Rev. Rul. 56-638

The purpose of this Revenue Ruling is to supplement Revenue Ruling 55-623, C.B. 1955-2, 414, in determining the status, for purposes of the Federal Insurance Contributions Act and the Collection of Income Tax at Source on Wages chapters 21 and 24, respectively, subtitle C, Internal Revenue Code of 1954 , of services performed by resident aliens on or in connection with vessels and aircraft of foreign registry.

Resident aliens are not classed as citizens of the United States for purposes of section 3121(b)(4) of the Federal Insurance Contributions Act. That section excepts from `employment' services performed on or in connection with a non-American vessel or aircraft by individuals who are employed on or in connection with the vessel or aircraft when outside the United States, unless the employee is a citizen of the United States and the employer is an American employer. Thus, the services of a resident alien performed on or in connection with a non-American vessel or aircraft when outside the United States are excepted from `employment,' regardless of whether the employer is or is not an American employer.

There is no provision of law whereby the remuneration paid to a resident alien employee may be excepted from withholding under section 3402 of the Internal Revenue Code of 1954 merely because his services are performed on a non-American vessel or aircraft, regardless of whether such services are performed within or without the United States.