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I am trying to determine my residency status for US tax purposes. According to the substantial presence test, I am a resident alien of the United States.

This is going by the days that I've been in the country in 2013 (1/6), 2014 (1/3), and 2015 (1). Throughout those years I had visited the US on numerous occasions because my SO (now wife, who is currently also working in the US but would be considered an non-resident alien because of F-1 visa) was studying there, and in 2014 I was there for an extended period working under a TN visa, then went back and returned under a different TN visa in the summer of 2015. So based on my travel history alone, I would be, at least for the latter part of 2015, a resident alien of the US.

Note, I did not work/live in the US from January – July 2015. Guess I would still be classified as a non-resident alien during that time (is anyone in the world, if they aren't a citizen or resident alien, considered a non-resident alien, or is there another status, such as "no status"?).

My question pertains to what constitutes a sufficient "closer connection" for form 8843, what constitutes a 'tax home', and whether you need to fulfill all of these conditions to qualify for the exemption?

  1. Are present in the United States for less than 183 days during the year : I was in the US for more than 183 days during 2015
  2. Maintain a tax home in a foreign country during the year: I earn investment income etc and file taxes in a foreign country, but I work and spend most of my time in the US. I have access to homes (parents) in a foreign country and return there fairly several times a year
  3. Have a closer connection during the year to one foreign country in which you have a tax home than to the United States. *I definitely have a close connection to my home; I have belongings there, financial accounts, have driver's license, family, religious/community/social ties, vote there, file taxes there, and plan to return within a year or two.

Now the language seems to imply you have to fulfill all three of the above conditions to qualify, but I have someone else suggesting differently. (Also seen elsewhere the IRS using the word 'and' in a possibly ambiguous fashion Form 8843 "Statement for Exempt Individuals and Individuals With a Medical Condition", although this example isn't that ambiguous when you think about it).

Thanks

EDIT: My home country, Canada, has a tax treaty with the US, which according to my colleague (mentioned above) overrides the domestic US law. Was confused because my colleague seemed to say that I can file 8840 even though I have over 183 days, but they were actually referring to tax treaty, and according to the Canadian laws, I could actually be considered a resident (http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html), although I only have the secondary ties and it's not a well-defined set of rules on that page).

  • Were you able to use the form 8840 to claim the closer connection exception? – Suco Jun 15 '18 at 7:56
  • According to the accountant I filed with, the 8840 cannot be used if you exceed the number of days. Instead I relied on tax treaty based on my imminent intent to return to Canada and didn't have any trouble. I believe the exemption claim was indicated directly on the main tax form. – shim Jun 15 '18 at 16:03
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You're fighting an uphill battle here.

The use of form 8843 is exactly for situations where you need to fight an uphill battle - convince the IRS that while the categorical tests say you're a resident, the facts and circumstances show that you're not.

The decision in such cases made on a case by case basis, so there's no definitive answer. However, satisfying all the conditions would definitely make your life easier.

From your description of the situation, I as a devil's advocate, would argue that you don't actually satisfy any of those.

Days count is easy - you're not satisfying it. You can, theoretically, pass the substantial presence test without being 183 days in the country in the given year. But in your case you've been in the US for more than 183 days.

Tax home in a foreign country - I don't see how you satisfy that now. The TN status clearly shows that you've moved to the US.

As to the closer connections - your SO is in the US and you moved with the SO. That is one close connection. You obviously have a US driver license (and if you don't, you're likely breaking a State law), I'm not sure if voting there is relevant since it is your citizen right, and I'm not sure how your religious ties can be there - are you flying to Canada every weekend to attend the services?

So, if you try and look at this from the perspective of an IRS agent - I'd say your case is quite weak.

But it doesn't mean you shouldn't try, as I said - the decision is made on a case by case basis, and you may very well get what you ask for.

  • Just going off of the list here: irs.gov/Individuals/International-Taxpayers/… with regard to things like religious ties etc but I see your point. Really helpful answer. Also, my wife is considered a non-resident still, not sure if that is relevant. – shim Mar 18 '16 at 5:29

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