There are two exceptions to meeting the requirements under the bona fide residence and the physical presence tests.

Waiver Of Time Requirements

Both the bona fide residence test and the physical presence test contain minimum time requirements. The minimum time requirements can be waived, however, if you must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country. You also must be able to show that you reasonably could have expected to meet the minimum time requirements if not for the adverse conditions. To qualify for the waiver, you must actually have your tax home in the foreign country and be a bona fide resident of, or be physically present in, the foreign country on or before the beginning date of the waiver. Refer to Revenue Procedure 2004-17 for more information. This Revenue Procedure may be updated from time to time.

U.S. Travel Restrictions

If you are present in a foreign country in violation of U.S. law, you will not be treated as a bona fide resident of a foreign country or as physically present in a foreign country while you are in violation of the law. Income that you earn from sources within such a country for services performed during a period of violation does not qualify as foreign earned income. Your housing expenses within that country (or outside that country for housing your spouse or dependents) while you are in violation of the law cannot be included in figuring your foreign housing amount.

The countries to which travel restrictions apply and the effective dates of the restrictions are as follows:

• Cuba - January 1, 1987 through the present (Still in effect)
• Iraq - August 2, 1990 through July 29, 2004
• Libya - January 1, 1987 through September 20, 2004

More information on these restrictions may be found in Notice 2003-52 and Revenue Ruling 2005-3. These rulings may be updated from time to time.

Individuals whose activities in Iraq and Libya are or were permitted by a specific or general license issued by the Treasury Department’s Office of Foreign Assets Control (OFAC) were not in violation of U.S. law. Accordingly, the restriction did not apply to such individuals with respect to the activities permitted by the license.

Civilians Working in Guantanamo Bay Cuba

Notice 2006-84 provides that civilian individuals who are performing services at the U.S. Naval Base in Guantanamo Bay Cuba are eligible for the foreign earned income exclusion and/or the foreign housing exclusion or deduction, provided that they meet all the usual requirements under Section 911 of the Internal Revenue Code. Please refer to Publication 54.

References/Related Topics

• Foreign Earned Income Exclusion

Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.