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Author Topic: Foreign Snowbirds in U.S., IRS wants You!  (Read 45863 times)

catblaster

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #30 on: August 25, 2011, 08:48:02 PM »
Awwwwah come on now...you're hurtin my head. 1/3 days this year...1/6 days last year. substantial presence test..you can't be making this up!!  I was born here and now I think I have to leave :o
Will and Jane
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workingtorv

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #31 on: August 25, 2011, 08:50:10 PM »
We're in trouble I really don't think they will remember 3 yrs of the days they were in the US, she goes back and forth for day trips to shop.
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Tony_Alberta

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #32 on: August 25, 2011, 08:52:43 PM »
Awwwwah come on now...you're hurtin my head. 1/3 days this year...1/6 days last year. substantial presence test..you can't be making this up!! 
Actually it's all your days this year, 1/3 days last year and 1/6 days previous year for purposes of this calculation.

Hey I might be misunderstanding things.    But if you exceed those days you have to fill out that IRS form.  Or, conceivably, filing x years of USA income tax returns.
« Last Edit: August 25, 2011, 08:59:48 PM by Tony_Alberta »

catblaster

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #33 on: August 25, 2011, 09:34:26 PM »
We're in trouble I really don't think they will remember 3 yrs of the days they were in the US, she goes back and forth for day trips to shop.
  OK...another onion layer..how many hours can she stay before it becomes a full day.....ooooor...1/3 hrs yesterday and 1/6 hrs last week..you're killin me ???
Will and Jane
95 Winnebago Luxor

Tony_Alberta

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #34 on: August 25, 2011, 10:21:25 PM »
  OK...another onion layer..how many hours can she stay before it becomes a full day.....ooooor...1/3 hrs yesterday and 1/6 hrs last week..you're killin me ???
In fact they have that covered too in the section titled "Days of presence in the United States".   Page 3 starts at the bottom of the left hand column.  http://www.irs.gov/pub/irs-pdf/f8840.pdf   Unless you are traveling through the USA and you are staying less than 24 hours then any part of the day is counted as a full day.  There are other exemptions, such as crew on a foreign vessel, including one for medical.   

Hmm, I wonder what about my truck driving cousins?

Steve, CDN

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #35 on: August 25, 2011, 10:43:27 PM »
Quote from: Tom
Are you saying that Canadian visitors/snowbirds submit their passport to US border agents when leaving the US?

No, we submit our passport to Canadian Customs on return to Canada; the passport is scanned the same as when we enter the U.S.
 
I know the process is differnt for visitors from the U.K. but I'm not familiar with the details.  It involves a maximum number of days in the U.S., some documentation and there is a requirement they leave the U.S. for a specified time before returning for another cycle.
 
None of that applies to Canadians; we can stay as long as we want as long as we comply with the "non employment" rules and the IRS rules.
 
Quote from: workingtorv

I really don't think they will remember 3 yrs of the days they were in the US

If you think you will be in the U.S. close to six months in total, then a log should be kept if you plan to submit the 8840
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Tom

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #36 on: August 25, 2011, 10:52:32 PM »
Thanks Steve. I missed this part of your earlier message:

Quote
Our passports are scanned every time we enter and leave the Country and information is shared between our govenments.

When we entered Canada (at Niagara Falls, before we came to visit you and Ginette), the Canadian officer looked at, but didn't scan, our passports. She did, however, smile and say "have a nice day"  ;D

Are you sure our governments share information? Our government agencies can't share information among themselves  :o
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Steve, CDN

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #37 on: August 25, 2011, 10:57:49 PM »
Quote from: Tom
Are you sure our governments share information?

It has been my understanding, Tom but I may be mistaken. 
 
I believe passports with barcodes are being scanned.   Ours have been on recent trips.
 
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Hfx_Cdn

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #38 on: August 26, 2011, 06:12:31 AM »
     As with any discussion on this topic, it gets very confusing over exactly what we are saying or hearing.  As I understand it, and I too am not a lawyer, border agent or anything other than a retiree.  But as I see it we are confusing the following.
1)  Canadians are allowed entry to the US as a visitor for up to 6 months without paperwork.
2)  The US IRS uses a different formula to calculate foreign visitors time  in the US for tax purposes.. 
3)  That formula goes back 3 years.
4)  If Steve is correct, and I believe he is, all snowbirds should be filing a form f8840 with the US government each year, or risk a US tax liability on income earned in Canada.  I guess it is time for me to start submitting the form >:(
    Tom, as stated in a previous string, you are correct that US border officials do not require us to stop when leaving.  Also, since it is not necessary for a passport to enter Canada, they are not required to scan it.  However, it is usually done, and since they know we all have them as an entry requirement to the US, they routinely ask for it.  I am also of the understanding that Canada/US border agreements state that each country is only to provide the "free flow" of information for those with "criminal" backgrounds.  Yet, I have no doubt that when Uncle Sam asks, we answer without a second thought, so there is no hiding our departure date, besides as said earlier most of us use things that are easily traceable.
    I continues to be baffling as to why the US government would want to make it so complicated and difficult for tourists to come to your fine country and spend much needed dollars.  It is obvious that your economy is in such great shape that you don't want our money.

Ed
 
Ed & Donna
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Tom

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #39 on: August 26, 2011, 09:40:23 AM »
Quote
I continues to be baffling as to why the US government would want to make it so complicated....

Ed, as I tell folks, don't look for logic or simplicity in US government regulations.

Having spent a large part of my career attempting to read, understand/interpret, and comply with US government regulations, both from a distance and while here in the US, I have to say that I'm not baffled by the same thing you are. I'd occasionally tell a boss "I'm trying to keep you out of jail, but can't guarantee I'll succeed".

The first year we arrived as visitors and were asked to stay beyond 6 months, I figured I should file a tax return with the federal government and with the state of California. I went along to the IRS office and collected a tall stack of publications, each of which seemed to apply to our situation &/or were referenced by another document. I then went to the California tax office and picked up a similarly tall stack of documents.

Being somewhat adept at reading large volumes of (non-tax) government regulations and extracting pertinent information/requirements, I figured I could understand this stuff. Having read every word several times, I didn't know for sure that I understood it all. I subsequently went to a tax professional, and he needed help from someone else with the dual taxation issue. Bottom line was that I really had understood the requirements, but they were so complicated that I couldn't be sure.
« Last Edit: August 26, 2011, 09:46:05 AM by Tom »
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Tom

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #40 on: August 26, 2011, 09:55:32 AM »
BTW I also caution folks not to run afoul of the IRS, although many "foreign nationals" who come here don't seem concerned.

We paid taxes in two countries for a long time after arriving in the US. I was eventually able to get the UK Inland Revenue folks sorted out, and received a nice check for the taxes they'd wrongly collected. Following IRS rules, and with CPA guidance, I promptly filed this as "income" and sent the IRS a large check for the tax on this "income".

That started a whole chain of events and dialog lasting many months, and the IRS threatened to seize assets and property from us. I tried in vain to resolve it, and eventually had my CPA visit the IRS. They fixed their error on the spot, and the IRS agent told my CPA "if your client hadn't been so honest, we would not have known he received that money from the UK, he would not have had to send us that large check, and he would not have endured this ordeal".

Hopefully, this (abbreviated version of the) story helps explain the first line of this message.
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Alfa38User

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #41 on: August 26, 2011, 10:25:10 AM »
For you doubters (Canadian or American) as to whether your passport is scanned or not, Watch carefully when you hand it to the border agent. They are VERY skilled at this and although it may appear that he just glances at it, it has been scanned in one fluid motion at the same time the questions are being asked and he/she is looking you in the eye.

Several years ago when entering the USA, I was asked (as is usual) where I would be staying and I flubbed the number portion of the address. The agent said to me, "did you mean 1698 Diamond...? ". He was correct of course.....

Each of us, (wife and I, as times can differ) do keep a log of all our time in USA for all the reasons mentioned by Steve, Ed and others. My USA bank requests a Form W8BEN... at least every three years that is then filed with the bank itself. Each of us file Form 8840 with the US IRS by mail each Spring.
Stu
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Tony_Alberta

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #42 on: August 26, 2011, 10:49:11 AM »
I believe passports with barcodes are being scanned.   Ours have been on recent trips.
Minor quibble.    My current and previous passports have never had a barcode.  However the bottom two lines are in a format which is easily scannable very similar to the bottom line of cheques.

(BTW what really irks me is that the idiots who designed the passports did *NOT* use a four digit year for birthdate.  You laugh but I'm sure there is the occasionally centenarian traveling.)

Some countries are already or will soon be issuing passports with RFID chips built into them.   This is of concern to some because they can be read from a distance with the right gear.  Therefore, if you are a little paranoid, you may wish to purchase a copper or steel "wallet".

Tom

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #43 on: August 26, 2011, 11:01:08 AM »
Stu,

Are you saying that both US and CDN border agents scan passports? It's highly likely I would not have noticed CDN agents do it.

I have no doubt that US border agents scan passports, and I've seen them do it countless times. The only times I recall they didn't were when we docked at the 'customs dock' in San Diego aboard our own boat or a friend's, and had to request agents to come down from the airport to check us out.

One time, after returning from MX, I couldn't find our passports because I'd put them in a 'safe' place when we left home 3 months earlier. All our passengers were OK, but the agent insisted on seeing either a US birth certificate or a passport from me. After I sweated for a while, he asked for my drivers license, called his office on the phone, and said "you're good; you're in our computer and have been in and out of the US so many times over the years, we know who you are. Have a nice day". WHEW!

Meanwhile, I explained that Chris wasn't feeling well and was laying on the bed in the forward berth. They didn't ask for her passport, preferring not to disturb her.
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Foxysdad

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #44 on: August 26, 2011, 11:33:43 AM »
I believe your vechile licence plate is scaned before you get to the border agent, that's going both ways ( Cdn and USA )We have no problem keeping track of our time in the US, credit card data does the trick for us .
Howard Kelly, Sherry Bryon, and our furry creature Foxy
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Steve, CDN

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #45 on: August 26, 2011, 01:45:28 PM »
Quote from: Hfx_CDN
Canadians are allowed entry to the US as a visitor for up to 6 months without paperwork.

In fact, Canadians or other "aliens" who remain in the U.S. for six months or less (according to the calculation of the 8840 exemption) are expected to file paperwork in the form of the 8840 Closer Connection Exemption.

Excerpts from Closer Connection Exception Statement for Aliens Form 8840 (excluding my commentary)
 
Quote

Purpose of Form
 Use Form 8840 to claim the closer connection to a foreign country(ies) exception to the substantial presence test. The exception is described later and in Regulations section 301.7701(b)-2.
 
Note: You are not eligible for the closer connection exception if any of the following apply.
• You were present in the United States 183 days or more in calendar year 2010.
• You are a lawful permanent resident of the United States (that is, you are a green card holder).
• You have applied for, or taken other affirmative steps to apply for, a green card; or have an application pending to change your status to that of a lawful permanent resident of the United States.

Quote
Who Must File
If you are an alien individual and you meet the closer connection exception to the substantial presence test, you must file Form 8840 with the IRS to establish your claim that you are a nonresident of the United States by reason of that exception.

Quote
Substantial Presence Test
You are considered a U.S. resident if you meet the substantial presence test for 2010. You meet this test if you were physically present in the United States for at least:
• 31 days during 2010 and
• 183 days during the period 2010, 2009, and 2008 (IOW the last three years)

Please refer to the official forrm for complete details of who qualifies, how to calculate the number of days and filing procedures.
 
Additional resources on the subject of 8840 filing:
 
Canadian Snowbirds Assoc
 
Global Tax Services
 
A pdf copy of forum 8840 (2010 reporting year) is attached.  For up to date version, visit the IRS HERE.
« Last Edit: August 26, 2011, 01:47:37 PM by Steve, CDN »
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Tom

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #46 on: August 26, 2011, 08:55:26 PM »
Thanks for the links Steve, this is certainly a minefield. I sincerely wish that this stuff wasn't imposed on our Northern neighbors.
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Tony_Alberta

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #47 on: August 26, 2011, 09:32:55 PM »
• 183 days during the period 2010, 2009, and 2008 (IOW the last three years)
Hold on a sec.  That's not accurate.  That sentence is actually "183 days during the period 2010, 2009, and 2008, counting all the days of physical presence in 2010 but only 1/3 the number of days of presence in 2009 and only 1/6 the number of days in 2008."

Steve, CDN

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #48 on: August 27, 2011, 10:45:17 AM »
Quote from: Tony
That's not accurate

The quotation was intended as an overview, which is why I added the comment about referring to the form for the specifics of making the calculation.
 
I believe those who would be affected would be using the actual form, thereby following the instructions.
 
Quote from: Tom

 I sincerely wish that this stuff wasn't imposed on our Northern neighbors.

It's not that hard, Tom.  It's simply a matter of maintaining a simple log, which, for anyone who spends longer periods of time in your Country can do using an ordinary calendar.  We keep track of other things for income tax, medical expenses, balancing check books...so why should this be any more difficult?
 
I see it as being part of life's responsibilities and complying with the laws of the Country hosting us.
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Tony_Alberta

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #49 on: September 03, 2011, 05:14:53 PM »
On the topic of sharing information between US and Canadian govt depts here's a story where idiots rented expensive vehicles in Detroit, drove them to Canada and then reported them stolen in the USA.   The point being that it was Canadian Customs who would have recorded the license plate info and driver info and not American Customs.   Then the American police somehow had access to that information.

http://news.nationalpost.com/2011/09/01/u-s-police-foil-canada-to-iraq-luxury-car-scheme/
« Last Edit: September 04, 2011, 11:49:59 AM by Steve, CDN »

Steve, CDN

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #50 on: September 04, 2011, 11:51:54 AM »
Discussion on snowbirds bringing medications to the U.S. split and moved HERE
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Hfx_Cdn

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #51 on: September 20, 2011, 07:27:02 AM »
    On a similar but not identical line of thought, I haven't seen this on any US press coverage.  It is concerning to many of the approximate 1 million US born Canadians, many of whom used to visit US family, but no longer can cross the border.
    It does speak volumes to how the IRS thinks, and why we need to be so careful in our dealings with the US government.

Ed

http://www.theglobeandmail.com/news/opinions/opinion/help-im-on-the-irs-hit-list/article2171697/comments/
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macmac

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #52 on: October 11, 2011, 03:34:49 AM »
Wow!  I hadn't visited this topic for some time and was surprised to find it still active.  There have been some really informative and interesting comments. 

As a regular foreigner RVing visitor  (a Brit though)  I guess I might also get trawled by the IRS one day.  Unlike the Canadians, however, I'm not allowed to earn income in the USA (naturally) so perhaps the 8840 requirements wouldn't apply? 

I had always assumed that Canadians weren't allowed to work either so this IRS situation is a surprise for me......

Hfx_Cdn

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #53 on: October 11, 2011, 06:31:18 AM »
    Macmac, that the crux of the problem, it has nothing to do with money earned in the US, US laws require taxes on money earned world wide if it is deemed that you fit IRS tax requirements, and that is judged on the formula that goes back 3 years to establish how much time was spent in the US, and that disregards the fact that taxes are paid in your home country, or that you can legally be a tourist for up to 6 months each year.

Ed
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macmac

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #54 on: October 11, 2011, 06:39:26 AM »
    Macmac, that the crux of the problem, it has nothing to do with money earned in the US, US laws require taxes on money earned world wide if it is deemed that you fit IRS tax requirements, and that is judged on the formula that goes back 3 years to establish how much time was spent in the US, and that disregards the fact that taxes are paid in your home country, or that you can legally be a tourist for up to 6 months each year.

Ed

Yes I understand now - it's if one is deemed to fit the IRS tax requirements......  thanks

leapfrog

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #55 on: July 06, 2014, 07:08:49 PM »
Do both myself and my husband each have to fill an individual   Closer connection form. We have been filling one out for years, but thought it applied to both of us.

macmac

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #56 on: July 07, 2014, 12:30:50 AM »
Do both myself and my husband each have to fill an individual   Closer connection form.

yes

buchanan

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #57 on: July 07, 2014, 12:15:29 PM »
I'm confused now...what is it about the last 3 yrs?  I'm obviously missing something, sorry.

D.
did you read the form?? it clearly explains it on the form.Read the form as its pretty straight forward

buchanan

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #58 on: July 07, 2014, 12:17:15 PM »
Do both myself and my husband each have to fill an individual   Closer connection form. We have been filling one out for years, but thought it applied to both of us.

read the form it very very clearly says ONE for EVERY person must file individualy. 

Elly Dalmaijer

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Re: Foreign Snowbirds in U.S., IRS wants You!
« Reply #59 on: July 07, 2014, 09:30:46 PM »
I am (or at least was) a Tax Specialist working at a CA (=(CPA) office. I am also a Canadian snowbird.

To make everything just a bit more complicated, there are THREE separate calculations for Canadians:

1. For US Government: We can stay a block of 6 months in the US.
2. For US IRS : we have to calculate the number of days in the last three years per a formula to see if we have to file the Closer Connection Form.
3. For our Provincial Health Care plan rules: most provinces allow 3 months and up to 6 months absence from a province in order to remain covered under a provincial plan (nothing to do with travel medical.... they assume that we are covered by Provincial Health Care). Many provinces have recently raised this to 7 months. Any longer than that and we have to prove that we really are a bona fide resident of our province.

These three are three seperate calculation, each with different criteria.
And yes, every day, including shopping days, count.Only exception is when in transit at a US airport on the way somewhere else. 

Eventually, whether your passport was scanned at the border or not, it will be up to us to prove our number of days. And yes, I keep a spreadsheet to keep track of all this.

Note that Canada and the USA now exchange border crossing info in real time especially of "third party nationals" (i.e. non Canadians or Americans). Phase I was started last September, Phase II in January 2014 and the final phase to come.

Elly
Either at home in St Albert AB or working in Africa or in our 1993 Itasca Sunrise.

 

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