Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 59-82

1959-1 C.B. 43

Sec. 1
Sec. 3
Sec. 4
Sec. 141
Sec. 142

Caution: Modified by Rev. Rul. 79-88

IRS Headnote

Where one spouse has no gross income for the taxable year, by reason of having no income other than that which is excludable under section 931(a) of the Internal Revenue Code of 1954, and, therefore, is not required to file a return of income on which to determine a liability for tax imposed, the other spouse, who has no income excludable under section 931 of the Code and who elects to file a separate return, may, under section 141 of the Code, claim the standard deduction which may not exceed $500, or, if eligible, may determine her tax under section 3 of the Code.

Full Text

Rev. Rul. 59-82

Advice has been requested whether a wife, whose husband filed no return because all of his income was exempt under section 931 of the Internal Revenue Code of 1954, is entitled to use the standard deduction under section 141 of the Code or, if eligible, may determine her tax under section 3 of the Code.

The individuals are citizens of the United States. The wife filed a separate return and reported thereon gross income subject to tax. The husband had no gross income from sources within the United States, and his income from sources within a possession of the United States is exempt from tax because he met the requirements of section 931 of the Code. He did not file a Form 1040 U.S. Individual Income Tax Return, or Form 1040E, Schedule for citizens entitled to the benefits of section 931 of the Code.

If, for the taxable year, the income of a citizen of the United States from sources without the United States is excludable from gross income under section 931 of the Code and he received no income from sources within the United States, he does not meet the requirement for filing a Federal income tax return under section 6012 of the Code. See section 1.931-1(b)(4) of the Income Tax Regulations.

Section 141 of the Code provides as follows:

The standard deduction referred to in section 63(b) (defining taxable income in case of individual electing standard deduction) shall be an amount equal to 10 per cent of the adjusted income or $1,000, whichever is the lesser, except that in the case of a separate return by a married individual the standard deduction shall not exceed $500.

Section 142 of the Code provides, in part, as follows:

(a) HUSBAND AND WIFE.-The standard deduction shall not be allowed to a husband or wife if the tax of the other spouse is determined under section 1 on the basis of the taxable income computed without regard to the standard deduction.

(b) CERTAIN OTHER TAXPAYERS INELIGIBLE.-The standard deduction shall not be allowed in computing the taxable income of-

*

(2) a citizen of the United States entitled to the benefits of section 931 * * *.

Section 3 of the Code provides for an optional tax if adjusted gross income is less than $5000. Section 1.3-1 of the Income Tax Regulations provides that an individual whose adjusted gross income is less than $5000 (or a husband and wife filing a joint return whose combined adjusted gross income is less than $5000) may elect to pay the tax imposed by section 3 in place of the tax imposed by section 1(a) or (b), of the Code.

In accordance with section 4 of the Code, a husband or wife may not elect to pay the optional tax imposed by section 3 of the Code if the tax of the other spouse is determined under section 1 of the Code on the basis of taxable income computed without regard to the standard deduction. Section 4 of the Code provides further that section 3 of the Code shall not apply to a citizen of the United States entitled to the benefits of section 931 of the Code.

It is held that where one spouse has no gross income for the taxable year, by reason of having no income other than that which is excludable under section 931(a) of the Code, and, therefore, is not required to file a return of income on which to determine a liability for tax imposed, the other spouse, who has no income excludable under section 931 of the Code, and who elects to file a separate return, may, under section 141 of the Code, claim the standard deduction which may not exceed $500, or, if eligible, may determine her tax liability under section 3 of the Code. See  Revenue Ruling 56-284, C.B. 1956-1, 89.