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  #21  
Old 16.03.2012, 20:38
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Re: IRS letter! Unexpected Bill

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No your wrong. I do this for a living. Would imagine I'd be struck off by now. Ok, re-reading what I wrote I can see actually how my sentence may have been misintepreted.
You can qualify after a full calendar / tax year for bona fide residence. Providing you establish permanent quarters i.e. even if you are on an international assignement for 2 years, you can still be a bona fide resident irrespective if you will return to the United States.
Likewise, in the case of the OP, he advised he had been an expat in Switzerland since 2007, thus my comment in reference to him was correct.
Your sentence
[QUOTE=JordanBarrZurich86;1515211]Once you complete a full calendar taxy ear outside of the US, than you are a Bona Fide Resident. You can claim the s.911 exclusion.
...It is evident you qualify for BFR, they will know this from prior year returns and indicating your tax home and date on Form 2555...
[/QUOTE
wasn't misinterpreted, it was incorrect, for the reasons I stated: there is no extension from prior years' status.

The two parts boldfaced above in your last post are also incorrect. (1) A full calendar year per se is not sufficient, nor are "permanent quarters" sufficient. See IRS Pub 54 for details and for examples. You can have permanent quarters is CH, but still have sufficient US nexus so that you are not a bona fide CH resident. (2) You are again implying (as you stated clearly previously) that there is some continuity to prior residence status; as IRS Pub 54 makes clear, the tax status is dependent on the facts each year, hence prior years are not relevent. Thus, your comment above that the IRS should check his address on previous tax returns is silly.

P.S. you may do this for a living, but you are not a US attorney or CPA are you?
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  #22  
Old 16.03.2012, 21:16
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Re: IRS letter! Unexpected Bill

[QUOTE=jwalker46;1515617]Your sentence
[QUOTE=JordanBarrZurich86;1515211]Once you complete a full calendar taxy ear outside of the US, than you are a Bona Fide Resident. You can claim the s.911 exclusion.
...It is evident you qualify for BFR, they will know this from prior year returns and indicating your tax home and date on Form 2555...
[/QUOTE
wasn't misinterpreted, it was incorrect, for the reasons I stated: there is no extension from prior years' status.

The two parts boldfaced above in your last post are also incorrect. (1) A full calendar year per se is not sufficient, nor are "permanent quarters" sufficient. See IRS Pub 54 for details and for examples. You can have permanent quarters is CH, but still have sufficient US nexus so that you are not a bona fide CH resident. (2) You are again implying (as you stated clearly previously) that there is some continuity to prior residence status; as IRS Pub 54 makes clear, the tax status is dependent on the facts each year, hence prior years are not relevent. Thus, your comment above that the IRS should check his address on previous tax returns is silly.

Strange.

6 years

4 firms

2 big fours

Qualified

Zero IRS audits disputing said position

Either very lucky and 4 incorrect top 100 firms
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  #23  
Old 16.03.2012, 22:23
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Re: IRS letter! Unexpected Bill

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How does one prove to the IRS their intention to remain in Switzerland for an "indefinite or extended period" when they only have a B permit?
It is actually very, very easy to establish your CH residence. The CH permit is not of interest to the IRS (it is not a criteria under US law).
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  #24  
Old 16.03.2012, 22:27
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Re: IRS letter! Unexpected Bill

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Qualified
Either very lucky and 4 incorrect top 100 firms
"Qualified" by whom??
Wegelin thought they were lucky, too.
Curously, you declined to reply to the question: are you a US attorney ?
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  #25  
Old 16.03.2012, 22:27
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Re: IRS letter! Unexpected Bill

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You can have a domicile in the US AND a bona fide residence in Switzerland.
Perhaps, but I never have had that.

I got an unlimited B, and had nothing in the US (assets, property, etc.).

By what stretch of the imagination is that not a bonafide residence?

Tom
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  #26  
Old 16.03.2012, 22:36
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Re: IRS letter! Unexpected Bill

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Perhaps, but I never have had that.
I got an unlimited B, and had nothing in the US (assets, property, etc.).
By what stretch of the imagination is that not a bonafide residence? Tom
Tom, If you moved from the US to CH (as I moved from the US to FR), and have no home/property in the US, then of course your bona fide residence is in CH.
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  #27  
Old 17.03.2012, 00:15
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Re: IRS letter! Unexpected Bill

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It is actually very, very easy to establish your CH residence. The CH permit is not of interest to the IRS (it is not a criteria under US law).
Why does the tax form ask which type of residence permit you have then?
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  #28  
Old 17.03.2012, 04:35
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Re: IRS letter! Unexpected Bill

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"Qualified" by whom??
Wegelin thought they were lucky, too.
Curously, you declined to reply to the question: are you a US attorney ?
Not a US attorney, nor do I need to be.

And you are correct, Publication 54 is clear, page 14 clearly states my points to be correct.
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  #29  
Old 17.03.2012, 11:32
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Re: IRS letter! Unexpected Bill

Barn doors and all that...I always photocopy stuff like tax forms before sending them.

Cheers,
Nick

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Foolishly, I dont remember what I filled out but I believe I was physically in the country for less than 330. (I did a lot of travelling) However, my time int he USA, totaled about 2 weeks.
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  #30  
Old 17.03.2012, 11:47
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Re: IRS letter! Unexpected Bill

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Why does the tax form ask which type of residence permit you have then?
No, "the" tax form (we have only one now?) does not ask for the type of residence permit you have.

If you have in mind Form 2555 line 15b, it asks only for your visa on entry to a foreign country, not your current visa or residence permit. Those are often not the same. The 'why' is evident from the other line 15 questions: to detect people with a US home who went abroad on a restricted (limited duration) work visa; they will find it difficult to qualify as a bona fide foreign resident.

(If you have in mind another form or line item, please tell us.)

The context of the discussion above was whether or not you can be a bona fide foreign resident with a CH "B" permit, and the answer remains "yes."
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  #31  
Old 17.03.2012, 12:27
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Re: IRS letter! Unexpected Bill

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Not a US attorney, nor do I need to be. And you are correct, Publication 54 is clear, page 14 clearly states my points to be correct.
Well, here are the two points you started with, and why they are wrong.

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Once you complete a full calendar taxy ear outside of the US, than you are a Bona Fide Resident.
Wrong; the bona fide residence test requires more than a full calendar year outside of the US. "Questions of bona fide residence are determined [by] factors such as your intention, the purpose of your trip, and the nature and length of your stay abroad." (IRS Pub 54, pg 14 column 1)

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...It is evident you qualify for BFR, they will know this from prior year returns and indicating your tax home and date on Form 2555....
Very, very wrong; prior year returns are not sufficient to establish bona fide residence. You have to file a Form 2555 each year that you claim an earned income exclusion. "The IRS decides whether you are a bona fide resident of a foreign country largely on the basis of facts you report on Form 2555. IRS cannot make this determination until you file Form 2555." (IRS Pub 54, pg 14 column 1)
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  #32  
Old 17.03.2012, 15:17
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Re: IRS letter! Unexpected Bill

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Well, here are the two points you started with, and why they are wrong.


Wrong; the bona fide residence test requires more than a full calendar year outside of the US. "Questions of bona fide residence are determined [by] factors such as your intention, the purpose of your trip, and the nature and length of your stay abroad." (IRS Pub 54, pg 14 column 1)


Very, very wrong; prior year returns are not sufficient to establish bona fide residence. You have to file a Form 2555 each year that you claim an earned income exclusion. "The IRS decides whether you are a bona fide resident of a foreign country largely on the basis of facts you report on Form 2555. IRS cannot make this determination until you file Form 2555." (IRS Pub 54, pg 14 column 1)
Sorry but you are simply wrong.

Anyone in this forum can look up the publication and see my points were correct.

It discusses maintaining domicile is different to BFR. It discusses how a complete calendar year is required. It discusses permanent quarters as I mentioned. And then says you are BFR in this case irrespective if your intentions to return. So please stop wasting my time.

I was not implying a carryover of determination, yes it is a yearly filing, I was merely pointing out that it is evident from prior years and even current year that his residence remains Switzerland, and he has been here since 07. No disputing BFR. Thus, whilst I am fully aware the IRS do not practice common sense, they would save themselves and their citizens a lot of time, stress and MONEY by not even bothering with such frivolous disputes
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  #33  
Old 17.03.2012, 15:34
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Re: IRS letter! Unexpected Bill

Bona fide residence. To meet the bona fide residence test, you must have established a bona fide residence in a foreign country.
Your bona fide residence is not necessarily the same as your domicile. Your domicile is your permanent home, the place to which you always return or intend to return.
Example.

You could have your domicile in Cleveland, Ohio, and a bona fide residence in Edinburgh, Scotland, if you intend to return eventually to Cleveland.

The fact that you go to Scotland does not automatically make Scotland your bona fide residence. If you go there as a tourist, or on a short business trip, and return to the United States, you have not established bona fide residence in Scotland. But if you go to Scotland to work for an indefinite or extended period and you set up permanent quarters there for yourself and your family, you probably have established a bona fide residence in a foreign country, even though you intend to return eventually to the United States.

You are clearly not a resident of Scotland in the first instance. However, in the second, you are a resident because your stay in Scotland appears to be permanent. If your residency is not as clearly defined as either of these illustrations, it may be more difficult to decide whether you have established a bona fide residence.

Determination. Questions of bona fide residence are determined according to each individual case, taking into account factors such as your intention, the purpose of your trip, and the nature and length of your stay abroad.
To meet the bona fide residence test, you must show the Internal Revenue Service (IRS) that you have been a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. The IRS decides whether you are a bona fide resident of a foreign country largely on the basis of facts you report on Form 2555. IRS cannot make this determination until you file Form 2555.
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  #34  
Old 17.03.2012, 15:52
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Re: IRS letter! Unexpected Bill

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Anyone in this forum can look up the publication and see my points were correct.
Well, I just took your suggestion, and read the Publication 54, and the sections quoted above. It seems quite clear to me that your statements cited by jwalker46 are quite wrong. What is odd is how you keep trying to amend what you said, without admitting error.
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  #35  
Old 17.03.2012, 15:58
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Re: IRS letter! Unexpected Bill

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Well, I just took your suggestion, and read the Publication 54, and the sections quoted above. It seems quite clear to me that your statements cited by jwalker46 are quite wrong. What is odd is how you keep trying to amend what you said, without admitting error.
You mean the snippets cited and reference to original post I made in isolation and not the clarified post or posts. I have posted the actual publication. The bold points make it quite clear
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  #36  
Old 19.03.2012, 11:53
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Re: IRS letter! Unexpected Bill

I've just looked back over my tax returns and also declared 'physically present' in both 2008 and 2009, even though I should have used the 'bona fide residence'. I guess I will be amending these returns before I also get a letter.
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  #37  
Old 19.03.2012, 12:35
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Re: IRS letter! Unexpected Bill

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I've just looked back over my tax returns and also declared 'physically present' in both 2008 and 2009, even though I should have used the 'bona fide residence'. I guess I will be amending these returns before I also get a letter.
There's no harm in claiming the physical presence test if you actually pass it. Provided you were out of the country 330+ days each year, you don't need to amend your return.
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  #38  
Old 19.03.2012, 14:39
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Re: IRS letter! Unexpected Bill

OK. I will stand as impartial judge

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Wrong; the bona fide residence test requires more than a full calendar year outside of the US. "Questions of bona fide residence are determined [by] factors such as your intention, the purpose of your trip, and the nature and length of your stay abroad." (IRS Pub 54, pg 14 column 1)
i.e.

"you complete a full calendar tax year outside of the US"
=> "you are a Bona Fide Resident"

On a strict logical reading, jwalker46 is correct. probably down to sloppy use of language "you complete a full calendar tax year outside the US" probably meant "you have a bone fide resident outside the US including a full calendar year" but what is said is something different.

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Very, very wrong; prior year returns are not sufficient to establish bona fide residence. You have to file a Form 2555 each year that you claim an earned income exclusion. "The IRS decides whether you are a bona fide resident of a foreign country largely on the basis of facts you report on Form 2555. IRS cannot make this determination until you file Form 2555." (IRS Pub 54, pg 14 column 1)
I'll give this one to JBZ: I think he is just saying that from previous returns it is clear the at the BRT is claimed and there is a continuous period from the start date to today including the period under review.

Final score: 1:1.
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  #39  
Old 19.03.2012, 15:35
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Re: IRS letter! Unexpected Bill

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I'll give this one to JBZ: I think he is just saying that from previous returns it is clear the at the BRT is claimed and there is a continuous period from the start date to today including the period under review.

Final score: 1:1.
I still don't think JBZ should be awarded a point. It's not so clear that BFR was claimed in previous taxes(Subsequent taxes... yes). Maybe I missed it, but did OP ever say what he claimed on the 08 and 07 returns(BFR or PPT)? All I saw was the he filed 09 taxes very late.

In fact, from the info provided, the first tax year that OP would have been able to claim BFR in Switzerland would have been tax year 2009. He would have had to claim PPT for Tax year 08 since he was not BFR for a full calendar year.
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  #40  
Old 31.07.2012, 13:55
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Re: IRS letter! Unexpected Bill

Update:

So I did everything that was suggested here and more, sent in my tax return and waited for feedback. I got some today; in a new letter basically the same letter came as before. Without aknowledging whether my amended return was even received, it again requested money with additional penalties and interest. On the back it said that if i fail to respond they may or may have already placed liens on any property that I have. The letter is dated July 16th with a deadline to pay by July 26th!!

totally freaked out
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