Rev. Rul. 70-461

Advice has been requested whether a resident alien who obtained a reentry permit prior to his departure from the United States should be treated as a resident alien for Federal income tax purposes until the expiration of the period of time granted for reentry (including extensions) or for some longer period.

The taxpayer, a resident alien of the United States since 1965, returned to his native country during the taxable year 1967 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 reentry permit.

During the stay abroad, the taxpayer became ill and was unable to complete his business transactions within the period of time allotted under the reentry permit. Accordingly, a renewal of the permit was obtained. This renewal expired in June 1969 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, shall be classified as a special immigrant enabling him to reenter the United States if his stay abroad was protracted, and such stay was caused by reasons beyond his control and for which he was not responsible.

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 reentry permit and the extension thereof.

Section 1.871-5 of the Income Tax Regulations provides that an alien who has acquired residence in the United States retains his status as a resident until he abandons the same and actually departs from the United States. An intention to change his residence does not change his status as a resident alien to that of a nonresident alien.

Residence in the United States, once acquired, is not lost except through physical departure from the United States coupled with an intention to abandon the United States residence. Such intention may be ascertained from the person's declarations and his acts. It is well established that the question of residence is one to be determined by all of the facts and circumstances in such case. Thus, the expiration of a reentry 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 resident.

In the instant case, the taxpayer has at all times evidenced the intention to return to the United States. Furthermore, expiration of the taxpayer's reentry permit in this case does not conclusively preclude him from returning to the United States under the classification as a special immigrant. 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.

Accordingly, the taxpayer in the instant case who acquired residence in the United States and who upon leaving the United States obtained a valid permit to reenter the United States retains, in absence of exceptional circumstances, his status as a resident of the United States for Federal income tax purposes even though the reentry permit and extension thereof has expired prior to his return to the United States. The expiration of a reentry permit or extension thereof, does not automatically change the status of an alien individual from resident to nonresident for Federal income tax purposes. Furthermore, even though an alien's reentry permit has not expired, exceptional circumstances might be shown by proof of acts and statements of the alien showing that since the date of issuance of the reentry permit or the date of the last renewal thereof he has taken steps to acquire a residence elsewhere, or by proof that the alien has applied for citizenship in some other country since the date of issuance of the reentry permit or the date of the last renewal thereof, or by some other proof of definite action on the part of the alien which shows that he has abandoned his residence in the United States.

I.T. 4057, C.B. 1951-2, 93 and Revenue Ruling 60-129, C.B. 1960-1, 272, are hereby superseded since the position set forth therein is restated in this Revenue Ruling.