Rev. Rul. 57-330

Reconsideration has been given to Revenue Ruling 56-24, C.B. 1956-1, 851, with respect to the definition of the word `day' and its application in connection with resident citizens of Canada who, in the course of their employment in transportation services, enter and leave the United States at frequent intervals.

Revenue Ruling 56-24, supra , reads, in part, as follows:

The word `day' as used in relation to article XI(1) of the income tax convention between the United States and the United Kingdom of Great Britain and Northern Ireland, T.D. 5569, C.B. 1947-2, 100, with respect to the exempt status of compensation for personal services performed by a resident of the United Kingdom who is present in the United States for a period or periods not exceeding in the aggregate 183 days during the taxable year, is interpreted for United States income tax purposes to mean a day during any portion of which the resident of the United Kingdom was physically present within the United States. This interpretation will apply equally to all income tax conventions containing similar provisions.

Article VII of the income tax convention between the United States and Canada, T.D. 5206, C.B. 1943, 526, reads, in part, as follows:

1. A resident of Canada shall be exempt from United States tax upon compensation for personal (including professional) services performed during the taxable year within the United States of America if he is present therein for a period or periods not exceeding a total of 183 days during the taxable year * * *.

Although Revenue Ruling 56-24, supra , is applicable, generally, to the tax convention between the United States and Canada, it was not intended that it apply in situations in which Canadian resident transportation workers who, in the normal course of their employment in transportation service touching points within both Canada and the United States, perform personal services in both countries.

In any case in which it is necessary to determine the number of days a worker of the type described in the preceding paragraph is present in the United States, the following principles shall apply:

(1) The performance of labor or personal services during eight hours or more in any one day within the United States shall be considered as one day within the United States, except that if a period of more or less than eight hours is considered a full work day in the transportation job involved, such period shall be considered as one day within the United States.

(2) The performance of labor or personal services during less than eight hours in any day in the United States shall, except as provided in paragraph (1), be considered as a fractional part of a day within the United States. The total number of hours during which such latter services are performed in the United States during the taxable year, when divided by eight, shall be the number of days during which such Canadian resident shall be deemed to be present in the United States within the meaning of this paragraph.

(3) The aggregate number of days determined as provided in (1) and (2) shall be deemed to be the total number of days during which such resident of Canada was present in the United States during the taxable year.

Revenue Ruling 56-24, C.B. 1956-1, 851, modified.