rp-06-51.pdf

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# Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.602: Tax forms and instructions.
(Also Part I, § 911)

Rev. Proc. 2006-51

## SECTION 1. PURPOSE

This revenue procedure amplifies Rev. Proc. 2005-70, 2005-47 I.R.B. 979, which
sets forth inflation adjusted items for 2006.

## SECTION 2. BACKGROUND

Subject to limitations, section 911 of the Internal Revenue Code allows a
qualified individual to elect to exclude from gross income the foreign earned income and
housing cost amount of the individual making the election. Under § 911(b)(2)(D)(i), the
foreign earned income exclusion amount is $80,000 for calendar years after 2001. Prior
to amendment by § 515(a) of the Tax Increase Prevention and Reconciliation Act of
2005, Pub. L. No. 109-222, 120 Stat. 345, 367 (2006) ("TIPRA"), § 911(b)(2)(D)(ii)
provided for the annual exclusion amount to be adjusted for inflation in any taxable year
beginning in a calendar year after 2007. Section 515(a) of TIPRA amended

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§ 911(b)(2)(D)(ii) to provide for the annual exclusion amount to be adjusted for inflation
in any taxable year beginning in a calendar year after 2005.

This revenue procedure adds a new subsection to Rev. Proc. 2005-70 to set
forth the inflation adjustment for § 911(b)(2)(D)(i) in accordance with the amendment
made by § 515(a) of TIPRA to § 911(b)(2)(D)(ii).

SECTION 3. AMPLIFICATION OF REV. PROC. 2005-70

Section 3.38 is added to Rev. Proc. 2005-70 to read as follows:

.38 Foreign Earned Income Exclusion. For taxable years beginning in 2006, the
foreign earned income exclusion amount under § 911(b)(2)(D)(i) is $82,400.

## SECTION 4. EFFECT ON OTHER DOCUMENTS

This revenue procedure amplifies Rev. Proc. 2005-70 by adding new § 3.38.

## SECTION 5. EFFECTIVE DATE

This revenue procedure applies to taxable years beginning in 2006. See § 4.01
of Rev. Proc. 2005-70.

### SECTION 6. DRAFTING INFORMATION

The principal author of this revenue procedure is Marnette M. Myers of the Office
of Associate Chief Counsel (Income Tax & Accounting). For further information
regarding this revenue procedure contact Marnette M. Myers at (202) 622-4920 (not a
toll free call).