80 STAT.]
PUBLIC LAW 8 9 - 8 0 9 - N O V. 13, 1966
1565
be allowed with respect to that item of income or by increasing the rate of tax otherwise applicable to that item of income. " (c) ALLEVIATION
or
MORE
BURDENSOME
OR DISCRIMINATORY
TAXES.—Whenever the President finds that— "(1) the laws of any foreign country with respect to which the President has made a proclamation under subsection (a) have been modified so that citizens of the United States not residents of such foreign country or domestic corporations are no longer subject to more burdensome taxes on the item of income derived by such citizens or corporations from sources within such foreign country, or "(2) the laws of any foreign country with respect to which the President has made a proclamation under subsection (b) have been modified so that citizens of the United States or domestic corporations (or any class of such citizens or corporations) are no longer subject to a higher effective rate of tax on the item of income, he shall proclaim that the tax imposed hj this subtitle on the similar income of nationals, residents, or corporations of such foreign country shall, for any taxable year beginning after such proclamation, be determined under this subtitle without regard to such subsection. " (d) NOTIFICATION or CONGRESS REQUIRED.—No proclamation shall be issued by the President pursuant to this section unless, at least 30 days prior to such proclamation, he has notified the Senate and the House of Representatives of his intention to issue such proclamation. "(e)
IMPLEMENTATION BY REGULATIONS.—The Secretary
4. ^26^^50* 1-1563. 26 USC
or his
delegate shall prescribe such regulations as he deems necessary or appropriate to implement this section." (c) CLERICAL AMENDMENTS.—The table of sections for subpart C of part II of subchapter N of chapter 1 is amended— (1) by striking out the item relating to section 894 and inserting in lieu thereof "Sec. 894. Income affected by treaty."; (2) by adding at the end of such table the following: "Sec. 896. Adjustment of tax on nationals, residents, and corporations of certain foreign countries." (d) EFFECTIVE DATE.—The amendments made by this section (other than subsections (e) and (f)) shall apply with respect to taxable years beginning after December 31, 1966. (e) ELECTIONS BY NONRESIDENT UNITED STATES CITIZENS W H O ARE SUBJECT TO FOREIGN COMMUNITY PROPERTY LAWS.—
(1) Part III of subchapter N of chapter 1 (relating to income 76^|t^t^*ioo6^^' from sources without the United States) is amended by adding 26 USC 901-972. at the end thereof the following new subpart: "Subpart H—Income of Certain Nonresident United States Citizens Subject to Foreign Community Property Laws "Sec. 981. Election as to treatment of income subject to foreign community property laws. "SEC. 981. ELECTION AS TO TREATMENT OF INCOME SUBJECT TO FOREIGN COMMUNITY PROPERTY LAWS. " (a) GENERAL RULE. — I n the case of any taxable year beginning after December 31, 1966, if— "(1) an individual is (A) a citizen of the United States, (B) a bona fide resident of a foreign country or countries during the entire taxable year, and (C) married at the close of the taxable 65-300 0-67—101
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