8840 Form

Summer 2000 CSANews Issue 35  |   Posted date : Mar 05, 2007.Back to list

Bird talk - Le Jaseur
Dear Birdtalk,

In our Park in Mesa, Arizona, there are several Canadians who do not complete form 8840, the "Closer Connection Exception Statement for Aliens" form. Please have someone research as to whether this form is mandatory. Please reply in the CSA news.

D. Laidlaw
Saskatoon, Sk.


Response:
My first thought was, "I wonder if they file Canadian taxes?" The purpose of filing a Form 8840 is to establish your status as non-taxable in the United States. The IRS rules state that you are taxable in the United States if you are considered a resident according to the rules. For their purposes, you are a resident if you meet the Substantial Presence Test. That test goes as follows for 1999:

(a) you were in the U.S. for at least 31 days in 1999, and (b) you get a total of 183 or greater when you add i) the number of days you were in the U.S. in 1999 (ii) one-third of the number of days you were in the U.S. in 1998, and iii) one-sixth of the number of days you were in the U.S. in 1997.

If you meet the Substantial Presence Test, you are taxable in the U.S. as a resident, unless you establish, in a manner set out in the rules, that you have a closer connection to a foreign country, in your case, Canada. The manner set out in the rules is to file a Form 8840 by the 15th of June in the year following the tax year. If you do not meet the Substantial Presence Test, you do not need to file anything.

If you do not file the 8840, and you do meet the Substantial Presence Test, you are considered taxable in the U.S. by the U.S. government. We highly recommend that you file the Form 8840 to avoid possible tax repercussions.

Suppose you do not file when you should? There are at least two ramifications. First, you could get mixed up in a taxation claim by the U.S. government for owed taxes for the years in which you met the Substantial Presence Test, but did not file Form 8840. Second, you could get questioned at the border by a knowledgeable inspector (please see page 28 for more information on border crossing), who could ask you, having ascertained that you met the Substantial

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