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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Tax Fairness for 
Americans Abroad Act of 2018’’. 
SEC. 2. TAXATION OF NONRESIDENT CITIZENS. 
(a) IN GENERAL.—The Internal Revenue Code of 
1986 is amended by inserting after section 911 the fol-
lowing new section: 
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‘‘SEC. 911A. ALTERNATIVE FOR NONRESIDENT CITIZENS OF 
THE UNITED STATES LIVING ABROAD. 
‘‘(a) EXCLUSION OF FOREIGN INCOME FROM GROSS 
INCOME.—In the case of a qualified nonresident citizen, 
there shall be excluded from the gross income of such indi-
vidual, and exempt from taxation under this subtitle, for 
any taxable year— 
‘‘(1) the foreign earned income of such indi-
vidual, and 
‘‘(2) the foreign unearned income of such indi-
vidual. 
‘‘(b) DEFINITIONS.—For purposes of this section— 
‘‘(1) IN GENERAL.—Unless otherwise provided, 
terms used in this section have the same meaning 
given such terms in section 911. 
‘‘(2) QUALIFIED NONRESIDENT CITIZEN.—The 
term ‘qualified nonresident citizen’ means, with re-
spect to a taxable year, a nonresident citizen who— 
‘‘(A) has not made the election described 
in section 911 for such taxable year, and 
‘‘(B) makes an election under this para-
graph. 
‘‘(3) FOREIGN
EARNED
INCOME.—The term 
‘foreign earned income’ has, with respect to a tax-
able year, the meaning given such term in section 
911(b)— 
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‘‘(A) without regard to paragraph (2) 
thereof, and 
‘‘(B) if ‘during the taxable year’ were sub-
stituted in paragraph (1)(A) for ‘during the pe-
riod described in subparagraph (A) or (B) of 
subsection (d)(1), whichever is applicable’. 
‘‘(4) FOREIGN UNEARNED INCOME.— 
‘‘(A) IN GENERAL.—The term ‘foreign un-
earned income’ means income other than for-
eign earned income that is sourced outside the 
United States. 
‘‘(B) EXCEPTION.—The term ‘foreign un-
earned income’ shall only include income from 
the sale of personal property to the extent such 
income is attributable to periods during which 
the individual was a qualified nonresident cit-
izen. 
‘‘(c) EXCLUSION OF GAIN DURING TIME AS QUALI-
FIED NONRESIDENT CITIZEN.—There shall be excluded 
from gross income of an individual any foreign unearned 
income from the sale of personal property to the extent 
such income is attributable to periods during which the 
individual was a qualified nonresident citizen. 
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‘‘(d) OTHER RULES.—Rules similar to the rules of 
paragraphs (4), (5), (6), (7), and (8) of section 911(d) 
shall apply for purposes of this subsection.’’. 
(b) CONFORMING AMENDMENT.—The table of sec-
tions for subpart B of part III of subchapter N of chapter 
1 of such Code is amended by inserting after the item 
related to section 911 the following new item: 
‘‘Sec. 911A. Alternative for nonresident citizens of the United States living 
abroad’’. 
(c) NONRESIDENT CITIZEN DEFINED.— 
(1) IN GENERAL.—Section 7701(b) of the In-
ternal Revenue Code of 1986 is amended by adding 
the following new subparagraph: 
‘‘(C) NONRESIDENT
CITIZEN.—The term 
‘nonresident citizen’ means, with respect to a 
taxable year, an individual who— 
‘‘(i) is a citizen of the United States, 
‘‘(ii) has a tax home in a foreign 
country, 
‘‘(iii) is in full compliance with United 
States income tax laws for the 3 previous 
taxable years, and 
‘‘(iv) either— 
‘‘(I) establishes to the satisfac-
tion of the Secretary that such indi-
vidual has been a bona fide resident 
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of a foreign country or countries for 
an uninterrupted period which in-
cludes an entire taxable year, or 
‘‘(II) is present in a foreign 
country or countries during at least 
330 full days during such taxable 
year. 
‘‘(D) LIMITATION ON NONRESIDENT CITI-
ZENS.—The term ‘nonresident citizen’ shall not 
include any Federal employee.’’. 
(2) CONFORMING AMENDMENT.—The heading 
of section 7701(b) of such Code is amended by strik-
ing ‘‘and’’ and inserting a comma and by inserting 
after ‘‘nonresident alien’’ the following: ‘‘, and non-
resident citizen’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to taxable years begin-
ning after the date of the enactment of this Act. 
Æ 
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