Election Under IRC § 6013(g)

LB&I International Practice Service

Process Unit – Audit

Shelf Individual Outbound

Volume 9 Jurisdiction to Tax UIL Code 9431

Part 9.2 Taxation Based on Residency Status Level 2 UIL 9431.02

Chapter 9.2.6 Joint Return Election (IRC 6013(g) and (h)) Level 3 UIL 9431.02-06

Sub-Chapter N/A N/A

Unit Name Election Under IRC § 6013(g)

Document Control Number (DCN) JTO/9431.02_09(2014)

Date of Last Update 08/28/14

Note: This document is not an official pronouncement of law, and cannot be used, cited or relied upon as such. Further, this document may not contain a

comprehensive discussion of all pertinent issues or law or the IRS's interpretation of current law.

Volume

Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Table of Contents

(View this PowerPoint in “Presentation View” to click on the links below)

Process Overview

Determination of Process Applicability

Summary of Process Steps

Process Steps

Other Considerations and Impacts to Audit

Training and Additional Resources

Glossary of Terms and Acronyms

Index of Related Issues

Volume

Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Process Overview

Election Under IRC § 6013(g)

Process Description

The purpose of this unit is to determine whether a nonresident alien individual married to a U.S. citizen or resident alien properly made

the election to be treated as a resident of the United States under IRC § 6013(g). This election applies to the first year in which the

election is properly made and to all subsequent tax years until it is terminated or suspended.

The election under IRC § 6013(g) affords a nonresident alien married to a U.S. citizen or resident alien the ability to be treated as a

U.S. resident for purposes of Chapter 1 and Chapter 24 and sections 6012, 6013, 6072 and 6091 of the Code for the entire taxable

year. By making this election, the nonresident alien and his spouse may file a joint U.S. income tax return. Chapter 1 of the Code

covers most, but not all, income taxes. Chapter 24 governs income tax withholding at source. IRC Sections 6012, 6013, 6072, and

6091 address income tax return filing requirements. If an election is made under IRC § 6013(g), the worldwide income of both

spouses is, in general, subject to U.S. income taxation. Generally, this election precludes individuals from claiming any benefits under

an income tax treaty.

It is important to note that this is an election that both spouses must make of their own accord, and not an election that the Service can

compel them to make. Additionally, absent this election, the U.S. spouse would have to file as married filing separate (with higher tax

rates and more limited deductions) and the alien spouse would have to file as a non-resident alien or may have no U.S. tax return filing

requirement at all, but may be subject to withholding on his or her U.S. source income.

CAUTION: A nonresident alien is not treated as a resident alien under IRC § 6013(g) for purposes of certain U.S. taxes on

income, e.g. self-employment tax and the tax imposed by IRC § 1411. Nevertheless, a nonresident alien can make a separate

election to be treated as a resident alien for purposes of IRC § 1411 under the regulations promulgated under that section.

Example Circumstances Under Which Process Applies

 An examiner receives a case involving an individual who, along with his or her U.S. citizen or resident alien spouse, elected to be

treated as a resident alien for U.S. income tax purposes during the year of the initial election and for all subsequent tax years

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Determination of Process Applicability

Election Under IRC § 6013(g)

Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

An individual who makes the election under IRC § 6013(g) with his or her spouse is generally treated as a resident alien for purposes

of Chapter 1 and Chapter 24, and sections 6012, 6013, 6072, and 6091 of the Code for the entire taxable year.

Criteria Resources 6103 Protected Resources

 In order to properly make the election under IRC §

6013(g), several criteria must be met:

– The individual must be a nonresident alien,

– The individual must be married to a U.S. citizen or

resident alien at the close of the taxable year for which

the election is being made,

– A statement making the election must be attached to a

joint return,

– The election must be made timely,

– An election may not be made if an election under IRC

§ 6013(g) was previously terminated by either spouse.

 Form 1040

 IRC § 6013(g)

 IRC § 6511(a)

 Treas. Reg. § 1.6013-6(a)(4)

Once made, the election is in effect for all subsequent

years except for years for which the election is suspended

or terminated.

 IRC § 6013(g)(3)

 Treas. Reg. § 1.6013-6(a)(1)(i)

 Treas. Reg. § 1.6013-6(a)(1)(ii)

TREATY IMPLICATION: Individuals making this

election are generally prohibited from claiming

benefits under a U.S. income tax treaty as a

resident of a treaty country.

 Treas. Reg. § 1.6013-6(a)(2)(v) and Ex.

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Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Determination of Process Applicability

Election Under IRC § 6013(g)

An individual who makes the election under IRC § 6013(g) with his or her spouse is generally treated as a resident alien for purposes

of Chapter 1 and Chapter 24, and sections 6012, 6013, 6072, and 6091 of the Code for the entire taxable year.

Criteria Resources 6103 Protected Resources

NOTE: If both spouses are nonresident aliens at the

beginning of the year, the couple may still make an

election under IRC § 6013(g) as long as one spouse

becomes a U.S. resident during that year.

 Treas. Reg. § 1.6013-6(c), Ex.2

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Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Summary of Process Steps

Election Under IRC § 6013(g)

Step 1

Determine whether the individual was a nonresident alien who is married to a U.S. citizen or resident alien at the close

of the taxable year for which the election is being made.

Step 2 Determine whether the individual and his or her spouse made a proper election under IRC § 6013(g).

Step 3 Determine the tax consequences of making the election.

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Step 1

Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Election Under IRC § 6013(g)

Step 1: Determine whether the individual is a nonresident alien who is married to a U.S. citizen or resident.

DECISION POINT: Was the individual a nonresident alien? Was the individual married to a U.S. citizen or resident at the close

of the taxable year?

Considerations Resources 6103 Protected Resources

In order to make the 6013(g) election, the individual

must be married to either a citizen of the United

States or a resident of the United States at the close

of the taxable year for which the election is being

made. Whether two individuals are married at the

close of the taxable year is determined under Treas.

Reg. § 1.6013-4(a).

 NOTE: Same-sex couples that are legally married

in jurisdictions that recognize their marriages, will

be treated as married for ALL federal tax purposes

even if they currently live in a jurisdiction that does

not recognize the marriage as valid. Any same-

sex marriage legally entered into in one of the 50

states, District of Columbia, a U.S. territory or a

foreign country is covered by the ruling.

 IRC § 6013(g)

 Treas. Reg. § 1.6013-6(a)(4)

 Treas. Reg. § 1.6013-4(a)

 IR-2013-72, August 29, 2013

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Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Step 1 (cont’d)

Election Under IRC § 6013(g)

Step 1: Determine whether the individual is a nonresident alien who is married to a U.S. citizen or resident.

DECISION POINT: Was the individual a nonresident alien? Was the individual married to a U.S. citizen or resident at the close

of the taxable year?

Considerations Resources 6103 Protected Resources

CAUTION: The individual must be a

nonresident alien under IRC § 7701(b)(1)(B)

in order to make the election under IRC §

6013(g). An individual is not a nonresident

alien if the individual is a lawful permanent

resident (LPR), met the Substantial Presence

Test (SPT) under IRC § 7701(b)(3), or made

a First-Year Election under IRC § 7701(b)(4).

 IRC § 6013(g)

 IRC § 7701(b)(1)(A)(i)

 IRC § 7701(b)(1)(A)(ii)

 IRC § 7701(b)(3)

 IRC § 7701(b)(4)

 Treas. Reg. § 301.7701(b)-1(b)

 Treas. Reg. § 301.7701(b)-1(c)

 Treas. Reg. § 301.7701(b)-4(c)(3)

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Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

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Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Step 2

Election Under IRC § 6013(g)

Step 2: Determine whether the individual and his or her spouse made a proper 6013(g) election.

DECISION POINT: Did the individual and his or her spouse properly make a 6013(g) election?

Considerations Resources 6103 Protected Resources

There is no specific form used to make the election

under IRC § 6013(g). The election is made by

attaching a statement to a joint Form 1040 for the

first taxable year in which the election is to be in

effect. The statement should include:

 A declaration that the election is being made and

that the individuals meet the necessary

requirements (e.g., that one spouse is a U.S.

citizen or resident)

 The name, address, and taxpayer identification

number (TIN) of each spouse; if one spouse is

deceased, the executor’s or administrator’s

information is required.

 Two signatures; the statement must be signed by

both persons making the election.

 Form 1040 or Form 1040A

 Treas. Reg. § 1.6013-6(a)(4)(ii)

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Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

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Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Election Under IRC § 6013(g)

Step 2: Determine whether the individual and his or her spouse made a proper 6013(g) election.

DECISION POINT: Did the individual and his or her spouse properly make a 6013(g) election?

Step 2 (cont’d)

Considerations Resources 6103 Protected Resources

The election must be made before the time period

for making a claim for refund expires – generally, the

later of 3 years from the time the return was filed or

2 years from the time the tax was paid.

 NOTE: If the election is made with a joint

amended return, the amended return should be

made on Form 1040 or 1040A, and the word

‘Amended’ should be written clearly on the front of

the return. Amended returns also need to be filed

for any subsequent year in which either of the

spouses filed a return.

 IRC § 6013(g)

 IRC § 6511(a)

 Treas. Reg. § 1.6013-6(a)(4)(i)

 CCA 201329016

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Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Step 3

Election Under IRC § 6013(g)

Step 3: Determine the tax consequences of making the election.

If the election under IRC § 6013(g) is properly made, the nonresident alien individual is treated as a resident alien of the United States

and the individual’s worldwide income is, in general, subject to U.S. income tax for the entire taxable year.

Considerations Resources 6103 Protected Resources

Once the election is made, it remains in effect for all

subsequent taxable years except for years for which

the election is suspended or terminated. The

election is suspended for a taxable year if during that

taxable year neither spouse is a U.S. citizen or

resident.

 IRC § 6013(g)(3)

 Treas. Reg. § 1.6013-6(a)(1)

 Treas. Reg. § 1.6013-6(a)(3)

The election can be terminated at the earliest of

either of the following:

 Revocation made by either spouse by filing a

statement of revocation on or before the last day

on which the return for that year is due,

 The death of either spouse, (such termination

would only affect tax years after the year in which

the spouse died),

 Legal separation under a decree of divorce or

separate maintenance (as of the beginning of the

taxable year in which the divorce or separation

occurs), or

 IRC § 6013(g)(4)

 IRC § 6013(g)(5)

 Treas. Reg. § 1.6013-6(b)

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Step 3 (cont’d)

Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Election Under IRC § 6013(g)

Step 3: Determine the tax consequences of making the election.

If the election under IRC § 6013(g) is properly made, the nonresident alien individual is treated as a resident alien of the United States

and the individual’s worldwide income is, in general, subject to U.S. income tax for the entire taxable year.

Considerations Resources 6103 Protected Resources

The election can be terminated at the earliest of

either of the following:

 Termination by the Service if it determines that

either spouse has failed to keep adequate records,

failed to grant adequate access to such books or

records, or failed to supply other such information

 IRC § 6013(g)(4)

 IRC § 6013(g)(5)

 Treas. Reg. § 1.6013-6(b)

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Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Step 3 (cont’d)

Election Under IRC § 6013(g)

Step 3: Determine the tax consequences of making the election.

If the election under IRC § 6013(g) is properly made, the nonresident alien individual is treated as a resident alien of the United States

and the individual’s worldwide income is, in general, subject to U.S. income tax for the entire taxable year.

Considerations Resources 6103 Protected Resources

With a proper election in place, the individual and his

U.S. citizen or resident spouse can properly file a

joint U.S. income tax return.

 IRC § 6013(a)

 IRC § 6020(b)

A Joint Return Election cannot be made, however, if

the Service has issued a Statutory Notice of

Deficiency and the individuals have timely petitioned

the Tax Court.

 IRC § 6013(b)(2)(B)

 Olson v. Commissioner, T.C. Memo.

1987-543

 Kitcher v. Commissioner, T.C. Memo

1986-41

 Mazanek v. Commissioner, T.C.

Memo 1984-633.

This prohibition does not apply if the individuals have

not previously filed a separate return (e.g., in cases

where the Statutory Notice of Deficiency is based on

a Substitute for Return under IRC § 6020(b)).

 Millsap v. Commissioner, 91 T.C.

926(1988)

 Phillips v. Commissioner, 851 F.2d

1492 (D.C. Cir. 1988)

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Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Other Considerations / Impact to Audit

Election Under IRC § 6013(g)

Considerations Resources 6103 Protected Resources

CAUTION: A nonresident alien is not treated

as a resident alien under IRC § 6013(g) for

purposes of certain U.S. taxes on income,

e.g. self-employment tax and the tax imposed

by IRC § 1411. Nevertheless, a nonresident

alien can make a separate election to be

treated as a resident alien for purposes of

IRC § 1411 under the regulations

promulgated under that section. Also, the

nonresident alien could be subject to U.S.

self-employment tax under a Totalization

Agreement.

 IRC § 1402(b)

 IRC § 1411

 Treas. Reg. § 1.1411-2(a)(2)(iii)(B)

 SSA § 233

 Social Security Administration list of

countries with which the United

States has entered into a Totalization

Agreement.

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Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Training and Additional Resources

Chapter 9.2.6 Joint Return Election (IRC 6013(g) and (h))

Type of Resource Description(s) and/or Instructions for Accessing References

Other Training Materials U.S. Tax Guide for Aliens  IRS Publication 519

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Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Glossary of Terms and Acronyms

Acronym Definition

CCA Chief Counsel Advisory

DCN Document Control Number

IPN Issue Practice Network

IPS International Practice Service

LPR Lawful Permanent Resident

SPT Substantial Presence Test

TIN Taxpayer Identification Number

UIL Uniform Issue List

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Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Volume Part Chapter Sub-Chapter

Jurisdiction to Tax Outbound Taxation Based on Residency Status Joint Return Election Under IRC § 6013(g) N/A

Index of Related Issues

Issue Associated UIL(s) References

First-Year Election  9431.02  IPS Unit Document Control Number (DCN)

JTO/9431.02_11(2014)

 Unit Under Construction

Election under IRC § 6013(h)  9431.02  IPS Unit Document Control Number (DCN)

JTO/9431.02_10(2014)

 Unit Under Construction

Residency Status of Lawful

Permanent Residents

 9431-01  IPS Unit Document Control Number (DCN)

JTO/9431.01_02(2013)

Determining an Individual’s

Residency for Treaty

Purposes

 9450.05  IPS Unit Document Control Number (DCN)

TRE/9450.05_XX(2014)

 Unit Under Construction

Substantial Presence Test  9431.01  IPS Unit Document Control Number (DCN)

JTO/9431.01_03(2013)

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