[Code of Federal Regulations]
[Title 26, Volume 10]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.911-7]

[Page 29-31]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.911-7  Procedural rules.

    (a) Elections of a qualified individual --(1) In general. In order 
to receive either exclusion provided by section 911(a), a qualified 
individual must elect, separately with respect to each exclusion, to 
exclude foreign earned income under section 911(a)(1) and the housing 
cost amount under section 911(a)(2). Any such elections may be made on 
Form 2555 or on a comparable form. Each election must be filed either 
with the income tax return, or with an amended return, for the first 
taxable year of the individual for which the election is to be 
effective. An election once made remains in effect for that year and all 
subsequent years unless revoked under paragraph (b) of this section. 
Each election shall contain information sufficient to determine whether 
the individual is a qualified individual as provided in Sec. 1.911-2. 
The statement shall include the following information:
    (i) The individual's name, address, and social security number;
    (ii) The name of the individual's employer;
    (iii) Whether the individual claimed exclusions under section 911 
for earlier years after 1981 and within the five preceding taxable 
years;
    (iv) Whether the individual has revoked a previously made election 
and the taxable year for which such revocation was effective;
    (v) The exclusion or exclusions the individual is electing;
    (vi) The foreign country or countries in which the individual's tax 
home is located and the date when such tax home was established;
    (vii) The status (either bona fide residence or physical presence) 
under which the individual claims the exclusion;
    (viii) The individual's qualifying period of residence or presence;
    (ix) The individual's foreign earned income for the taxable year 
including the fair market value of all noncash remuneration; and,
    (x) If the individual elects to exclude the housing cost amount, the 
individual's housing expenses.
    (2) Requirement of a return--(i) In general. In order to make a 
valid election under this paragraph (a), the election must be made:
    (A) With an income tax return that is timely filed (including any 
extensions of time to file),
    (B) With a later return filed within the period prescribed in 
section 6511(a) amending the foregoing timely filed income tax return,
    (C) With an original income tax return that is filed within one year 
after the due date of the return (determined without regard to any 
extension of time to file); this one year period does not constitute an 
extension of time for any purpose--it is merely a period during which a 
valid election may be made on a late return, or
    (D) With an income tax return filed after the period described in 
paragraphs (a)(2)(i)(A), (B), or (C) of this section provided--
    (1) The taxpayer owes no federal income tax after taking into 
account the exclusion and files Form 1040 with Form 2555 or a comparable 
form attached either before or after the Internal Revenue Service 
discovers that the taxpayer failed to elect the exclusion; or
    (2) The taxpayer owes federal income tax after taking into account 
the exclusion and files Form 1040 with Form 2555 or a comparable form 
attached before the Internal Revenue Service discovers that the taxpayer 
failed to elect the exclusion.
    (3) A taxpayer filing an income tax return pursuant to paragraph 
(a)(2)(i)(D)(1) or (2) of this section must type or legibly print the 
following statement at the top of the first page of the Form 1040: 
``Filed Pursuant to Section 1.911-7(a)(2)(i)(D).''
    (ii) Election for 1982 and 1983 taxable years. Solely for purposes 
of paragraph (a)(2)(i)(A) of this section, an income tax return for any 
taxable year beginning before January 1, 1984, shall be considered 
timely filed if it is filed on or before July 23, 1985.

[[Page 30]]

    (3) Housing cost amount deduction. An individual does not have to 
make an election in order to claim the housing cost amount deduction. 
However, such individual must provide the Commissioner with information 
sufficient to determine the individual's correct amount of tax. Such 
information shall include the following: The individual's name, address, 
and social security number; the name of the individual's employer; the 
foreign country in which the individual's tax home was established; the 
status under which the individual claims the deduction; the individual's 
qualifying period of residence or presence; the individual's foreign 
earned income for the taxable year; and the individual's housing 
expenses.
    (4) Effect of immaterial error or omission. An inadvertent error or 
omission of information required to be provided to make an election 
under this paragraph (a) shall not render the election invalid if the 
error or omission is not material in determining whether the individual 
is a qualified individual or whether the individual intends to make the 
election.
    (b) Revocation of election--(1) In general. An individual may revoke 
any election made under paragraph (a) of this section for any taxable 
year. A revocation must be made separately with respect to each 
election. The individual may revoke an election for any taxable year, 
including the first taxable year for which an election was effective, by 
filing a statement that the individual is revoking one or more of the 
previously made elections. The statement must be filed with the income 
tax return, or with an amended return, for the first taxable year of the 
individual for which the revocation is to be effective. A revocation 
once made is effective for that year and all subsequent years. If an 
election is revoked for any taxable year, including the first taxable 
year for which the election was effective, the individual may not, 
without the consent of the Commissioner, again make the same election 
until the sixth taxable year following the taxable year for which the 
revocation was first effective. For example, a qualified individual 
makes an election to exclude foreign earned income under section 
911(a)(1) and files it with his 1982 income tax return. The individual 
files 1983 and 1984 income tax returns on which he excludes his foreign 
earned income. Then, within 3 years after filing his 1982 income tax 
return, the individual files an amended 1982 income tax return with a 
statement revoking his election to exclude foreign earned income under 
section 911(a)(1). The revocation of the election is effective for 
taxable years 1982, 1983, and 1984. The individual may not elect to 
exclude income under section 911(a)(1) for any taxable year before 1988, 
unless he obtains consent to reelect under paragraph (b)(2) of this 
section.
    (2) Reelection before sixth taxable year after revocation. If an 
individual revoked an election under paragraph (b)(1) of this section 
and within five taxable years the individual wishes to reelect the same 
exclusion, then the individual may apply for consent to the reelection. 
The application for consent shall be made by requesting a ruling from 
the Associate Chief Counsel (Technical), National Office, Internal 
Revenue Service, 1111 Constitution Avenue NW., Washington, DC 20224. In 
determining whether to consent to reelection the Associate Chief Counsel 
or his delegate shall consider any facts and circumstances that may be 
relevant to the determination. Relevant facts and circumstances may 
include the following: a period of United States residence, a move from 
one foreign country to another foreign country with differing tax rates, 
a substantial change in the tax laws of the foreign country of residence 
or physical presence, and a change of employer.
    (c) Returns and extensions--(1) In general. Any return filed before 
completion of the period necessary to qualify an individual for any 
exclusion of deduction provided by section 911 shall be filed without 
regard to any exclusion or deduction provided by that section. A claim 
for a credit or refund of any overpayment of tax may be filed, however, 
if the taxpayer subsequently qualifies for any exclusion or deduction 
under section 911. See section 6012(c) and Sec. 1.6012-1(a)(3), 
relating to returns to be filed and information to be furnished by 
individuals who qualify for

[[Page 31]]

any exclusion or deduction under section 911.
    (2) Extensions. An individual desiring an extension of time (in 
addition to the automatic extension of time granted by Sec. 1.6081-2) 
for filing a return until after the completion of the qualifying period 
described in paragraph (c)(1) of this section for claiming any exclusion 
or deduction under section 911 may apply for an extension. An individual 
whose moving expense deduction is attributable to services performed in 
two years may apply for an extension of time for filing a return until 
after the end of the second year. The individual may make such 
application on Form 2350 or a comparable form. The application must be 
filed with the Director, Internal Revenue Service Center, Philadelphia, 
Pennsylvania 19255. The application must set forth the facts relied on 
to justify the extension of time requested and must include a statement 
as to the earliest date the individual expects to become entitled to any 
exclusion or deduction by reason of completion of the qualifying period.
    (d) Declaration of estimated tax. In estimating gross income for the 
purpose of determining whether a declaration of estimated tax must be 
made for any taxable year, an individual is not required to take into 
account income which the individual reasonably believes will be excluded 
from gross income under the provisions of section 911. In computing 
estimated tax, however, the individual must take into account, among 
other things, the denial of the foreign tax credit for foreign taxes 
allocable to the excluded income (see Sec. 1.911-6(c)).

(Sec. 911 (95 Stat. 194; 26 U.S.C. 911) and sec. 7805 (68A Stat. 917; 26 
U.S.C. 7805) of the Internal Revenue Code of 1954)

[T.D. 8006, 50 FR 2976, Jan. 23, 1985, as amended by T.D. 8480, 58 FR 
34885, June 30, 1993]