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THE TRANSATLANTIC MAGAZINE

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IRS Issues Travel Disruption Guidance for US Taxpayers

Relief has been announced for individuals and businesses which have been affected by travel disruption

Published on April 22, 2020

The IRS has published details of a relief scheme to support individuals and businesses who may see a change to their US Tax residency status due to travel disruption caused by travel disruption during the Coronavirus pandemic.

In the information, the IRS has included guidance which "provides that, under certain circumstances, up to 60 consecutive calendar days of US presence that are presumed to arise from travel disruptions caused by the COVID-19 emergency will not be counted for purposes of determining US tax residency and for purposes of determining whether an individual qualifies for tax treaty benefits for income from personal services performed in the United States".

Further guidance goes on to explain that "qualification for exclusions from gross income under I.R.C. section 911 will not be impacted as a result of days spent away from a foreign country due to the COVID-19 emergency based on certain departure dates".

Additionally, the IRS has introduced an FAQ "which provides that certain US business activities conducted by a nonresident alien or foreign corporation will not be counted for up to 60 consecutive calendar days in determining whether the individual or entity is engaged in a US trade or business or has a US permanent establishment, but only if those activities would not have been conducted in the United States but for travel disruptions arising from the COVID-19 emergency".

The IRS have also confirmed that they are "continuing to monitor these and other issues related to the COVID-19 emergency, and updated information about relief will continue to be posted on Coronavirus Tax Relief on IRS.gov".

For details on the above guidance, go to https://www.irs.gov/newsroom/treasury-irs-announce-cross-border-tax-guidance-related-to-travel-disruptions-arising-from-the-covid-19-emergency

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