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Immigration Tax Issues –The New Dynamic EnvironmentSpring 2005

Robert W. Alcorn, MBA, CPA

14881 Quorum DriveSuite 410, LB #9Dallas, TX 75254-7014Ph: 972/724-0325, Fax: 972/539-6226 robert@rwalcorncpa.com

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Introduction

Creating an Awareness of Common Tax Problems and Resolutions

Pay Particular Attention to Significant Recent & Ongoing Changes

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General Overview General Application of U.S. Tax

Laws to Non-Citizens

Non-Resident Alien, Dual-Status Alien, & Resident Alien

IRS vs. USCIS – Inter-Agency Communication

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Working Your Way Through the Income Tax Return – Common Problems and Resolutions

Name Pick One and Stick With It Agreement between Documents (Green

Card, Birth Certificate, Driver’s License, Social Security Card, etc.)

Social Security Numbers (Real and Imagined)

Get an ITIN Refunds can be claimed

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Working Your Way Through the Income Tax Return – Common Problems and Resolutions (cont.)

ITIN’s – Individual Taxpayer Identification Numbers

Identity vs. Alien Status Documentation Requirements Time Requirements Acceptance Agent vs. Certifying

Acceptance Agent Include Original Tax Return with

Filing

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Working Your Way Through the Income Tax Return – Common Problems and Resolutions (cont.)

Filing Status Categories Single Married Filing Jointly Married Filing Separately

Community Property Issues Head of Household/Married but Living

Apart Union Libre, Common Law Marriage (and

the Unfortunate Case of Juan Doe)

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Working Your Way Through the Income Tax Return – Common Problems and Resolutions (cont.) Dependents

U.S., Canada, & Mexico

Wages vs. Self-Employment The SE Tax Trap

Tax Credits Deductions vs. Credits Refundable vs. Non-Refundable Earned Income Credit (Need SS#) Child Tax Credit (Don’t Need SS#)

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Statutes of Limitation & Other Restrictions of Time Original Returns

Amended Returns (and the Fraud Clause)

Claims for Refunds

Obtaining Copies from IRS Transcripts – Allow 30 days Requests for Copies – Allow 2 to 4 months

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Payment Options Monthly Installment Plan

Offers In Compromise

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Attorney-Tax Preparer Communications: Doing Your Client a Service and Making Your Job Less Difficult

Competent in Immigration Tax

Knowledgeable About the Immigration Process (Presents Options)

Communicates with the Attorney

Responsive – Sees the Bigger Picture

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Recent and Unresolved Developments in Immigration Tax Matters

Interagency Communications ITIN Applications President Bush’s Proposals Regarding

Workers Tax Return Transcripts and Copies $150 Filing Fee for Offers in Compromise Proposal to Apply Non-Resident Alien Tax

Status to ITIN Holders Proposed Changes for Acceptance Agents/

Certifying Acceptance Agents

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Final Words

At this moment, this entire area of tax and immigration law is in the process of going through significant changes and we can only watch as these issues work their way through the process. Anyone involved in this area needs to stay alert for ongoing developments.