Extensions of Time for Filing Income Tax Returns for Taxpayers Outside the U.S. or Puerto Rico -- Final Regs Under Section 6081

 [4830-01]

 ACTION: Final regulations.

 SUMMARY: This document provides final income Tax Regulations relating to the extension of time to file federal income tax returns and to pay any taxes owing by United States citizens and United States residents who are outside of the United States and Puerto Rico. Section 6081 of the internal Revenue Code Act of 1986 provides that the Secretary may grant a reasonable extension of time to file federal income tax returns. These regulations provide the public with guidance needed to comply with that section and affect United States citizens and residents outside of the United States and Puerto Rico.

 DATES: Effective Date: September 10, 1990. These final regulations apply to federal income tax returns due on or after April 15, 1988.

 FOR FURTHER INFORMATION CONTACT: Caren S. Shein of the Office of Associate Chief Counsel (International), within the Office of Chief Counsel, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20224, Attention: CC:CORP:T:R (INTL-O287-88) (202-566-3452, not a toll-free call).

SUPPLEMENTARY INFORMATION:

BACKGROUND

On February 23, 1989, the FEDERAL REGISTER published proposed amendments (54 FR 7783) to the Income Tax Regulations (26 CFR Part 1) and temporary Income Tax Regulations (54 FR 7762) under section 6081(a) of the Internal Revenue Code of 1986. One written comment responding to the notice was received. No public hearing was requested and, therefore, a hearing was not held. After consideration, the proposed regulations are adopted with only minor changes by this Treasury Decision.

EXPLANATION OF PROVISIONS

 A commenter suggested that section 1.6081-4T(a)(5) be amended to include non-military United States citizens and residents on temporary business assignment outside the United States and Puerto Rico but whose tax home remains in the United States. Section 1.6081-4T(a)(5) currently provides an automatic extension of time to file an income tax return for U.S. citizens or residents whose tax homes are outside the United States and Puerto Rico. That section recognizes that an individual who maintains his tax home abroad may have difficulty filing a return by the due date. Section 1.6081-4T(a)(6) provides an automatic extension of time to file an income tax return for United States citizens or residents in military or naval service on duty, including non-permanent or short term duty, outside the United States and Puerto Rico. That section recognizes that, due to the nature of military service, an individual may be unable to file a return on the due date. The Service does not believe that a non-military individual on short term assignment outside the United States and Puerto Rico would encounter hardships as significant as those faced by individuals to whom the above provisions apply in filing a return by the due date or requesting an extension of time to file. Therefore, the regulations have not been amended to reflect this comment.

SPECIAL ANALYSES

 It has been determined that these rules are not major rules as defined in Executive Order 12291. Therefore, a Regulatory Impact Analysis is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. Chapter 5) and the Regulatory Flexibility Act (5 U.S.C. Chapter 6) do not apply to these regulations, and, therefore, a final Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking for the regulations was submitted to the Administrator of the Small Business Administration for comment on their impact on small business.

DRAFTING INFORMATION

 The principal author of these regulations is Peter J. Hanley, formerly of the Office of Associate Chief Counsel (International), within the Office of Chief Counsel, Internal Revenue Service. Other personnel from the Internal Revenue Service and Treasury Department participated in developing the regulations.

LIST OF SUBJECTS IN 26 CFR SECTIONS 1.6001-1 THROUGH 1.6109-2

 Income taxes, Administration and procedure, Filing requirements.

Treasury Decision 8312

ADOPTION OF AMENDMENTS TO THE REGULATIONS

Accordingly, 26 CFR Part 1 is amended as follows:

PART 1 -- INCOME TAX REGULATIONS

Paragraph 1. The authority for part 1 continues to read in part:

Authority: 26 U.S.C. 7805. * * *

Par. 2. Section 1.6081-4T is removed.

Par. 3. New section 1.6081-5 is added to read as follows:

Section 1.6081-5 Extensions of time in the case of certain partnerships, corporations and U.S. citizens and residents.

(a) The rules in paragraphs (a) through (e) of this section apply to returns of income due after April 15, 1988. An extension of time for filing returns of income and for paying any tax shown on the return is hereby granted to and including the fifteenth day of the sixth month following the close of the taxable year in the case of:

(1) Partnerships which are required under section 1.6031-1(e)(2) to file returns on the fifteenth day of the fourth month following the close of the taxable year of the partnership, and which keep their records and books of account outside the United States and Puerto Rico;

(2) Domestic corporations which transact their business and keep their records and books of account outside the United States and Puerto Rico;

(3) Foreign corporations which maintain an office or place of business within the United States;

(4) Domestic corporations whose principal income is from sources within the possessions of the United States;

(5) United States citizens or residents whose tax homes and abodes, in a real and substantial sense, are outside the United States and Puerto Rico; and

(6) United States citizens and residents in military or naval service on duty, including non-permanent or short term duty, outside the United States and Puerto Rico.

(b) In order to qualify for the extension under this section, a statement must be attached to the return showing that the person for whom the return is made is a person described in paragraph (a) of this section.

(c) For purposes of paragraph (a)(5) of this section, whether a person is a United States resident will be determined in accordance with section 7701(b) of the Code. The term "tax home," as used in paragraph (a)(5), will have the same meaning which it has for purposes of section 162(a)(2) (relating to travel expenses away from home). If a person does not have a regular or principal place of business, that person's tax home will be considered to be his regular place of abode in a real and substantial sense.

(d) In order to qualify for the extension under paragraph (a)(6), the assigned tour of duty outside the United States and Puerto Rico must be for a period that includes the entire due date of the return.

(e) A person otherwise qualifying for the extension under paragraph (a)(5) or paragraph (a)(6) shall not be disqualified because he is physically present in the United States or Puerto Rico at any time, including the due date of the return.

(f) With respect to income tax returns due on April 15, 1988, an extension of time for filing a return of income and for paying any tax shown on that return is hereby granted to and including the fifteenth day of the sixth month following the close of the taxable year in the case of citizens or residents of the United States who are traveling outside the United States and Puerto Rico. A taxpayer will be considered to be traveling outside the United States and Puerto Rico only if the period of travel outside the United States and Puerto Rico is a period of at least fourteen days continuous travel that includes all of April 15, 1988. For returns due after April 15, 1988, no extension will be granted to taxpayers traveling outside the United States and Puerto Rico.