'Nonresident Alien' in the Internal Revenue Code
The Internal Revenue Code’s definition of “nonresident alien” sits at 26 U.S.C. § 7701(b)(1)(B), in the IRC’s general definitional section. The text is short:
“An individual is a nonresident alien if such individual is neither a citizen of the United States nor a resident of the United States (within the meaning of subparagraph (A)).”
The definition has two requirements, joined by “neither…nor”:
- Not a citizen of the United States.
- Not a resident of the United States under the lawful-permanent-resident test, the substantial-presence test, or the first-year election (§ 7701(b)(1)(A) + (3) + (4)).
Both requirements must be met for an individual to be a “nonresident alien” within the IRC’s meaning. If either fails, the individual falls outside the nonresident-alien category.
What the definition forecloses
A great deal of alternate-tax theory depends on the proposition that ordinary Americans living in the fifty states are “nonresident aliens” for IRC purposes — and therefore taxable only under the narrower regime of § 871 (U.S.-source income or effectively connected income), rather than under § 1’s worldwide- income regime that applies to citizens and resident aliens.
The argument runs through several variations: that “United States” in the IRC means only the federal territory, that citizenship in the IRC operates by reference to that narrow territory, that a U.S. citizen residing in California is therefore “not a resident of the United States” in the IRC’s special sense, and that combined with their non-D.C. residence they are nonresident aliens who owe no income tax unless they file a Form 1040.
§ 7701(b)(1)(B) forecloses every variation. The definition requires non-citizenship of the United States. A U.S. citizen — in any sense the IRC could be read to use the term — fails the first requirement. A person who is a U.S. citizen cannot be a nonresident alien for IRC purposes, regardless of where they reside.
The accompanying statutory definition of “United States” at § 7701(a)(9) confirms the reading: when used geographically, “United States” includes “the States and the District of Columbia.” A citizen living in California is a citizen of the United States as the IRC uses the term — and the geographic axis of § 7701(b) treats California as part of the IRC’s “United States” for substantial-presence purposes. The territorial-volunteer reading requires a redefinition of “United States” and a redefinition of “citizen” that the IRC’s own text does not support.
How the definition fits the Matrix
The IRC’s individual-taxpayer Matrix has four cells along citizenship × residence:
| Citizenship | Residence | Treatment |
|---|---|---|
| Citizen | Resident | § 1, worldwide income |
| Citizen | Living abroad | § 1, worldwide income, § 911 exclusion available |
| Resident alien | Resident (passes § 7701(b)(1)(A) test) | § 1, worldwide income |
| Nonresident alien | Not a citizen AND not a resident | § 871, U.S.-source / ECI |
§ 7701(b)(1)(B)’s definition gates entry into the fourth cell. To be a nonresident alien, an individual must satisfy both negatives — not a citizen, not a resident. U.S. citizens are excluded from the cell by the citizenship requirement; resident aliens are excluded by the residence requirement.
Three of the four cells are taxed on worldwide income. One cell — nonresident alien — is taxed on a narrower base. The narrower- base treatment exists because the U.S. has limited jurisdiction to tax foreign nationals who derive income from U.S. sources without becoming residents; it does not exist as a general escape hatch for U.S. citizens.
Statutory history
§ 7701(b) was added to the IRC by the Deficit Reduction Act of 1984, Pub. L. 98-369, § 138. Before 1984, the definition of “nonresident alien” was scattered across the IRC and the Treasury Regulations — but the substantive content (alien status
- failure to qualify as resident) was the operative rule throughout. The 1984 consolidation made the definition explicit in the IRC’s own text.
For purposes of The Federal Zone (1992; 11th ed. 2001) and texts derivative of it, § 7701(b) was on the books before publication and is the operative text now. Whatever pre-1984 administrative interpretations of “nonresident alien” Mitchell or his sources may have constructed (including readings of Treasury Decision 2313) cannot override the express statutory definition Congress enacted.
Why this concept page exists
Adverse Review’s foundational-claims series treats The Federal Zone at the level of its statutory premises. § 7701(b)(1)(B) is one of the load-bearing statutory texts the work’s centerpiece argument depends on, and the alternate-tax movement’s reading of it does not survive contact with the provision’s actual language. This concept page captures the textual point in focused form so the Brushaber essay and the Matrix concept can cross-reference it.
The structural pattern is the one § 7701(c) plays for “includes” in Phase 1: the IRC supplies its own definitional text; that text forecloses the move; the alternate-tax framework requires the IRC to say something other than what it says. Restoring the IRC’s own text to its operative position closes the move.