The Internal Revenue Service has updated the list of areas included as being within the "North American area," referred to in Section 274(h) of the Internal Revenue Code.The section of the tax code limits deductions for expenses incurred in connection with a convention, seminar, or similar meeting held outside the “North American area.” In a recent revenue ruling, the agency updated the list of all geographical areas currently included in the North American area for purposes of the section.
In releasing the updated ruling, the IRS said that Saint Lucia will not be included as part of the North American area with respect to conventions that begin after April 4, 2007 -- except with respect to expenses for which a taxpayer demonstrates a nonrefundable contractual obligation existing as of April 4.
The following areas made the cut as a “North American area”:
• The 50 states of the United States and the District of Columbia;
• Possessions of the United States -- American Samoa, Baker Island, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, Howland Island, Jarvis Island, Johnston Island, Kingman Reef, the Midway Islands, Palmyra Atoll, the Virgin Islands, Wake Island, and other U.S. islands, cays, and reefs;
• The Republic of the Marshall Islands;
• The Federated States of Micronesia; and,
• The Republic of Palau.
Also, the following are considered North American areas for expenses incurred in attending a convention that began in:
• Antigua and Barbuda, after Feb. 9, 2003;
• Aruba, after Sept. 12, 2004;
• Bahamas, after Dec. 31, 2005;
• Barbados, after Nov. 2, 1984;
• Bermuda, after Dec. 1, 1988;
• Costa Rica, after Feb. 11, 1991;
• Dominica, after May 8, 1988;
• Dominican Republic, after Oct. 11, 1989;
• Grenada, after July 12, 1987;
• Guyana, after Aug. 26, 1992;
• Honduras, after Oct. 9, 1991;
• Jamaica, after Dec. 17, 1986;
• Netherlands Antilles, after March 21, 2007; and,
• Trinidad and Tobago, after Feb. 8, 1990.
The full ruling is available online, at www.irs.gov/pub/irs-drop/rr-07-28.pdf. The ruling will also be published in Internal Revenue Bulletin 2007-18, dated April 30.
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