Michael

Sorry, I missed that the two envelopes contained different forms even though you stated it several times. I don't know where my brain was.

That now makes sense and I probably now understand why the FICA form can be filed separately. I didn't realize that the IRS allows forms to be filed without a 1040 attached so apparently I kept thinking that a 1040 was filed in both envelopes. I guess my brain assumed that there had to be a 1040 so I visualized it. It appears that in this case, the IRS allows the FICA form to arrive separately since it doesn't affect the calculations on the 1040 (usually forms effect the calculations on the 1040). I always assumed that if a person needed to file a form that wasn't included in the original return, they would have to file an amended return (1040x) to add that form.

Sorry about giving you a hard time.

bealerDSB

No problem at all Sir. Keep you posted...
DSB.

Cook_County

Form 8833 is kinda extraordinary because it is a treaty form which is only of any use at all if it over-rides domestic US law. Which country and Articles are listed on Line 1 and which section of the Code does it say is over-ridden on Line 2?

Is this a 6114 position or one under Regulations section 301.7701(b)-7?

Michael

Normally that is true if a foreigner was working in the US or a USC was working in a foreign country but in his case, he is a non resident so shouldn't have had FICA taxes withheld. In his case, there is no treaty to define but the CPA is probably just using that form to get the refund with an explanation as to why he should get his FICA taxes refunded.

Disenchanted

Where is the icon for the EXPLODING HEAD??? We need one immediately.

Cook_County

But getting FICA refunded is kinda easy - file Form 843. A treaty based US income tax return ain't going to cut the mustard.

Michael

It appears the CPA is using form 8833 (treaty based form) just as an explanation of why the filer should get an income tax refund since there is no treaty but since he is a non resident and not a USC, income taxes shouldn't have been withheld from his pay and his income shouldn't have been reported to the IRS. I suspect that form 8833 automatically gets kicked to an IRS auditor immediately since the refund doesn't make any sense to the software and therefore needs to be verified by an IRS auditor.

Form 843 for FICA has the same problem. Since his salary was reported to the IRS, excess FICA withholding was not taken and in theory he shouldn't get a refund. However, again it appears the CPA is using that form with an explanation about the filer's status to get the refund. Again I suspect that when refund is requested for FICA and the refund doesn't make any sense in relation to the reported income, an IRS auditor is immediately notified. He then read the explanation on form 843 and if it is well written and makes sense to the auditor, he then approves the refund. For example, if the filer has a reported income and the correct FICA tax was withheld for that income, form 843 would normally not help to get a refund since the amount of the FICA tax withheld looks OK as far as the software is concerned.

So getting a refund in either case is a little tricky because reported income in relation to taxes due or paid doesn't make a lot of sense unless income was reported and taxes were withheld mistakenly. So the system has to be tricked to somehow get the returns to an IRS auditor to look at.

bealerDSB

"If you have not received the 2012 refund(s) by May 1, 2013 contact me again at that time and I’ll review the IRS Master file to provide a status for you. The process does take time so please be patient."

DSB.

bealerDSB

This is what was sent and where;

1 1040NR 2007 TX
2 843 2007 TX

3 1040NR 2008 TX
4 843 2008 TX

5 1040NR 2009 NC
6 843 2009 TX

7 1040NR 2010 NC
8 843 2010 TX

9 1040NR 2011 TX
10 843 2011 TX

So far I have been refunded for 2012, updates to follow on others...
DSB.

Michael

So that has been going on a long time. Did you get your employer to stop the withholdings? You'll also have to file at the beginning of next year if you want refunds for what you paid already this year.

bealerDSB

They employer is sitting tight and still witholding, as they have a hold enforced thru IRS since FEB. I'm sure / hoping, this recent refund is a domino effect for the other years. Leading towards a lift for 2013.

DSB.

bealerDSB

Small update;

Received a 2009 IRS refund.

Have been told 'officially' that once the IRS have processed & then refunded all years one by one, they will...

Attend to the 843 Forms regarding SS, and each 843 will take 12weeks to process / refund.

DSB.

Steve_

So your tax home is in Spain, not the US.

Okay that is totally wrong, you shouldn't be on a US payroll, you don't live there, you should not be paying any US taxes at all.

Yeah, because they think you're a non-resident alien (which you are) and you haven't filed an 8833 to tell them what tax treaty you're claiming under to exempt yourself from it.

So where is your tax home then? Can't be the US if you don't live there, where is your principal residence?

Yeah, the correct one, because you've completely ballsed up your tax situation absolutely.

The only way of a US employer paying you if you live in Spain is if they have a payroll in Spain, or wherever it is that you actually live.

You should either be self-employed or have your own company (i.e. your own payroll) and invoice the US company. You file a W-8BEN with them and claim the relevant tax treaty on it so that that money is not subject to NRA withholding (or whatever rate is specified in the treaty).

You have to pay the taxes where you actually live, that is Tax 101. Wherever you are resident you could be facing all kinds of stuff related to tax evasion. Bear in mind the IRS have information sharing arrangements with a lot of other developed countries.

Your real problem is that you are going to face an enormous tax bill from wherever you are resident for tax purposes, because you haven't paid the tax for years.

Michael

Not necessarily. His work is in a war zone which is normally non taxable to the country where the war is fought. Some countries don't tax earned income made outside the country of residence or the don't live long enough in the country to establish residence. However if he uses government services such as health care, that may possibly automatically trigger residence. Each country make it's own determination when residence is established.

Steve_

He's clearly not resident in the US and he's got to be resident somewhere. Working in a war zone simply makes you more resident in your tax home country (because you're exempt from paying taxes in the country where the war is) and that isn't the US in his case.

I haven't read all through the thread but it looks as though he's been doing this for some time.

There's a three year cut off for filing amended returns, so all the money to the IRS before that is gone. He could file a 1040X for the last three years and get his money back and use that to pay off the tax bill wherever he is resident, but he would still owe the prior years and the penalties in the country where he resides.

Plus if he does that, the IRS may sanction his employer for withholding when they shouldn't have done, plus the tax authorities where he resides may also sanction his employer for not doing withholding.

Honestly it looks to me as though someone at the Austin Service Center took pity on him and decided to hit him with NRA withholding so that he would sort out his mess, because the IRS don't care if you pay them money you don't owe them.

And finally, if all that isn't bad enough, you can't just sort it out now and hope no-one notices what happened previously because they will notice because of the information sharing agreement the IRS probably has and they already have noticed.