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Tag Archive for nonresident aliens

Taxpayer Advocate Criticizes Hardships Faced By Nonresident Aliens Trying To Obtain Refunds Of Withheld Tax

In a scathing blog published this past week, National Taxpayer Advocate Nina Olson criticized the significant roadblocks that meet nonresident aliens (“NRAs”) trying to rightfully obtain refunds of withheld tax from the IRS. The roadblocks stem from a recent general freeze by the IRS on credits claimed on Forms 1040NR, U.S. Nonresident Alien Income Tax Return, which do not match with the information provided on Forms 1042-S filed by withholding agents.

The Taxpayer Advocate is an independent office within the IRS tasked with helping people resolve tax issues with the IRS and recommending changes that will prevent future problems. It’s always interesting to hear the point of view of the office responsible for taking the IRS to task for its missteps in handling taxpayer issues. Read more

Taxing Capital Gains Of Nonresident Aliens Residing In The US- The 183- Day Rule

Ephraim Moss, Tax Connections

For a unique group of foreign individuals (i.e., non-US citizens referred to in the tax world as “aliens”), living in the U.S. does not trigger “resident” status for tax purposes. These so-called “exempt” individuals include foreign studentsforeign scholars, and alien employees of foreign governments and of international organizations in the United States. U.S. tax law considers this lucky bunch to be exempt from counting days of presence in the United States for the purposes of determining whether they are resident aliens of the United States. Read more

Foreign Persons As S Corporation Shareholders: Risky Business – Part II

Part I of this blog post detailed the requirements for eligibility for electing S corporation status, maintaining it, as well as the tax benefits of being an S corporation. It also outlined how S corporation status can be lost. The possible loss of S corporation status becomes very tricky when a foreign shareholder is involved, since nonresident aliens are not permitted to be shareholders in an S corporation. If a foreign national is a shareholder and is a US “resident” for income tax purposes, then S corporation status is fine, but it must be remembered that the other shareholders do not have control over the individual’s maintenance of his US “resident” status.

How to Prevent Inadvertent Termination of S Corporation Status

Steps to prevent the inadvertent termination of S corporation status should be undertaken Read more