Expatriates Tax Act of 1981

Expatriates' Tax Act of 1981 - Amends the Internal Revenue Code to exclude from gross income 80 percent of the income earned by a U.S. citizen from sources in a foreign country if: (1) the taxpayer establishes that he is a bona fide resident of that country; or (2) during any period of 12-consecutive months, he is outside the United States for at least 330 full days. Makes such exclusion optional at the election of a taxpayer.

Provides that such exclusion does not apply to United States government or military employees living abroad.