Certain organizations that are generally exempt from federal income taxes are taxed on income from business activities that are not related to their exempt purpose. The calculation of the tax on the unrelated business income depends upon whether the tax-exempt organization has more than one unrelated trade or business. The proposed regulations provide guidance on how these tax-exempt organizations determine if they have more than one unrelated trade or business, and, if so, how to calculate the amount of taxable income they have from the unrelated business activities. The proposed regulations also clarify that these regulations, as well as others on this topic, also apply to individual retirement accounts.

This revenue procedure provides relief to certain nonresident individuals who, but for travel and related disruptions resulting from the global outbreak of the COVID-19 virus, would not have been in the United States long enough during 2020 to be considered resident aliens under the “substantial presence test” or to be ineligible for treaty benefits on services income. With respect to the relief provided under the substantial presence test, this revenue procedure establishes procedures to allow an individual to apply the medical condition exception to exclude up to 60 consecutive days spent in the United States during a time period starting on or after February 1, 2020, and on or before April 1, with the specific start date to be chosen by each individual. It also provides procedures for an individual to exclude those days of presence in order to claim benefits under an income tax treaty with respect to services income.

26 CFR 601.602: Tax forms and instructions.

(Also: Part I, §§7701(b), 894; Treas. Reg. § 301.7701(b)-3)

U.S. citizens or resident aliens living and working abroad are taxed on their worldwide income. However, if their tax home is in a foreign country and they meet either the bona fide residence test or the physical presence test, they can choose to exclude from their income a limited amount of their foreign earned income. Both the bona fide residence test and the physical presence test contain minimum time requirements. The Secretary of the Treasury, in consultation with the Secretary of State, has determined that the global health emergency caused by the outbreak of COVID-19 is an adverse condition that precludes the normal conduct of business globally, and relief is being provided under section 911(d)(4) to any individual that reasonably expected to become a “qualified individual” for purposes of claiming the foreign earned income exclusion under section 911 but left the foreign jurisdiction during the period described in the revenue procedure.

26 CFR 1.911-2: Qualified Individuals

(Also: Part I, §§911; 1.911-2.)