Internal Revenue Service
Revenue Ruling
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smRev. Rul. 60-36
1960-1 C.B. 279
Sec. 911
IRS Headnote
The American National Red Cross is not an agency of the United States within the meaning of section 911(a)(2) of the Internal Revenue Code of 1954. Amounts received from such organization by a United States citizen for his services performed outside the United States which are attributable to any 18 consecutive-month period during which he was physically present with a foreign country or countries for at least 510 full days are not includible in his gross income to the extent provided in that section.
Full Text
Rev. Rul. 60-36
Advice has been requested whether amounts received from the American National Red Cross by a United States citizen for his services performed outside the United States constitute amounts paid by the United States or an agency thereof within the meaning of section 911(a)(2) of the Internal Revenue Code of 1954.
The taxpayer, a citizen of the United States, was employed in a foreign country by the American National Red cross for more than 510 full days of an 18 consecutive-month period. He and his family used United States Government transportation in going to Europe and traveled under United States Army orders. He was stationed at an Army post, receiving family quarters at his place of assignment.
Section 911 of the Code provides, in part, as follows:
(a) GENERAL RULE.-The following items shall not be included in gross income and shall be exempt from taxation under this subtitle:
*
(2) PRESENCE IN FOREIGN COUNTRY FOR 17 MONTHS.-In the case of an individual citizen of the United States, who during any period of 18 consecutive months is present in a foreign country or countries during at least 510 full days in such period, amounts received from sources without the United States (except amounts paid by the United States or an agency thereof) if such amounts constitute earned income * * * attributable to such period; * * *.
The American National Red Cross is a corporation functioning actively and continuously in accordance with the provisions of its charter granted by Congress January 5, 1905, Public Law 4, 36 U.S.C. 1, as amended. Under the provisions of that Act, as amended by Public Law 131, 83rd Cong., 10 U.S.C. 2602, whenever the President of the United States finds it necessary, he may accept the cooperation and assistance of the American National Red Cross, and employ it under the Armed Forces.
Personnel of the Red Cross who are performing duties in connection with its cooperation and assistance may be furnished (1) transportation, at the expense of the United States, while traveling to and from, and while performing these duties, in the same manner as civilian employees of the Armed Forces; (2) meals and quarters, at their expense or at the expense of the Red Cross, except that where civilian employees of the Armed Forces are quartered without charge, employees of the Red Cross may also be quartered without charge; and (3) available office space, warehousing, wharfage, and means of communication, without charge. Red Cross supplies determined to be necessary in furnishing such assistance to the Armed Forces, including gifts for the use of the Armed Forces, may be transported at the expense of the United States. However, no provision is made for the payment for the supplies themselves, and no provision is made for the payment of the wages of Red Cross personnel by the United States.
Although the relationship of the Red Cross to the United States Government is very close, this relationship is not such that it can properly be termed an agency of the United States. Factors such as the support of the Red Cross through voluntary contributions and the necessarily independent nature of the Red Cross itself preclude its holding unqualifiedly the status of an agency of the United States. Furthermore, it is not an integral part of the Armed Forces as is the case in United States Armed Forces Exchanges and other organizations similarly organized and operated. Compare Rev. Rul. 54-612, C.B. 1954-2, 169. Section 7 of Public Law 131, supra , specifically provides that employees of the American National Red Cross may not be considered as employees of the United States for the purposes of that Act.
Accordingly, it is concluded that the American National Red Cross is not an agency of the United States within the meaning of section 911(a)(2) of the Code. Therefore, amounts received from such organization by a United States citizen for his services performed outside the United States which are attributable to any 18 consecutive-month period during which he was physically present within a foreign country or countries for at least 510 full days are not includible in his gross income to the extent provided in that section.