SEC. 2. BACKGROUND

1. 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.

2. 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.

3. 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.

4. For 2000, the Secretary of the Treasury in consultation with the Secretary of State, has determined that war, civil unrest, or similar adverse condi

Congo June 7, 1997 Sierra Leone May 28, 1997 Tajikistan November 26, 1997

tions that precluded the normal conduct of business existed in the following country beginning on or after the specified date:

Date of Departure Country On or After

Eritrea May 19, 2000

5. Accordingly, for purposes of § 911 of the Code, an individual who left the foregoing country 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.

6. 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 Eritrea after May 19, 2000, are not eligible to qualify for the exemption prescribed in § 911(d)(4) of the Code for taxable year 2000.

7. In order to assist those individuals who are filing prior year or amended tax returns, the Internal Revenue Service is republishing the countries listed for tax years 1997, 1998, and 1999, for which the eligibility requirements of § 911(d)(1) of the Code are waived under §911(d)(4):

Tax Year 1997 Date of Departure Country On or After

Tax Year 1999 Date of Departure Country On or After

Eritrea February 12, 1999 Ethiopia February 12, 1999 Serbia Montenegro March 20, 1999