II 

109TH CONGRESS 

2D SESSION S. 3496 

To amend the Internal Revenue Code of 1986 to eliminate the limitation 

on the foreign earned income exclusion, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 13, 2006 

Mr. DEMINT introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to eliminate 

the limitation on the foreign earned income exclusion, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Working American 

5 Competitiveness Act’’. 

6 SEC. 2. ELIMINATION OF LIMITATION ON FOREIGN EARNED 

7 INCOME EXCLUSION. 

8 (a) IN GENERAL.—Subsections (a) and (b) of section 

9 911 of the Internal Revenue Code of 1986 (relating to 


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1 citizens or residents of the United States living abroad) 

2 are amended to read as follows: 

3 ‘‘(a) EXCLUSION FROM GROSS INCOME.—At the elec4 tion of a qualified individual, there shall be excluded from 

5 the gross income of such individual, and exempt from tax6 ation under this subtitle, for any taxable year, the foreign 

7 earned income of such individual. 

8 ‘‘(b) FOREIGN EARNED INCOME.—For purposes of 

9 this section— 

10 ‘‘(1) IN GENERAL.—The term ‘foreign earned 

11 income’ with respect to any individual means the 

12 amount received by such individual from sources 

13 within a foreign country or countries which con14 stitute earned income attributable to services per15 formed by such individual during the period de16 scribed in subparagraph (A) or (B) of subsection 

17 (d)(1), whichever is applicable. 

18 ‘‘(2) CERTAIN AMOUNTS NOT INCLUDED IN

19 FOREIGN EARNED INCOME.—The foreign earned in20 come for an individual shall not include amounts— 

21 ‘‘(A) received as a pension or annuity, 

22 ‘‘(B) paid by the United States or an 

23 agency thereof to an employee of the United 

24 States or an agency thereof, 


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1 ‘‘(C) included in gross income by reason of 

2 section 402(b) (relating to taxability of bene3 ficiary of nonexempt trust) or section 403(c) 

4 (relating to taxability of beneficiary under a 

5 nonqualified annuity), or 

6 ‘‘(D) received after the close of the taxable 

7 year following the taxable year in which the 

8 services to which the amounts are attributable 

9 are performed.’’. 

10 (b) CONFORMING AMENDMENTS.— 

11 (1) Section 911 of the Internal Revenue Code 

12 of 1986 is amended by striking subsection (c) and 

13 by subsections (e) and (f) as subsections (c) and (e), 

14 respectively. 

15 (2) Section 911(d) of such Code is amended by 

16 striking paragraph (7) and by redesignating para17 graph (8) as paragraph (7). 

18 (3) Section 1402(a)(11) of such Code is amend19 ed by striking ‘‘section 911(a)(1)’’ and inserting 

20 ‘‘section 911(a)’’. 

21 (c) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to taxable years beginning after 

23 the date of the enactment of this Act. 

Æ 


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