Page:United States Statutes at Large Volume 100 Part 3.djvu/756

 100 STAT. 2564

PUBLIC LAW 99-514—OCT. 22, 1986

1986. The preceding sentence shall apply to all taxable years whether beginning before, on, or after the date of the enactment of this Act (or in the case of any tax not imposed with respect to a taxable year, to taxable events after the date of enactment of this Act.) (b) TREATMENT OF EMPLOYEES OF PANAMA CANAL COMMISSION AND DEPARTMENT OF DEFENSE FOR PURPOSES OF SECTION 912.—Employees

of the Panama Canal Commission and civilian employees of the Defense Department of the United States stationed in Panama may exclude from gross income allowances which are comparable to the allowances excludable under section 912(1) of the Internal Revenue Code of 1986 by employees of the State Department of the United States stationed in Panama. The preceding sentence shall apply to taxable years beginning after December 31, 1986. SEC. 1233. PROVISIONS RELATING TO SECTION 911 EXCLUSION. (a) REDUCTION IN SECTION 911 EXCLUSION.—Subparagraph (A) of

section 911(b)(2) (relating to limitation on foreign earned income) is amended to read as follows: "(A) IN GENERAL.—The foreign earned income of an individual which may be excluded under subsection (a)(1) for any taxable year shall not exceed the amount of foreign earned income computed on a daily basis at an annual rate of $70,000." (b) SECTION 911 EXCLUSION NOT AVAILABLE TO INDIVIDUALS VIOLATING FEDERAL TRAVEL AND OTHER RESTRICTIONS.—Section 911(d)

(relating to definitions and special rules) is amended by redesignating paragraph (8) as paragraph (9) and by inserting after paragraph (7) the following new paragraph: "(8) LIMITATION ON INCOME EARNED IN RESTRICTED COUNTRY.—

"(A) IN GENERAL.—If travel (or any transaction in connection with such travel) with respect to any foreign country is subject to the regulations described in subparagraph (B) during any period— "(i) the term 'foreign earned income' shall not include any income from sources within such country attributable to services performed during such period, "(ii) the term 'housing expenses' shall not include any expenses allocable to such period for housing in ^' - •*^' such country or for housing of the spouse or dependents of the taxpayer in another country while the taxpayer '* •''" ' is present in such country, and "(iii) an individual shall not be treated as a bona fide resident of, or as present in, a foreign country for any • ' ' ' day during which such individual was present in such country during such period. "(B) REGULATIONS.—For purposes of this paragraph, regulations are described in this subparagraph if such regulations— ' "(i) have been adopted pursuant to the Trading With the Enemy Act (50 U.S.C. App. 1 et seq.), or the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), and "(ii) include provisions generally prohibiting citizens and residents of the United States from engaging in '-• transactions related to travel to, from, or within a '•' foreign country.

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