SECTION 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 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.

Date of Departure Country On or after Central African Republic 10/31/02 Côte d’Ivoire 10/18/02 Indonesia 10/13/02 Madagascar 04/13/02 Pakistan 03/22/02 Venezuela 12/20/02

.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. For example, individuals who are first physically present in the Central African Republic after October 31, 2002, are not

eligible to qualify for the exception provided in § 911(d)(4) of the Code for taxable year 2002.

.07 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 1999, 2000, and 2001, for which the eligibility requirements of § 911(d)(1) of the Code are waived under § 911(d)(4):

2003–13 I.R.B. 666 March 31, 2003

Tax Year 1999—

Date of Departure Country On or after Eritrea February 12, 1999 Ethiopia February 12, 1999 Serbia-Montenegro March 20, 1999

Tax Year 2000—

Date of Departure Country On or after Eritrea May 19, 2000

Tax Year 2001—

Date of Departure Country On or after Macedonia July 27, 2001