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Posted by Alan on February 10, 2008, 12:52 am
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Phil Marti wrote:
> We had a client at VITA today whose situation raised a question we couldn't
> answer to my satisfaction.
>
> Facts. She is here on an F (student) visa and is in compliance with its
> requirements. She has an SSN valid for employment with DHS approval. She
> is employed part-time by the college she attends. She arrived in the US in
> 2005 and has not left since. She has applied for permanent resident status.
> The application is pending. She's from Moldova, and we aren't aware of any
> pertinent treaty provisions. She's unmarried and has no non-US source
> income for 2007.
>
> I have little experience with nonresident aliens, so I slogged my way
> through the return with extra care. We had filed a 1040NR for her for 2006,
> but her income was minimal, and she got a refund of all tax withheld. In
> 2007 the 1040NR leaves her with a tax liability of about $300.
>
> When I researched what benefit she could get for her education expenses is
> when the confusion started. The Pub 17 discussions of both the tuition
> adjustment and the ed credits clearly state that they are not available to
> nonresident aliens. However, they also seem to imply that a nonresident
> alien can elect to be treated as a resident alien. If the client did that
> she'd get a full refund plus EITC. (I researched the DHS restriction on the
> SSN, and per Pub 17 it's valid for EITC.)
>
> The Form 8843 wasn't any help. She had a piece of paper furnished by the
> school that said all international students MUST file an 8843, but the 8843
> instructions imply that it's an election to have your presence in the US
> ignored for the physical presence test.
>
> I didn't have access to Pub 519 at the site, but I've looked at it now. It
> seems to indicate that there's no choice--a student in compliance with an F
> visa is a nonresident alien.
>
> The apparent conflict in IRS documents of equal weight has me stumped.
> Sorry for the length of this, but I wanted to try to get all pertinent facts
> in the first post. If anyone has a definitive answer as to whether she can
> elect to be treated as a resident alien, I'll be grateful.
>
I believe the reference in Pub 17 is to an individual who is
eligible to make the election to be treated as a resident for the
full year. This would include dual status aliens under certain
conditions and a nonresident alien spouse of a resident or
citizen. Individuals who are present as international students
on an F-1 visa are by definition exempt individuals. I.e., they
are exempt from the substantial presence test. They are not dual
status. As such, I don't believe they can make an election to be
treated as residents.
I suppose if you have an F-1 student who is married to a US
citizen or US resident, an election could be made.
--
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