INCOME TAX TREATMENT OF NONRESIDENT ALIEN INDIVIDUALS WHO ARE MARRIED TO CITIZENS OR RESIDENTS OF THE UNITED STATES.

SEC. 1012. INCOME TAX TREATMENT OF NONRESIDENT ALIEN INDIVIDUALS WHO ARE MARRIED TO CITIZENS OR RESIDENTS OF THE UNITED STATES. (a) Election To Be Treated as Residents of the United States.— (1) In general.— Section 6013 (relating to joint returns of income tax by husband and wife) is amended, by adding at the end thereof the following new subsections: “(g) Election To Treat Nonresident Alien Individual as Resident of the United States.— “(1) In general.— A nonresident alien individual with respect to whom this subsection is in effect for the taxable year shall be treated as a resident of the United States for purposes of chapter 1 for all of such taxable year. “(2) Individuals with respect to whom this subsection is in effect.— This subsection shall be in effect with respect to any individual who, at the time an election was made under tills subsection, was a nonresident alien individual married to a citizen or resident of the United States, if both of them made such election to have the benefits of this subsection apply to them. “(3) Duration of election.— An election under this subsection snail apply to the taxable year for which made and. to all subsequent taxable years until terminated under paragraph (4) or (5); except that any such election shall not apply for any taxable year if neither spouse is a citizen or resident of the United States at any time during such year. “(4) Termination of election.— An election under this subsection shall terminate at the earliest of the following times: “(A) Revocation by taxpayers.— If either taxpayer revokes the election, as of the first taxable year for which the last day prescribed by law for filing the return of tax under chapter 1 has not yet occurred. “(B) Death.— In the case of the death of either spouse, as of the beginning of the first taxable year of the spouse who survives following the taxable year in which such death occurred; except that if the spouse who survives is a citizen or resident of the United States who is a surviving spouse entitled to the benefits of section 2, the time provided by this subparagraph shall be as of the close of the last taxable year for which such individual is entitled to the benefits of section 2. “(C) Legal separation.— In the case of the legal separation of the couple under a decree of divorce or of separate maintenance, as of the beginning of the taxable year in which such legal separation occurs. “(D) Termination by secretary.— At the time provided in paragraph (5). “(5) Termination by secretary.— The Secretary may terminate any election under this subsection for any taxable year if he determines that either spouse has failed— “(A) to keep such books and records. “(B) to grant such access to such books and records, or “(C) to supply such other information, as may be reasonably necessary to ascertain the amount of liability for taxes under chapter 1 of either spouse for such taxable year. 90 STAT. 1613 “(6) Only one election.— If any election under this subsection for any two individuals is terminated under paragraph (4) or (5) for any taxable year, such two individuals shall be ineligible to make an election under this subsection for any subsequent taxable year. “(h) Joint Return. Etc., for Year in Which Nonresident Alien Becomes Resident of United States.— “(1) In general.— If— “(A) any individual is a nonresident alien individual at the beginning of any taxable year but is a resident of the United States at the close of such taxable year, “(B) at the close of such taxable year, such individual is married to a citizen or resident of the United States, and “(C) both individuals elect the benefits of this subsection at the time and in the manner prescribed by the Secretary by regulation, then the individual referred to in subparagraph (A) shall be treated as a resident of the United States for purposes of chapter 1 for all of such taxable year. “(2) Only one election.— If any election under this subsection applies for any 2 individuals for any taxable year, such 2 individuals shall be ineligible to make an election under this subsection for any subsequent taxable year.” (2) Clerical amendment.— Section 871(g) (relating to cross references) is amended by adding at the end thereof the following new paragraph: “(7) For election to treat married nonresident alien individual as resident of United States in certain cases, see subsections (g) and (h) of section 6013.” (b) Tax Treatment of Certain Community Income in the Case of a Resident or Citizen of the United States Who Is Married to a Nonresident Alien Individual.— (1) In general.— Subpart A of part II of subchapter N of chapter 1 (relating to nonresident alien individuals) is amended by adding at the end thereof the following new section: “SEC. 879. TAX TREATMENT OF CERTAIN COMMUNITY INCOME IN THE CASE OF A RESIDENT OR CITIZEN OF THE UNITED STATES WHO IS MARRIED TO A NONRESIDENT ALIEN INDIVIDUAL. “(a) General Rule.— In the case of a citizen or resident of the United States who is married to a nonresident alien individual and who has community income for the taxable year, such community income, shall be treated as follows: “(1) Earned income (within the meaning of section 911(b)), other than trade or business income and a partner’s distributive share of partnership income, shall be treated as the income of the spouse who rendered the personal services, “(2) Trade or business income, and a partner’s distributive share of partnership income, shall be treated as provided in section 1402(a)(5), “(3) Community income not described in paragraph (1) or (2) which is derived from the separate property (as determined under the applicable community property Jaw) of one spouse shall be treated as the income of such spouse, and “(4) All other such community income shall be treated as provided in the applicable community property law. 90 STAT. 1614 “(b) Exception Where Election Under Section 6013(g) Is in Effect.— Subsection (a) shall not apply for any taxable year for which an election under subsection (g) or (h) of section 6013 (relating to election to treat nonresident alien individual as resident of the United States) is in effect. “(c) Definitions and Special Rules.— For purposes of this section— “(1) Community income.— The term ‘community income’ means income which, under applicable community property laws, is treated as community income. “(2) Community property laws.— The term ‘community property laws’ means the community property laws of a State, a foreign country, or a possession of the United States. “(3) Determination op marital status.— The determination of marital status shall be made under section 143(a).” (2) Repeal of section 981.— Subpart II of part III of subchapter X of chapter 1 (relating to election as to treatment of income subject to foreign community property laws) is hereby repealed, (3) Clerical amendments.— (A) The table of sections for subpart A of part II of subchapter N of chapter 1 is amended by adding at the end thereof the following new item: “Sec. 879. Tax treatment of certain community income in the case of a resident or citizen of the United States who is married to a nonresident alien individual.” (B) The table of subparts for part III of subchapter N of chapter 1 is amended by striking out the item relating to subpart G. (c) Due Date for Filing Estimated Tax Returns in the Case of Certain Nonresident Aliens.— Subsection (a) of section 6073 (relating to time for filing declarations of estimated tax by individuals) is amended by adding at the end thereof the following sentence: “In the case of a nonresident alien described in section 6072(c), the requirements of section 6015 shall be deemed to be first met no earlier than after April 1 and before June 2 of the taxable year.”. (d) Effective Dates.— The amendments made by subsection (a) shall apply to taxable years ending on or after December 31, 1975. The amendments made by subsections (b) and (c) shall apply to taxable years beginning after December 31, 1976.