I 

115TH CONGRESS 

2D SESSION H. R. 7358 

To amend the Internal Revenue Code of 1986 to provide an alternative 

exclusion for nonresident citizens of the United States living abroad. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 20, 2018 

Mr. HOLDING introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

an alternative exclusion for nonresident citizens of the 

United States living abroad. 

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 ‘‘Tax Fairness for 

5 Americans Abroad Act of 2018’’. 

6 SEC. 2. TAXATION OF NONRESIDENT CITIZENS. 

7 (a) IN GENERAL.—The Internal Revenue Code of 

8 1986 is amended by inserting after section 911 the fol9 lowing new section: 


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1 ‘‘SEC. 911A. ALTERNATIVE FOR NONRESIDENT CITIZENS OF 

2 THE UNITED STATES LIVING ABROAD. 

3 ‘‘(a) EXCLUSION OF FOREIGN INCOME FROM GROSS

4 INCOME.—In the case of a qualified nonresident citizen, 

5 there shall be excluded from the gross income of such indi6 vidual, and exempt from taxation under this subtitle, for 

7 any taxable year— 

8 ‘‘(1) the foreign earned income of such indi9 vidual, and 

10 ‘‘(2) the foreign unearned income of such indi11 vidual. 

12 ‘‘(b) DEFINITIONS.—For purposes of this section— 

13 ‘‘(1) IN GENERAL.—Unless otherwise provided, 

14 terms used in this section have the same meaning 

15 given such terms in section 911. 

16 ‘‘(2) QUALIFIED NONRESIDENT CITIZEN.—The 

17 term ‘qualified nonresident citizen’ means, with re18 spect to a taxable year, a nonresident citizen who— 

19 ‘‘(A) has not made the election described 

20 in section 911 for such taxable year, and 

21 ‘‘(B) makes an election under this para22 graph. 

23 ‘‘(3) FOREIGN EARNED INCOME.—The term 

24 ‘foreign earned income’ has, with respect to a tax25 able year, the meaning given such term in section 

26 911(b)— 


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1 ‘‘(A) without regard to paragraph (2) 

2 thereof, and 

3 ‘‘(B) if ‘during the taxable year’ were sub4 stituted in paragraph (1)(A) for ‘during the pe5 riod described in subparagraph (A) or (B) of 

6 subsection (d)(1), whichever is applicable’. 

7 ‘‘(4) FOREIGN UNEARNED INCOME.— 

8 ‘‘(A) IN GENERAL.—The term ‘foreign un9 earned income’ means income other than for10 eign earned income that is sourced outside the 

11 United States. 

12 ‘‘(B) EXCEPTION.—The term ‘foreign un13 earned income’ shall only include income from 

14 the sale of personal property to the extent such 

15 income is attributable to periods during which 

16 the individual was a qualified nonresident cit17 izen. 

18 ‘‘(c) EXCLUSION OF GAIN DURING TIME AS QUALI19 FIED NONRESIDENT CITIZEN.—There shall be excluded 

20 from gross income of an individual any foreign unearned 

21 income from the sale of personal property to the extent 

22 such income is attributable to periods during which the 

23 individual was a qualified nonresident citizen. 


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1 ‘‘(d) OTHER RULES.—Rules similar to the rules of 

2 paragraphs (4), (5), (6), (7), and (8) of section 911(d) 

3 shall apply for purposes of this subsection.’’. 

4 (b) CONFORMING AMENDMENT.—The table of sec5 tions for subpart B of part III of subchapter N of chapter 

6 1 of such Code is amended by inserting after the item 

7 related to section 911 the following new item: 

‘‘Sec. 911A. Alternative for nonresident citizens of the United States living 

abroad’’. 

8 (c) NONRESIDENT CITIZEN DEFINED.— 

9 (1) IN GENERAL.—Section 7701(b) of the In10 ternal Revenue Code of 1986 is amended by adding 

11 the following new subparagraph: 

12 ‘‘(C) NONRESIDENT CITIZEN.—The term 

13 ‘nonresident citizen’ means, with respect to a 

14 taxable year, an individual who— 

15 ‘‘(i) is a citizen of the United States, 

16 ‘‘(ii) has a tax home in a foreign 

17 country, 

18 ‘‘(iii) is in full compliance with United 

19 States income tax laws for the 3 previous 

20 taxable years, and 

21 ‘‘(iv) either— 

22 ‘‘(I) establishes to the satisfac23 tion of the Secretary that such indi24 vidual has been a bona fide resident 


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1 of a foreign country or countries for 

2 an uninterrupted period which in3 cludes an entire taxable year, or 

4 ‘‘(II) is present in a foreign 

5 country or countries during at least 

6 330 full days during such taxable 

7 year. 

8 ‘‘(D) LIMITATION ON NONRESIDENT CITI9 ZENS.—The term ‘nonresident citizen’ shall not 

10 include any Federal employee.’’. 

11 (2) CONFORMING AMENDMENT.—The heading 

12 of section 7701(b) of such Code is amended by strik13 ing ‘‘and’’ and inserting a comma and by inserting 

14 after ‘‘nonresident alien’’ the following: ‘‘, and non15 resident citizen’’. 

16 (d) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply with respect to taxable years begin18 ning after the date of the enactment of this Act. 

Æ 


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