Exceptions to the Bona Fide Residence and Physical Presence Tests
Exceptions to the Bona Fide Residence and Physical Presence Tests
There are two exceptions to meeting the requirements under the bona fide residence and physical presence tests. The exceptions are:
- Waiver of Time Requirements
- U.S. Travel Restrictions
What Is the Waiver of Time Requirement?
Both the bona fide residence test and the physical presence test contain minimum time requirements. However, minimum time requirements can be waived if you must leave a foreign country because of:
- War;
- Civil unrest; or
- Similar adverse conditions.
What Else Do I Have to Show for the Waiver of Time Requirement?
You also must be able to show that you reasonably could have expected to meet the minimum time requirements if not for the adverse conditions. To qualify for the waiver, you must actually have your tax home in the foreign country and be a bona fide resident of, or be physically present in, the foreign country on or before the beginning date of the waiver.
What Does the IRS Mean by U.S. Travel Restrictions?
Living in foreign countries in violation of U.S. law will not qualify you as a bona fide resident of a foreign country. Income from sources within such countries does not qualify as foreign earned income. Housing expenses in that country while you're in violation of the law cannot be included in figuring your foreign housing amount. Countries to which travel restrictions apply are as follows:
- Cuba
- Iraq
- Libya
Do I Need a Lawyer?
International Tax is a complex area of the law that an experienced attorney can help you with. You may want to consult a tax lawyer if you are unsure of your tax qualifications.
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Last Modified: 11-28-2011 04:36 PM PST
