Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 76-35

1976-1 C.B. 44

Section 151
Section 152

IRS Headnote

Dependency exemptions; Vietnamese refugees. A taxpayer who sponsors an unrelated Vietnamese refugee family by providing housing and financial support is not entitled to claim dependency exemptions for the refugee family members who are members of the taxpayer's household for less than the entire taxable year.

Full Text

Rev. Rul. 76-35

Advice has been requested whether, under the circumstances described below, a taxpayer may claim dependency exemptions for a Vietnamese refugee family.

The taxpayer, as sponsor of an unrelated refugee family, is committed to provide the family with housing and financial support for a period of two years. Pursuant to this commitment, the refugee family became part of the taxpayer's household on May 1, 1975.

Under section 212(d)(5) of the Immigration and Nationality Act, 8 U.S.C. section 1182(d)(5)(1970), Vietnamese refugees are admitted into the United States as parolees. However, as stated in Rev. Rul. 57-331, 1957-2 C.B.11, and Rev. Rul. 61-118, 1961-1 C.B. 5, political refugees admitted to the United States as parolees are classified as resident aliens for Federal income tax purposes.

In general, section 151(e)(1) of the Internal Revenue Code of 1954 provides an exemption of $750 for each dependent (as defined in section 152) whose gross income for the calendar year in which the taxable year of the taxpayer begins is less than $750, or who is a child of the taxpayer and (i) has not attained the age of 19 at the close of the calendar year in which the taxable year of the taxpayer begins, or (ii) is a student.

Section 152 of the Code and the Income Tax Regulations thereunder provide, in general, that in order to claim a dependency exemption the following tests must be met:

1. The taxpayer must furnish over one-half of the individual's support during the calendar year,

2. The individual must be related to the taxpayer, or must be a member of the taxpayer's household, and live with the taxpayer for the entire taxable year, and

3. The individual must be a United States citizen or resident.

In Trowbridge v. Commissioner, 268 F. 2d 208 (9th Cir. 1959), the United States Court of Appeals in affirming a decision of the United States Tax Court involving a taxpayer who claimed dependency exemptions for three unrelated persons who lived with the taxpayer from March 5, through December 31, 1954, ruled that section 152 of the Code precluded exemptions for unrelated persons who were not members of the taxpayer's household throughout the taxable year. The appellate court stated that the interpretation placed on section 152 by the Commissioner and the Tax Court was supported by the regulations as well as the Congressional intent in enacting this Code section.

Accordingly, in the instant case, dependency exemptions for the refugee family members will not be available to the taxpayer for 1975, since the refugees were not members of the taxpayer's household throughout the entire calendar year.