Working While Travelling

As he explained it, he is "working" from the comfort of his home.  He wants to bring his home here so he can "work" from it.  Sure sounds like the IRS would have a case if he is "working" here and therefore earns his income here.  The fact that his company is not, doesn't seem to impact the fact that he is here, working and earning.

It would not be wise to confuse state and federal tax law with a logical explanation.  8)

COMer said:

As he explained it, he is "working" from the comfort of his home.  He wants to bring his home here so he can "work" from it.  Sure sounds like the IRS would have a case if he is "working" here and therefore earns his income here.  The fact that his company is not, doesn't seem to impact the fact that he is here, working and earning.

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I still wouldn't do it. To legally work in the US requires a work permit. That is another can of worms. And I still don't think he is working in the US.

This issue not only takes a tax expert, but one who has knowledge if this area of the law. We are not going to solve it.

Good point Ken. I assumed the OP was being sent here by his company, in which case a B1/B2 visa would suffice. Re-reading the original message, I'm now not sure of the intended arrangements.

Here's the USCIS page on tempoary (non-immigrant) worker visa requirements.

We keep on assuming (and you know what kind of trouble that gets you into) that the IRS plugs morality, logic or other factors into the equation. The IRS does what the IRS, in it's not so humble opinion, decides is compliance with US tax law. Everything else is poppycock. I'll say it again, talk to a tax expert and/or the Canadian consulate.

By the way, there are tax treaties between the US and Canada. If the Canadian files a US tax return and pays US taxes, I would expect that the income would be reported to Canada and the US taxes paid credited against the Canadian taxes. But of course, Canada may say that the income belongs to Canada and the tax should be paid to Canada.

All of that said, the IRS usually uses the taxpayer's tax home as the determining factor and where the income earned. In this case, is it in the RV or at the RVer's office in Canada. Of course, the employer is in Canada, the income is reported in Canada (I don't know if Canada has the equivalent of the Form W-2) and any taxes withheld would be in Canada. If it looks like a duck, waddles like a duck and quacks like a duck, does the IRS agree that it is a duck?

Ken & Sheila said:

But I don't think that morally he is working in this country by using the computer to work at the company in Canada (of course the IRS could take a different view). As Kim said he is just "traveling" through the US, not working here. Now if there are any business contacts made it the US that would make him working here.

ken

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I agree. I think he is working wherever his computer resolves to, in this case his company in Canada. When you go on vacation and take your laptop to do a bit of company work, are you "working" in the state where you're vacationing? Dang, if I went back to school, I could do my doctoral dissertation on this topic !

I doubt the Canadian consulate will be able to guess how the IRS will see things, any better than folks in this forum  ;D.  I also wonder if a tax pro in Canada would have any better insight into the US IRS  ???  As for tax treaties, based on my experience of such a treaty (summarized earlier), I'd say 'good luck'.

Meanwhile, if/when the OP talks to a tax pro, he should be aware that not all are familiar with the handling of double taxation issues.

[quote author=Wendy] Dang, if I went back to school, I could do my doctoral dissertation on this topic ![/quote]

If you don't go back to school, maybe you could do enough research to write an article for our forum library  ;D

Tom said:

If you don't go back to school, maybe you could do enough research to write an article for our forum library  ;D

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It could be fun. AND I'd have the beginnings of a great dissertation

Wendy

This makes an interesting campfire discussion but I feel confident that morally no taxes are owed in sj1980's situation but legally (from the IRS viewpoint) taxes are indeed owed. As Bernie says, the IRS is not noted for either moral positions, compassion or logic.  They pick a phrase from the tax code that they feel applies and then stick to it through hell or high water, despite any logical arguments to the contrary.

That said, I would NOT report the income earned in those circumstances. Your mileage may vary!

If you are working for a Canadian company, being paid in Canadian dollars deposited in a Canadian bank, and are visiting this country but aren't a permanent US resident, I don't think you legally OR morally owe US income taxes. As an accountant, I find this an interesting discussion and I'm doing some research to see if there is a definitive answer. More later.

Wendy

[quote author=Wendy]If you are working for a Canadian company, being paid in Canadian dollars deposited in a Canadian bank, and are visiting this country...[/quote]

That would appear to be the OP's case, although I didn't realize that on first reading. Bottom line is that, provided he's not 'employed' in the U.S., he'll be fine. Been there done that (legally) for an extended time.

... aren't a permanent US resident ....

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Wrong term; In my first response I linked to IRS Publication 519, U.S. Tax Guide for aliens (includes resident and non-resident aliens, both of which require the paying of taxes if working in the U.S.). 'Resident alien' and 'green card holder' are equivalent terms used for a 'permanent resident', but folks do not need to be permanent residents (or resident aliens or green card holders) to legally work and pay taxes in the U.S.

When we talk about resident/non-resident aliens, immigrant and non-immigrant status, they're determined by the US Citizenship and Immigration Service (previously the INS, Immigration and Naturalization Service). Each status has it's own process that must be followed. The previously linked UCSIS web site spells much of this stuff out.

IOW residency and immigration status are defined/controlled by a different agency than the IRS, so both must be researched together. I've been around both loops numerous times, personally and for family members and employees, with and without legal (immigration attorneys) and tax pro help, and have lots of horror stories for each scenario.

Good luck with your research. If I can share the benefit of having been in various residence/immigrant states and various tax statuses, let me know.

>>As Bernie says, the IRS is not noted for either moral positions, compassion or logic.  They pick a phrase from the tax code that they feel applies and then stick to it through hell or high water, despite any logical arguments to the contrary.<<

But they can be defeated in tax court - been there, done that - one case for a very large amount of taxes, when you win its fun but this case took 2 years to resolve - that part was not fun at all.

ken

I won a substantial one against the IRS too, and it didn't even have to go to Tax Court. I think I surprised somebody when I quoted their own regs back to them chapter and verse. And cited a Supreme Court ruling that pertained as well. Still took many months, though, and lots of formal, written documents. You have to be able to bureaucratese as well as they do.  8)

I've won twice vs. IRS and never had to go to court. It's not that hard if you have your paperwork all in order and have checked out the appropriate regs (boring reading, to be sure) AND ARE POLITE AND RESPECTFUL to the auditor, who is probably an underpaid GS-5 federal employee.

Wendy

I have dealt with the IRS in the past and I have been very impressed with their professional manner and with the help they gave me.

I prefer to have someone else represent me in front of the IRS, and happily pay for that.

Greetings,

Interesting take on this topic and a wide variety of opinions. I tend to agree with Gary and several others on their assessment. I hold multiple merchant certificates in several states so I can conduct business in those states. They simply state if you sell anything (even one item as a business) then you must collect sales tax. I then pay my federal tax when my accountant tallies up all of my items (and subtracts legal deductions).

To me it is black and white. Since the OP said he was only going to conduct business in Canada from his computer here, there should be no concern with filing anything. Otherwise anytime you made a business call while out of your state you would be liable and to me that is just stretching things too far. I agree the IRS might have other views.

You may need to find a business tax attorney in order to completely answer your question. Chances are that you will owe money to the IRS or at least need to report to them if you are working with the US for that extended period of time.

Edit: Removed commercial link

I used to work for a consulting company located in a particular state and would travel on business, visiting customers at various sites and teaching seminars.  My employer paid me for this work, but I certainly was never required to pay taxes on this income in each state I had traveled to and/or taught in.  I used my employer's equipment and that employer set up my schedule.  This is pretty typical of every business person who travels to customer sites around the U.S. 

I am currently teaching online while traveling for a college in one state while maintaining a domicile in another state.  I access the college software through the internet and am supervised by a department head and academic dean located in the college's home state. I am assisted in my work by staff located at the college.  I am really only accessing my employer's systems and students remotely.  I do not really think that I am "working" in all of the 23 states I have driven through in 2012.  I cannot see how this is different from when I traveled to Scotland in 2008 and to the Eastern Mediterreanean and remoely accessed my class while on those vacation.

I will have to pay taxes in my domicile state for my social security and interest and other stuff, and I assume some portion for the part-time work I am doing for my employer in the other state.  I can't imagine that I am responsible for those other 21 states.  Otherwise, we would all be declaring income in every state where we checked our email while on business travel!

I think the difference might be in situations where someone is self-employed or working on a commission on sales or who produces a product, although my son is a sales manager earning a partial commision on sales to all 50 states, and he files only in the state in which he lives.  I will certainly ask this question this year of the person I am going to get to help me with my taxes.