Now You See Them: U.S. Reporting Requirements for Tax Treaty Nonresidents

Michael Karlin’s article, “Now You See Them: U.S. Reporting Requirements for Tax Treaty Nonresidents” was published in Tax Notes International’s Volume 67. The piece explores concerns surrounding the IRS’ recent decision to require resident aliens to file an international activity reporting form, Form 8938, even if they elect to be taxed as a treaty nonresident, a position that is inconsistent with preexisting tax treaties and IRC regulations, and further unjustified under reg. Section 301.7701(b)-7(a)(3). Michael stresses concerns that this move may face poorly advised taxpayers with unnecessary and unexpected burdens and lead to unintended consequences detrimental to the interests of the government, by the collection of data from treaty nonresidents that it does not need while failing to require useful data for transactions between treaty nonresidents and U.S. persons.