Certifying US Residence

Today TaxMama hears from Emilia in the TaxQuips Forum with an interesting situation. Emilia and her husband are US citizens working in Peru. Her husband is taking a temporary assignment in Mexico – and needs to prepare a Form 8802. They are confused about some of the rules – and IRS does not offer clear guidance.

Hi Emilia,

 Interesting. I’ve never seen this Form 8802 before. Thanks for the introduction. Looking at the 4th page, there IS a place/code for Mexico. There isn’t one for Peru. Mike Emeigh, the NC TaxPro explains that the US doesn’t have a tax treaty with Peru. Mike provides a detailed explanation about this certification process.

Looking at the instructions on Form 8802 for the Form 1116, yes, it’s pretty clear that the question about being entitled to the Foreign Tax Credit is general.  IRS just wants to know that as an American taxpayer, you really are entitled to that tax credit. So give them as much paper as they can possibly have.

Mike explains that Emilia and her husband need to provide documentation to demonstrate that they were not taxed as Peruvian residents, but rather as US residents, on the income taxed by Peru for which they are claiming a foreign tax credit on Form 1116. That’s what they will have to provide to the IRS as an attachment to Form 8802.

When it comes to explanations, use tabs to identify each set of documents – and a table of contents that describes each one. Usually, it helps. Other times, some bureaucrat gets his/her hands on it and doesn’t even read the docs – sending a request for the docs that are already there.

And remember, you can find answers to all kinds of questions about foreign tax considerations and other tax issues, free. Where? Where else? At www.TaxMama.com.

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