U.S. citizens cannot be 'nonresident aliens' for IRC purposes — § 7701(b)(1)(B) closes the cell by express text
The proposition
A U.S. citizen — regardless of where the citizen resides — cannot be a “nonresident alien” for purposes of the Internal Revenue Code. The express statutory definition at 26 U.S.C. § 7701(b)(1)(B) requires both non-citizenship and non-residency; failing the non-citizenship requirement excludes the individual from the nonresident-alien category by the statute’s own terms.
The statutory text
§ 7701(b)(1)(B) — Nonresident alien:
“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 “neither…nor” construction is conjunctive in standard English and in standard statutory interpretation. To fall within the category defined, an individual must satisfy both negatives:
- Not a citizen of the United States, AND
- 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)).
A U.S. citizen necessarily fails the first conjunct. Therefore a U.S. citizen is excluded from the nonresident-alien category as a matter of definition.
Why this matters
A great deal of alternate-tax theory — most systematically The Federal Zone (Mitchell, 1992; 11th ed. 2001) and dozens of derivative texts — depends on the proposition that ordinary Americans in the fifty states are “nonresident aliens” for IRC purposes. The argument is built up through reinterpretations of the IRC’s definitions of “United States,” “State,” and “includes,” combined with selected readings of Brushaber v. Union Pacific Railroad Co., 240 U.S. 1 (1916).
§ 7701(b)(1)(B) closes the move at the definitional level, independent of any of the upstream interpretive arguments. Even if every claim about Brushaber, every reading of Treasury Decision 2313, every interpretation of “United States” and “State” went exactly the way Mitchell argues — the conclusion (“Americans in the fifty states are nonresident aliens”) still fails because the statutory definition of “nonresident alien” requires non-citizenship of the United States.
The supporting regulation, 26 CFR § 1.1-1(b), states the positive corollary directly:
“All citizens of the United States, wherever resident, and all resident alien individuals are liable to the income taxes imposed by the Code whether the income is received from sources within or without the United States.”
Citizens are taxed worldwide — wherever resident. The IRC’s geographic structure does not have an exit-by-residency for citizens.
The two structural authorities
The non-availability of the nonresident-alien cell to U.S. citizens rests on two independent grounds:
The express statutory definition at § 7701(b)(1)(B). Added to the IRC by the Deficit Reduction Act of 1984. Conjunctive “neither…nor” language. Excludes citizens by its own text.
The implementing regulation at 26 CFR § 1.1-1(b). “All citizens of the United States, wherever resident…are liable to the income taxes imposed by the Code.” Citizens taxed worldwide. No territorial exit.
The two operate together. The statute defines who is not a nonresident alien (citizens, by exclusion); the regulation states the positive rule for citizens (worldwide income, wherever resident).
Statutory history note
§ 7701(b) was added in 1984 as a consolidation of prior definitional law that had been scattered across the IRC and Treasury Regulations. Before 1984, the substantive rule was the same (alien status + failure to qualify as resident); the 1984 amendment made the rule explicit in IRC text. For analyzing The Federal Zone (1992) and its derivative texts, § 7701(b) is the operative text — it was enacted before publication and remains the operative text now.
Pre-1984 administrative readings of “nonresident alien” — including Treasury Decision 2313 (1916), invoked in The Federal Zone — cannot override the post-1984 statutory definition. The hierarchical principle: an Act of Congress beats a Treasury Decision on statutory construction. The IRC is the Act; § 7701(b) is its definition.
Verdict
Supported. A U.S. citizen cannot be a nonresident alien for IRC purposes. The conclusion follows from the express text of 26 U.S.C. § 7701(b)(1)(B) and is reinforced by 26 CFR § 1.1-1(b). The territorial-volunteer reading at the heart of The Federal Zone fails at this single statutory provision, regardless of what conclusions are reached on upstream interpretive questions about “United States,” “State,” “includes,” or Brushaber.
This finding pairs with the concept page on “nonresident alien” in the IRC (which develops the textual analysis at length) and the Brushaber essay (which addresses the case-law reinterpretation that the territorial-volunteer reading depends on).