This revenue procedure amplifies Rev. Proc. 2005-70, 2005-47 I.R.B.
979, which sets forth inflation adjusted items for 2006.
Subject to limitations, section 911 of the Internal Revenue Code allows
a qualified individual to elect to exclude from gross income the foreign earned
income and housing cost amount of the individual making the election. Under
§ 911(b)(2)(D)(i), the foreign earned income exclusion amount is
$80,000 for calendar years after 2001. Prior to amendment by § 515(a)
of the Tax Increase Prevention and Reconciliation Act of 2005, Pub. L. No.
109-222, 120 Stat. 345, 367 (2006) (“TIPRA”), § 911(b)(2)(D)(ii)
provided for the annual exclusion amount to be adjusted for inflation in any
taxable year beginning in a calendar year after 2007. Section 515(a) of TIPRA
amended § 911(b)(2)(D)(ii) to provide for the annual exclusion amount
to be adjusted for inflation in any taxable year beginning in a calendar year
This revenue procedure adds a new subsection to Rev. Proc. 2005-70 to
set forth the inflation adjustment for § 911(b)(2)(D)(i) in accordance
with the amendment made by § 515(a) of TIPRA to § 911(b)(2)(D)(ii).
SECTION 3. AMPLIFICATION OF REV. PROC. 2005-70
Section 3.38 is added to Rev. Proc. 2005-70 to read as follows:
.38 Foreign Earned Income Exclusion. For taxable
years beginning in 2006, the foreign earned income exclusion amount under
§ 911(b)(2)(D)(i) is $82,400.
SECTION 4. EFFECT ON OTHER DOCUMENTS
This revenue procedure amplifies Rev. Proc. 2005-70 by adding new § 3.38.
SECTION 5. EFFECTIVE DATE
This revenue procedure applies to taxable years beginning in 2006.
See § 4.01 of Rev. Proc. 2005-70.
SECTION 6. DRAFTING INFORMATION
The principal author of this revenue procedure is Marnette M. Myers
of the Office of Associate Chief Counsel (Income Tax & Accounting). For
further information regarding this revenue procedure, contact Marnette M.
Myers at (202) 622-4920 (not a toll-free call).
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