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March 8, 2012 - Phil Hodgen

Mexican cross-border families and U.S. taxation

I received an email today from a CPA with an interesting situation.  I shot him a quick email to respond to a question, but the situation is interesting enough that it is worth sharing.

His comment:

I have a practice in (U.S. city near the US/Mexico border).  I’m seeing a prevalence of a nonresident alien spouse & children living in the U.S. for security purposes while the working spouse lives and works in Mexico.  Working spouse visits family in the U.S. for short periods of time (no substantial presence), brings cash for living expenses, mortgage, etc.  In this case, I believe that there is no U.S.

... continue reading
Nonresidents with US Activities
March 5, 2012 - Phil Hodgen

How to make a treaty election to be a U.S. nonresident

I received a comment on a blog post asking how to make the treaty election to be treated as a nonresident of the United States.  I answered how to make the treaty election in the comments, but it is a useful enough question that I thought it deserves a blog post of its own.

Why make a treaty election?

You make an election under an income tax treaty if you would be treated as a resident of the United States and a resident of another country for income tax purposes.  You don’t want to be taxed as a resident in two places at once, on the same income.... continue reading

Nonresidents with US Activities
August 28, 2011 - Phil Hodgen

List of international tax forms (first draft)

 

Upcoming speech

I am going to be giving a one-hour high speed presentation at the 2011 Tax Update and Planning Conference sponsored by the California Society of CPAs. It will be presented in Universal City, San Francisco, and on the web.

My hour is intended to give practitioners a checklist approach to the various tax and reporting forms they might need to know about in the international context. For someone who deals primarily with domestic stuff, the international world is a mystery. I want to dispel that mystery a bit.

First draft of a list

Here, from my course materials for my Tax Planning and Compliance for Multinational Families course is where I am in gathering a comprehensive list of all of the tax forms that are specific to international tax practice.... continue reading

American Business Abroad Nonresidents with US Activities US Real Estate Investments
August 7, 2011 - Phil Hodgen

The substantial presence test explained

My quest is to make it easy for you to figure out the basic stuff. Send me the hard problems. 🙂

Here’s a basic one. It applies to individuals who are not citizens of the United States but they intend to spend time in the United States. How do they figure out whether the U.S. will treat them as a resident for income tax purposes?

This came about because today someone wants me to do an opinion letter (for real money) about whether a person is or is not a U.S. resident for income tax purposes. Not to get all jargon-y on you ‘n stuff but it has to do with the “substantial presence test.”... continue reading

Nonresidents with US Activities
January 18, 2011 - Phil Hodgen

IRS wants US banks to report interest earned by nonresidents

Our government is in the throes of attempting to force U.S. banks to report interest earned by nonresident depositors.  This is stupid on stilts.

  • Bank interest earned by nonresidents is not taxed in the USA.  This is built into the Internal Revenue Code.
  • If nonresidents have a choice where to put their money (and they do), they will deposit their money where they won’t get taxed.
  • If US banks don’t get deposits, they’ll be weakened.  Or to use Wall Street jargon, they’ll get more weakerer.

It is as obvious as sunrise what will happen if the Department of Treasury does this.  ... continue reading

Nonresidents with US Activities Voluntary Disclosure