78 1 2 3 an automobile bus chassis or an automobile bus body": (4) REFUND OF TAX ON LUBRICATING OIL USED 4 IN PRODUCING REREFINED OIL.-Paragraph (2) of 6 5 section 6416(b) (relating to credit or refund for certain uses) is amended by striking out "or" at the end of subparagraph (L), by striking out the period at the end བ 7 of subparagraph (M) and inserting in lieu thereof "; or", and by inserting after subparagraph (M) the following: "(N) in the case of lubricating oil taxable under section 4091 which is contained in a mix ture which is rerefined oil (as defined in section 4093(b)(3)), used or sold. The amount of the credit or refund under subparagraph (N) with respect to any lubricating oil shall be the amount which would be exempt from tax under section 4093." (5) CREDIT OR REFUND OF TAX ON TRUCK CHASSIS OR BODY USED IN THE MANUFACTURE OF A BUS.-Subparagraph (A) of section 6416(b)(3) (relating to tax-paid articles used for further manufacture, etc.) is amended by striking out "component part of," and all that follows and inserting in lieu thereof the follow ing: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 (6) CLERICAL AMENDMENT.-The last sentence of section 48(a)(10)(B) is amended by striking out "51" and inserting in lieu thereof “5”. (7) EFFECTIVE DATE.-Any amendment made by this subsection shall take effect as if included in the provision of the Energy Tax Act of 1978 to which such amendment relates. TITLE II-GENERAL EFFECTIVE 16 SEC. 201. GENERAL EFFECTIVE DATE. 17 Except as otherwise provided in title I, any amendment 18 made by title I shall take effect as if it had been included in 19 the provision of the Revenue Act of 1978 to which such 20 amendment relates. Passed the House of Representatives July 16, 1979. Attest: EDMUND L. HENSHAW, JR., Clerk. DESCRIPTION OF S. 873 AND S. 1549 SCHEDULED FOR A HEARING BEFORE THE SUBCOMMITTEE ON TAXATION AND DEBT MANAGEMENT GENERALLY OF THE SENATE COMMITTEE ON FINANCE ON NOVEMBER 7, 1979 PREPARED BY THE STAFF OF THE JOINT COMMITTEE ON TAXATION NOVEMBER 6, 1979 JCX-2-79 I. SUMMARY 1. S. 873--Senators Ribicoff, Waiver of Time Limits in Foreign Residence or Presence The bill would permit the waiver of the minimum time limits in the foreign residence or presence eligibility requirements for Americans working abroad to obtain the benefits of the deduction for excess foreign living costs or the exclusion for foreign earned income. The waiver generally would be available to Americans working abroad who could reasonably have been expected to meet those eligibility requirements, but who left the foreign country under conditions of war, civil unrest or similar conditions which precluded the normal conduct of business. 2. S. 1549 Senators Boren, Bellmon, Nelson, and Percy Change of Time for Paying Excise Tax on Fishing Equipment Under present law, a 10-percent excise tax is imposed upon the sale of fishing rods, creels, reels, and artificial lures, baits, and flies by the manufacturer, producer, or importer thereof. This tax generally is payable relatively soon after such fishing equipment is sold. For The bill would provide that the excise tax on fishing equipment sold during quarters ending on December 31, March 31, and June 30, would be payable, respectively, on March 31, June 30, and September 24. the quarter ending September 30, the tax would be due by the date specified by Treasury regulations. Waiver of Time Limits in Foreign Residence or Presence Present law Prior to enactment of the Foreign Earned Income Act of 1978, an American who was present in a foreign country or countries for at least 510 full days during any period of 18 consecutive months, or who was a bona fide resident of a foreign country or countries for an uninterrupted period which included an entire taxable year, was entitled to exclude up to a flat amount (generally $20,000) per year of his foreign earned income (sec. 911). The 1978 Act retained these eligibility requirements but changed the special provisions for Americans working abroad. Generally, qualifying individuals are allowed a deduction for their excess foreign costs of living. The new excess living cost deduction (new sec. 913) consists of separate elements for the general cost of living, housing, education, and home leave costs. In addition, taxpayers living and working in certain hardship areas are allowed a special $5,000 deduction in order to compensate them for the hardships involved and to encourage U.S. citizens to accept employment in these areas. As an exception to these new rules, the Act permits employees who reside in camps in hardship areas to elect to claim a $20,000 earned income exclusion (under sec. 911) in lieu of the new excess living cost and hardship area deductions. As noted above, the foreign presence or residence criteria of prior law continue to determine whether or not Americans working abroad qualify for the special deduction or exclusion. If a taxpayer working abroad is "temporarily" away from home in pursuit of a trade or business, the taxpayer may generally deduct traveling expenses (including amounts spent for meals and lodging) for himself but generally not for family members who accompany him. The taxpayer's "home" for this purpose is generally his principal place of employment. While a determination of whether the taxpayer is "temporarily" away from home depends on all the facts and circumstances, the Internal Revenue Service often holds that the taxpayer is "temporarily" away from home if his employment is not anticipated to, and does not actually, last more than a year. Otherwise, the Service ordinarily views the taxpayer as not being temporarily away from home and not entitled to these deductions.1 A number of items |