Rev. Rul. 60-129

Advice has been requested relative to the status for Federal income tax purposes of a United States resident alien who is traveling abroad and whose permit to re-enter the United States has expired.

The taxpayer, a resident alien of the United States since 1951, returned to his native country during the taxable year 1956 to attend to certain business matters. Anticipating that such business might require his absence from the United States for more than one year, the taxpayer obtained a re-entry permit.

During the stay abroad, the taxpayer became ill and was unable to complete his business transaction within the period of time allotted under the re-entry permit. Accordingly, a renewal of the permit was obtained. This renewal expired in June, 1958, and, under immigration and naturalization laws of the United States, no further extension was permitted. However, such laws do provide that an alien after establishing permanent residence in the United States may be granted a returning resident visa enabling him to re-enter the United States without consideration of the alien quota system.

The taxpayer has at all times evidenced an intention to return to the United States but has been unable to do so because of continued ill health and inability to conclude his business transactions abroad.

The specific issue in this case is whether the taxpayer is considered a resident or nonresident alien for Federal income tax purposes during the period he remains abroad after the expiration of his United States re-entry permit and the extensions thereof.

I.T. 4057, C.B. 1951-2, 93, holds, in substance, that an alien who has acquired residence in the United States and who upon leaving the United States obtains a valid re-entry permit retains, in the absence of exceptional circumstances, his status as a resident of the United States for Federal income tax purposes until the period covered by his re-entry permit or any extension thereof has expired, or until some definite action is taken by him which shows that he has abandoned his residence in the United States.

The above holding in I.T. 4057 seems to imply that the expiration of a re-entry permit, or extension thereof, automatically changes the status of an alien individual from resident to nonresident for Federal income tax purposes. In reality, this is not the case.

It is well established that the question of residence is one to be determined by all of the facts and circumstances of each case and residence in the United States, once acquired, is not lost except through a physical departure from the United States coupled with circumstances indicative of an intention to abandon the United States residence. See Walter J. Baer v. Commissioner, 6 T.C. 1195. Thus, the expiration of a re-entry permit, or extension thereof, is merely one of the factors to be considered in conjunction with other circumstances in determining whether a resident alien has abandoned his residence in this country. Expiration of the permit alone is not conclusive evidence of an abandonment of residence.

In the instant case, the taxpayer has at all times expressed the intention to return to the United States. Further, the expiration of the taxpayer's re-entry permit in this case does not conclusively preclude him from returning to the United States under a returning resident visa. Since the facts do not evidence an intention on the part of the taxpayer to abandon his United States residence, he remains an alien resident of this country for Federal income tax purposes until such time as circumstances indicate that he has abandoned his United States residence.

To the extent it implies that the expiration of a re-entry permit, or extention thereof, automatically changes the status of an alien individual from resident to nonresident for Federal income tax purposes, I.T. 4057, supra, is modified.