caleyjag

Hey all,

Back in April you guys were great and helped me get all my tax return problems sorted out. Thanks guys - a big help. Now I need some advice, pre-empting problems that I may have in 2009.


To recap, I am a J1 scholar. I currently have 6 months left on my J1 visa and my 2-year tax exempt period (ie I have been here for 18 months).

This post is therefore directed mainly at people who have done the J1 thing and chose to stay beyond the two year limit.

I am having a great time here, and would like to stay a bit longer than 6 months. The time has flown by and I still feel like I'm just settling in.

I am aware I will have to retrospectively pay my unpaid tax if I stay a day longer than the two year period. My guess is that this will amount to about $10-15k after interest and fines.

My plan is to apply for a job in the private sector for April 2009, allowing me some extra income to pay the tax. Firstly, are there any potential barriers to getting a new visa that I should be aware of? I am looking at US national labs in particular, which I think are capable of making these kind of things work.

Once my visa and job are set, what is the correct protocol for informing the IRS of my intentions? I would be filing this year's tax return before I start my new job (and violate the 2 year rule), so can I leave it until the 2009/2010 tax return until I need to panic?

I get the impression I should be open and upfront with them and try to work out some kind of payment plan for the ~$10-15k sooner rather than later.

Also, I have heard mention on here that the total amount owed to the IRS can be negotiated. Is this true? How do you go about negotiating? $15k is quite a lot of money so if it is possible to haggle I'd happily check out that option.

Hopefully some of you know the answers to these questions and can help me out. Cheers!

SamuearlJackson

Hi again Caleyjag,

A national lab might be a good way to go for you, or alternatively another post-doc position would work (if it paid well). Either way you will want the future employer to sponsor you for a H1-B visa.

To obtain the visa you will need to physically leave the USA and go to the embassy (in London for example) to get it. My understanding is that if you leave the USA before the 2 year period is up, this will bring to an end your J1 visit and you will not owe any taxes on money from your post-doc job. If you are returning the same year you will be dealing with an interesting tax return. I recommend calling the IRS and/or consulting a tax specialist who has experience dealing with foreigners to get clarification on this.

Hope this helps,
Sam

edit - alternatively the J1 could possibly be renewed (upto a total length of 5 years from when you first entered), but then there would be no way around not paying the tax for sure.

caleyjag

My current boss would sponsor me for an H1-B in two seconds. However I can't believe that would exempt me from paying the back tax. That sounds too good to be true!

If it were though, that would mean I could stay in my current job (on an H1B), which would be perfect. It is a great job.

If I have to pay the tax, I probably need a new job, which means probably moving from Seattle, which would suck terribly.

nc-gremlin

I was on a J1 for 3 years and had made use of the treaty. I was originally given wrong information by the university so paying back the taxes came as a shock at the 2 year point! (A French colleague in the same situation did not have to pay anything back as the French had a better treaty).

I had to file 1040-X's on federal and also had to file retrocative state taxes. The IRS were easy to work with and allowed me to set an agreement up over the phone. The state tax people were utter pigs and would allow no agreements so I was forced to take a loan out to pay them back plus penalties. All told this cost me ~$10k (this was over 8 years ago).

Funding ran out at 2 years 2 months so I found another postdoc position fairly locally. They transferred the remaining 10 months of my J1 and then obtained a H1B1 for me. My tax issues did not cause any problems.

Bob

Can't remember if you said you didn't have the 2 year HRR or not? If you have it, then it's go home, but if you don't, options are a bit more open.

There's a thread from a few days ago on the L1 I think about not paying taxes that might be of interest.

caleyjag

Not sure what you mean by HRR?

I have claimed the J1 tax exemption for the past 18 months. Does that mean I have to go home? I thought I could stay here past the two year mark but would have to pay.

Washington has no state taxes so I don't need to worry about that. Federal taxes only.

I don't mind paying the back taxes, provided I can work out a pay rise or new job to cover the difference.

MsElui

HRR is the requirement of SOME J1 visa that the holder MUST return to the home country for at least 2 years after the J1 finishes. NOT every J1 has the same stipulation - so check the wording on yours.

caleyjag

Cor. Thanks. I had no idea. I thought the two year J1 thing was only for taxes. A quick glance on the net suggests I might be alright to stay, but I will check it out thoroughly.

It's never simple, is it?

Character building though!

MsElui

i believe its actually marked on the visa (but someone will correct me if im wrong) so might have to dig out your passport to see if it has the legend written on it.

nc-gremlin

It should be marked on the I-20 form you got with the visa.

caleyjag

Yeah, apparently it's on page 2 of my DS-2019, which I will check when I get home tonight.

On a related note, does working in the EU count as being in my resident country or does it have to be in the UK?

I was thinking about a nice we jaunt in Austria or Sweden for a year or two if my west coast dream is cut short.

-G

meauxna

No, it has to be in your home country. It's (the 2-year HRR) related to gov't funding of your program, which is supposed to be an exchange program that will benefit your country as well as yourself.

Here's a couple of links you can use to determine if you are subject to the 212e and if you are, how to obtain a waiver.
People have reported that somewhere on the visa OR on the DS-2019 it may say 'subject to' or 'NOT subject to' 212e or similar. People have also reported that their documents are not always accurate, and even when they were sure they did NOT have the 2 year HRR, they did. So double check with *your* program/sponsor.

http://travel.state.gov/pdf/J_WaiverFAQ21-DEC-06.pdf

http://travel.state.gov/visa/temp/info/info_1296.html

Some helpful info from Berkeley (see The DS-2019 End Date): http://internationaloffice.berkeley....ing_ds2019.php

caleyjag

Thanks,

Pretty sure I have the 'not subject to' thing on mine - will check when I get home.

I am not quite sure if my funding counts as federal government or not. I am a salaried university employee, but it's a state (public) university. On the other hand I'm probably paid ultimately from a federal grant. Will need to look into that.

In the meantime, on the 'skills' list for determining if I have to go home to the UK:

http://exchanges.state.gov/education...on/waivers.htm

(pdf is clickable on the side there)

it does not list the UK, Great Britain or Europe.

Does that mean there is no skills arrangement between the UK and the US?

caleyjag

Ok, update:

Just looked at my passport/J1 visa.

On it, under 'Annotation', it says the following:

"BEARER IS NOT SUBJECT TO SECTION 212(E).
TWO YEAR RULE DOES NOT APPLY."


Does this mean I can apply for a new job (with new visa), and get down to the business of worrying about the tax I owe?

MsElui

yes - thats good news then!