Closer Connection Exception Form

Spring 2002 CSANews Issue 42  |  Posted date : Apr 05, 2007.Back to list

The I.R.S. Form 8840 is required, on an annual basis, by persons who claim that, in spite of meeting the "Substantial Presence Test" regarding time spent in the United States, they are exempt from tax because their tax home is a foreign country, i.e. Canada. A visitor to the United States will have fulfilled the requirements of the substantial presence test if their stay in the United States exceeds 31 days in the year 2001, and 183 days for the year 2001, 2000 and 1999 combined. In order to determine if you have fulfilled the substantial presence test, follow these steps.

Count all of the days you were in the United States for the year 2001, and 1/3 of the days you were in the U.S. for the 2000, and add 1/6 of the days you were in the U.S. for the year 1999. If the sum is less than 183 days, then you do not have to file Form 8840. If your sum exceeds 183 days, then you should file Form 8840. Otherwise, you may be considered taxable in the U.S. on your world income, and may not be able to claim that your tax "home" is Canada. Filing a Form 8840 should cause you to be exempt from income tax in the United States.

Mail your completed Form 8840 to: Internal Revenue Service Center, Philadelphia, PA, 19255 no later than June 15, 2002, or include it in your U.S. income tax filing, if you are submitting one to the I.R.S..

You or your friends can download the I.R.S. Form 8840 by going to http://www.intltaxlaw.com/FORMS/2002/f8840.pdf