Mar 13, 2023

Tax Notes International Publishes Michael Karlin’s Letter to the Editor Regarding Reporting Requirements for Tax Treaty Nonresidents

In a recent letter to the editor published by Tax Notes International, Michael Karlin directs readers to his 2012 and 2015 articles, “Now You See Them: U.S. Reporting Requirements for Tax Treaty Nonresidents” and “Requesting Guidance For Treaty Nonresidents,” which criticize the IRS’s “apparent belief that an individual treated as a nonresident under the provisions of a tax treaty is nevertheless required to file various information reports relating to international assets” and note that “the treatment of treaty nonresidents as U.S. residents may turn unsuspecting NRAs into unintentional lawbreakers.” Karlin’s letter maintains this criticism for the government’s stance and emphasizes the lack of an adequate response from the IRS in the time that has followed.

Citing Aroeste v. United States case as an example and partial answer to the U.S. government’s position, Karlin shares “as a policy matter, I believe that the government should abandon its position in the Aroeste case. More broadly, it should not require tax reporting by treaty nonresidents as if they were residents. ”

Read the letter below.

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