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

Date of Departure

Country On or after

Burundi July 13, 2003 Israel March 16, 2003 Kuwait March 16, 2003 Liberia June 6, 2003 Saudi Arabia May 13, 2003 Syria March 16, 2003

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. .03 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.

.04 For 2003, the Secretary of the Treasury in consultation with the Secretary of State has determined that war, civil unrest, or similar adverse conditions that precluded the normal conduct of business existed in the following countries beginning on the specified date:

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 Kuwait after March 16, 2003, are not eligible to qualify for the exception provided in § 911(d)(4) of the Code for taxable year 2003.

.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 meet

ing 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

2004-10 I.R.B. 562 March 8, 2004

.07 In order to assist those individuals who are filing prior year or amended tax returns, the Internal Revenue Service is re

Tax Year 2000—

publishing the countries listed for tax years gibility requirements of § 911(d)(1) of the 2000, 2001, and 2002 for which the eli- Code are waived under § 911(d)(4):

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

Tax Year 2002—

Date of Departure

Country On or after

Central African Republic October 31, 2002 Côte d’Ivoire October 18, 2002 Indonesia October 13, 2002 Madagascar April 13, 2002 Pakistan March 22, 2002 Venezuela December 20, 2002