For United States citizens and residents living and working abroad, I.R.C. § 911 provides a highly valuable tax benefit. Under I.R.C. § 911(a), a "qualified individual" may elect to exclude from gross income their foreign earned income and their housing cost amount. However, to meet the definition of a "qualified individual," a taxpayer must establish that their tax home is in a foreign country and must satisfy one of two stringent time-based tests under I.R.C. § 911(d)(1). They must either be a bona fide resident of a foreign country for an uninterrupted period that includes an entire taxable year, or they must be physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.

The core issue arises when expatriate taxpayers are forced to flee their host countries due to dangerous and unforeseen circumstances, causing them to fall short of the 330-day physical presence test or the bona fide residence requirement. Without administrative relief, these taxpayers would lose their section 911 exclusions entirely.

Why the IRS Issued the Procedure

To address this precise issue, the IRS issues annual guidance to waive the time requirements for taxpayers forced to evacuate specific countries. Revenue Procedure 2026-16 was issued strictly to provide "information to any individual who failed to meet the eligibility requirements of section 911(d)(1) of the Internal Revenue Code (Code) for 2025 because of adverse conditions in a foreign country". The procedure formalizes the list of countries where dangerous conditions warranted evacuation and provides the necessary administrative relief so that displaced taxpayers are not additionally penalized by the loss of their foreign tax benefits.

The IRS’s Analysis of the Law

The IRS’s analysis is strictly rooted in the statutory authority granted by Congress under I.R.C. § 911(d)(4).

The IRS begins its analysis by establishing the baseline statutory requirements, noting that "Section 911(d)(1) of the Code defines the term ’qualified individual’ as an individual whose tax home is in a foreign country and who is (A) a citizen of the United States and establishes to the satisfaction of the Secretary of the Treasury that the individual has been a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire taxable year, or (B) a citizen or resident of the United States who, during any period of 12 consecutive months, is present in a foreign country or countries during at least 330 full days".

The IRS then turns to the statutory exception found in I.R.C. § 911(d)(4). The IRS notes that "Section 911(d)(4) of the Code provides that an individual will be treated as a qualified individual with respect to a period in which the individual was a bona fide resident of, or was present in, a foreign country if the individual left the country during a period for which the Secretary of the Treasury, after consultation with the Secretary of State or their delegate, determines that individuals were required to leave because of war, civil unrest, or similar adverse conditions that precluded the normal conduct of business".

Furthermore, the IRS highlights the statutory burden of proof placed on the taxpayer, pointing out that an "individual must establish that but for those conditions the individual could reasonably have been expected to meet the eligibility requirements". This aligns perfectly with I.R.C. § 911(d)(4)(C), which demands that the taxpayer establish this fact to the satisfaction of the Secretary.

Relief Granted in the Revenue Procedure

Under the authority of I.R.C. § 911(d)(4), the IRS granted specific relief for the 2025 tax year. The Revenue Procedure states: "For 2025, the Secretary of the Treasury, in consultation with the Secretary of State, has determined that war, civil unrest, or similar adverse conditions precluded the normal conduct of business in the following countries beginning on the specified date".

The IRS granted relief for individuals departing from the following countries on or after the stated dates in 2025:

Haiti: January 1, 2025
Ukraine: January 1, 2025
Democratic Republic of the Congo: January 28, 2025
South Sudan: March 7, 2025
Iraq: June 11, 2025
Lebanon: June 22, 2025
Mali: October 30, 2025

To claim the relief granted by this Revenue Procedure, the IRS emphasizes a strict timing prerequisite. The procedure dictates that "To qualify for relief under section 911(d)(4) of the Code, an individual must have established residency, or have been physically present, in the foreign country on or before the date that the Secretary of the Treasury determines that individuals were required to leave the foreign country".

The IRS illustrates this with a clear example regarding Haiti: "[A]n individual who left Haiti on or after January 1, 2025, will be treated as a qualified individual with respect to the period during which that individual was a bona fide resident of, or was present in, Haiti if the individual establishes a reasonable expectation that he or she would have met the requirements of section 911(d) but for those conditions". Conversely, the IRS warns that "individuals who first established residency or were physically present in Haiti after January 1, 2025, are not eligible to qualify for the exception provided in section 911(d)(4) of the Code for 2025".

Tax professionals dealing with clients affected by these global events should ensure that the dates of their clients’ physical presence in the affected regions strictly align with the deadlines published in Revenue Procedure 2026-16 to successfully secure the foreign earned income exclusion. Taxpayers or practitioners requiring additional assistance with claiming the exclusion or filing amended returns are directed by the IRS to consult the foreign earned income exclusion topic on the IRS website or contact a local IRS office.

Prepared with assistance from NotebookLM.