IRS Form 8840

[sly_wolf 199]

I had a discussion with a Tax expert in Canada and he told me that any Canadian that spends a substantial amount of time in the US should be filing IRS form 8840. To give an example it would be like someone spending at least 122 days/year over 3 consecutive years such as snow birds. The IRS has certain rules for what they call "Tax Residency" and it is nothing to do with immigration rules.

I know this would probably mostly affect only those Canadians that have close border town relationships, but I wanted to share this info. The tax expert told me that in my case I should file this form for the last 3 years since I was a regular weekend visitor in the US .... all this to avoid any potential tax issues down the road. I wish I knew all this before since I am now obviously late filing this form.

Anyways, if anyone else has anymore info to share on this let me know. I hope this does not cause any issues with our current process. I suppose not.

Sly

[payxibka 10,047]

Resident alien for tax purposes is certainly a different "recipe" than simply your immigration residency.

The IRS has a 3 year look back and based on the days spent in country over the last three years (more heavily waited to current year), once you exceed the threshold then you are or can be considered a resident alien for tax purposes and subject to the "long fingers" of the IRS.

Form 8840 is designed to "break" this test if you are able to demonstrate a "closer connection" to a different foreign country...

http://www.gtsec.com/taxes/forms/form8840.asp

[sly_wolf 199]

Resident alien for tax purposes is certainly a different "recipe" than simply your immigration residency.

The IRS has a 3 year look back and based on the days spent in country over the last three years (more heavily waited to current year), once you exceed the threshold then you are or can be considered a resident alien for tax purposes and subject to the "long fingers" of the IRS.

Form 8840 is designed to "break" this test if you are able to demonstrate a "closer connection" to a different foreign country...

http://www.gtsec.com/taxes/forms/form8840.asp

Yes, from what I understand as a Canadian resident it's to basically avoid having to do a US tax return. They refer to it as a "substantial presence test". Lol, I hate tax

Sly.

[payxibka 10,047]

Resident alien for tax purposes is certainly a different "recipe" than simply your immigration residency.

The IRS has a 3 year look back and based on the days spent in country over the last three years (more heavily waited to current year), once you exceed the threshold then you are or can be considered a resident alien for tax purposes and subject to the "long fingers" of the IRS.

Form 8840 is designed to "break" this test if you are able to demonstrate a "closer connection" to a different foreign country...

http://www.gtsec.com/taxes/forms/form8840.asp

Yes, from what I understand as a Canadian resident it's to basically avoid having to do a US tax return. They refer to it as a "substantial presence test". Lol, I hate tax

Sly.

It is not to avoid doing a US return, it is to be treated as a Non Resident Alien instead of a Resident Alien... therefore only subjecting any US income instead of your worldwide income... The IRS will never allow you to AVOID preparing a tax return.....

[sly_wolf 199]

Resident alien for tax purposes is certainly a different "recipe" than simply your immigration residency.

The IRS has a 3 year look back and based on the days spent in country over the last three years (more heavily waited to current year), once you exceed the threshold then you are or can be considered a resident alien for tax purposes and subject to the "long fingers" of the IRS.

Form 8840 is designed to "break" this test if you are able to demonstrate a "closer connection" to a different foreign country...

http://www.gtsec.com/taxes/forms/form8840.asp

Yes, from what I understand as a Canadian resident it's to basically avoid having to do a US tax return. They refer to it as a "substantial presence test". Lol, I hate tax

Sly.

It is not to avoid doing a US return, it is to be treated as a Non Resident Alien instead of a Resident Alien... therefore only subjecting any US income instead of your worldwide income... The IRS will never allow you to AVOID preparing a tax return.....

I was speaking in terms of my case. I only have Canadian employment income, pay Candian taxes and also still live in Canada. Except for the coming 2008 tax year, I should not be required to file a US tax return based on the form.

Sly

[payxibka 10,047]

Resident alien for tax purposes is certainly a different "recipe" than simply your immigration residency.

The IRS has a 3 year look back and based on the days spent in country over the last three years (more heavily waited to current year), once you exceed the threshold then you are or can be considered a resident alien for tax purposes and subject to the "long fingers" of the IRS.

Form 8840 is designed to "break" this test if you are able to demonstrate a "closer connection" to a different foreign country...

http://www.gtsec.com/taxes/forms/form8840.asp

Yes, from what I understand as a Canadian resident it's to basically avoid having to do a US tax return. They refer to it as a "substantial presence test". Lol, I hate tax

Sly.

It is not to avoid doing a US return, it is to be treated as a Non Resident Alien instead of a Resident Alien... therefore only subjecting any US income instead of your worldwide income... The IRS will never allow you to AVOID preparing a tax return.....

I was speaking in terms of my case. I only have Canadian employment income, pay Candian taxes and also still live in Canada. Except for the coming 2008 tax year, I should not be required to file a US tax return based on the form.

Sly

You may have been thinking in terms of your case but you did not write it that way

The problem you will have is not the "substantial presence" test but the greencard test... As you will be a permanent resident UPON entry....

Edited October 9, 2008 by payxibka

[sly_wolf 199]

Resident alien for tax purposes is certainly a different "recipe" than simply your immigration residency.

The IRS has a 3 year look back and based on the days spent in country over the last three years (more heavily waited to current year), once you exceed the threshold then you are or can be considered a resident alien for tax purposes and subject to the "long fingers" of the IRS.

Form 8840 is designed to "break" this test if you are able to demonstrate a "closer connection" to a different foreign country...

http://www.gtsec.com/taxes/forms/form8840.asp

Yes, from what I understand as a Canadian resident it's to basically avoid having to do a US tax return. They refer to it as a "substantial presence test". Lol, I hate tax

Sly.

It is not to avoid doing a US return, it is to be treated as a Non Resident Alien instead of a Resident Alien... therefore only subjecting any US income instead of your worldwide income... The IRS will never allow you to AVOID preparing a tax return.....

I was speaking in terms of my case. I only have Canadian employment income, pay Candian taxes and also still live in Canada. Except for the coming 2008 tax year, I should not be required to file a US tax return based on the form.

Sly

You may have been thinking in terms of your case but you did not write it that way

Always easy to misunderstand things I also do understand that in 2008 and going forward I will be required to file a US tax return. Lol, at least I will get that right

Sly