services that would qualify as earned income within the meaning of section 913(j)(1)(A) of the Code for purposes of the deduction from gross income provided by section 913(a)(2), if A were a citizen or resident of the United States. A also had certain expenses of living abroad that are within the scope of section 913(b). A and A's spouse properly made an election under section 6013(g) for taxable year 1979.

LAW AND ANALYSIS

Section 6013(g) of the Code provides an election whereby a United States citizen or resident married to a nonresident alien may file a joint return for taxable years ending on or after December 31, 1975. This election specifically provides that the nonresident alien be treated as a resident of the United States for purposes of federal income taxation (chapter 1 of the Code). Therefore, such alien is taxable on worldwide income. Section 6013(g)(1).

Section 913(a)(2) of the Code, which is effective for taxable years beginning after December 31, 1977, provides that in the case of an individual who is a citizen or resident of the United States, and who during any period of 18 consecutive months is present in a foreign country or countries during at least 510 full days in such period, there shall be allowed certain specified deductions for any taxable year which contains part of such period.

Section 6013(g)(1) of the Code expressly provides that an electing nonresident alien who is married to an electing United States citizen or resident alien "shall be treated as a resident of the United States for purposes of chapter . . . 1." Section 913(a)(2), which is expressly applicable to United States citizens or residents, is part of chapter 1.

A, as a result of making an election with A's spouse under section 6013(g) of the Code to be treated as a United States resident for purposes of chapter 1 of the Code, thus is eligible for the deduction provided by section 913(a)(2) to the extent A otherwise meets the requirements of that section.

HOLDING

A nonresident alien spouse of a United States citizen, who joins with such citizen in making an election under section 6013(g) of the Code to be treated as a United States resident, is eligible for the deduction provided in section 913(a)(2) for certain expenses of living abroad, under the circumstances described above.

The holding of this revenue ruling is equally applicable to such nonresident alien's eligibility for the earned income exclusion for residents of camps located in hardship areas provided in section 911(a)(2) of the Code, effective for taxable years beginning after December 31, 1977. This effective date is extended to December 31, 1978, if a timely election is made to use the provisions of section 911 as in effect prior to its amendment by the Foreign Earned Income Act of 1978 (the "FEIA"), Pub. L. 95-615, 92 Stat. 3109, 1978-2 C.B. 416, as provided in section 209(c) of the FEIA. For taxable years to which the provisions of section 911 apply, as in effect prior to its amendment by the FEIA, a nonresident alien spouse of a United States citizen or resident, who elects to be treated as a United States resident pursuant to 6013(g), is eligible for the section 911 exclusion, pursuant to Rev. Rul. 72-330, 1972-2 C.B. 444, as amplified by Rev. Rul. 72-598, 1972-2 C.B. 451, if the nonresident alien spouse is a citizen of one of the foreign countries listed in these revenue rulings with which the United States has an income tax treaty in effect.