SECTION 3. INTERIM RULES

Under the authority of section 7654(e), an individual income tax return filed under section 932(c)(2) with the U.S. Virgin Islands by a U.S. citizen or resident alien (USVI Form 1040) who takes the position that he or she is a bona fide resident of the U.S. Virgin Islands for the entire taxable year (or an individual who files a joint return for the taxable year with such an individual) will be deemed to be a U.S. income tax return of that individual for purposes of section 6501(a), provided that the IRS and BIR have entered into an agreement for the routine exchange of information satisfying the requirements of the Commissioner of the IRS. The Working Arrangement announced in section 2 of this notice satisfies this condition. Therefore, a return filed with the U.S. Virgin Islands under section 932(c)(2) will be deemed to be a U.S. income tax return for purposes of

section 6501(a) as described in this paragraph. In the event that the Working Arrangement is terminated and in the absence of a successor agreement, the interim rules provided in Notice 2007–19 will apply.

For example, assume that N, a U.S. citizen and calendar year taxpayer, takes the position that he is a bona fide resident of the U.S. Virgin Islands for the 2006 taxable year. On March 30, 2007, N files USVI Form 1040 (2006) with the U.S. Virgin Islands. N does not file Form 1040, U.S. Individual Income Tax Return (U.S. Form 1040), with the IRS (as described previously in Notice 2007–19). Under these circumstances and the rules provided in this notice, the 3-year period of limitations under section 6501(a) will expire on April 15, 2010, and the IRS will make no further assessment of income tax for N’s 2006 taxable year after that date except as otherwise authorized by section 6501.