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File Income
Tax Returns Annually before April 15th
Deadline
Posted
Feb 13, 2009
©MurthyDotCom
One aspect of life in the U.S., with which foreign nationals living and
working here must become familiar, is the need to comply with U.S. income
tax laws. MurthyDotCom and MurthyBulletin readers are reminded
of the importance of complying with all laws, including U.S. tax laws, since
the annual deadline for filing personal income tax returns is April 15th.
Our legal practice at the Murthy Law Firm is limited to matters of U.S. immigration and
nationality law. Thus, any questions of tax law must be directed to an
appropriate tax professional. The requirement to comply with U.S. tax laws
and file U.S. tax returns by April 15th
or later with an extension, if granted, can be important to the success of
many types of immigration cases.
©MurthyDotCom
Sources of Information for International Tax
Payers
©MurthyDotCom
The Internal Revenue
Service (IRS) has a helpful website that provides answers to many
questions. This may enable one to engage in informed discussions
with a tax professional. There are links to publications that clarify
tax rules for foreign nationals. There are a number of useful links under
the heading of
international tax payers. Important topics include: taxation of resident
aliens, taxation of nonresident aliens, and determining alien tax status.
Note that IRS definitions of resident differ from those used in the
immigration context.
©MurthyDotCom
Does the IRS Share Information with the USCIS?
©MurthyDotCom
The
IRS cannot share individual tax information with the USCIS. The law
significantly restricts the data sharing authorization of the IRS.
Information about
disclosures can be found on the
IRS WebSite. The matter was
studied (PDF 1.5MB) several years
ago, but remains unchanged as of this writing. It is misguided to think
that, by not filing tax returns, one can avoid calling attention to any
immigration issues. In fact, it is the
failure to comply with U.S. tax laws that can create significant immigration
problems.
©MurthyDotCom
U.S.
Permanent Resident Should Not Claim
Benefits Reserved for Foreign Residents
©MurthyDotCom
A common problem seen by attorneys at the Murthy Law Firm is when a
permanent resident, temporarily living abroad, files U.S. tax returns
claiming certain exemptions based on establishing
a residence abroad. This can create problems for the individual with
respect to maintaining permanent resident status, as well as eligibility for
U.S. citizenship. A U.S. permanent resident must file taxes as a resident on
worldwide income, and may only claim
exemptions that are appropriate for residents.
There are also tax treaties that may exempt some of the income earned abroad
from U.S. taxes. For example, there is a U.S. - India tax treaty and similar
treaties exist between the U.S. and many other nations. However, claiming
these exemptions may be inconsistent with other claims of residence in the
U.S. Thus, anyone attempting to use tax treaties must understand and
appreciate the provisions and consult knowledgeable advisors for help in
filing the tax returns in such cases.
©MurthyDotCom
The IRS WebSite also has information on the treatment of income earned
abroad. It carries
FAQs, as
well as numerous publications, with
searchable topics.
The volume of information can be overwhelming, and should make it clear that
help likely will be needed by those who are new to this process, and often
even for those who are not.
©MurthyDotCom
Other Typical Problem Areas in Filing Returns
©MurthyDotCom
Besides the issue above, other typical problem areas for those new to the
U.S. tax system include the following:
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There are both
federal and state tax laws. Most states require additional tax return
filings.
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Categories of filing
(single, married, head of household, etc) have specific definitions. Do
not file “single” simply because one’s spouse is outside of the United
States. It is important to be sure the category selections are
understood when
making one's selection.
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Dependants
must be claimed correctly.
There are more sophisticated issues involving foreign earned income and tax
treaties, all of which should be discussed with an advisor who is
well versed in these complex matters.
©MurthyDotCom
Beware of Some Tax Preparers
©MurthyDotCom
Individuals who are not familiar with
U.S. tax laws need to seek proper advice and assistance from tax
professionals. We urge our readers to check the credentials of any
individual who may offer tax preparation services or tax advice. People
with more complex issues may wish to seek the services of tax
attorneys or Certified Public Accountants (CPAs). Those
with less complex issues may obtain the help they need through various
legitimate, often nationally-advertised tax preparation services. These
services can provide information about the requirements for their preparers,
as well as their policies regarding standing behind their work.
©MurthyDotCom
Conclusion
©MurthyDotCom
Mistakes on one’s tax returns can be costly and may lead to problems,
including immigration complications. Failure to file at all, when required to do
so, can be even worse. While the tax system can be intimidating, the key is
to find reliable sources of advice and assistance.
It is also very important to provide one's tax
preparer with correct information and complete records. Finally, do not wait
until the last minute. Retain copies of the tax filings for future reference
and as proof of having complied with the law by filing your U.S. taxes. |
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