Discussion:2004/05 Form 2555
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Discussion Forum Index --> Tax Questions --> 2004/05 Form 2555
| 8 January 2006 | |
| I have a client that during the 2004 tax season didn't notified me about some foreign income while working on Quatar. He worked from 06/05/04 to 06/01/05. I am in the impression after reading the instructions that he doesn't qualified since he does not pass the the Bona Fide resident becouse he is not a resident of Quatar and the Physical Precense test since he did not spend 12 months during the 2004 tax calendar year. He insisted that he called the IRS and they told him that he cualified but I have my concern to ammend his 1040 for 2004.
Can anyone pin point me in the right direction? Thanks Jose Tampa, FL | |
| 8 January 2006 | |
| Ask who he spoke to and the person's ID #. Call the IRS tax professionals number if you are in doubt...trust yourself...you know better than he whether he qualifies. Anuenue | |
| 9 January 2006 | |
| Any individual who claims the Internal Revenue Code § 911 exclusion must satisfy two time tests.
The first test is that his tax home, as defined in Internal Revenue Code § 162(a)(2), must be in a foreign country. See Internal Revenue Code § 911(d)(3). The courts have interpreted this to mean that any individual who satisfies the away from home tests for travel deductions will not satisfy the foreign tax home requirement. In other words, if the taxpayer is in a single foreign location for a period of more than one-year, his tax home has definitely shifted to a foreign country, and he would not be eligible to deduct his travel expenses, but he may eligible for the Sec. 911 exclusion. The second test is the 330-day physical presence test. This test must be satisfied during any 12-consecutive-month period – not just calendar years. Thus, it would be possible to satisfy the 330-day foreign physical presence test while failing the “tax home” test (especially if multiple foreign locations are involved). Your client appears to satisfy the 330-day test. In addition, his tax home appears to have shifted to a foreign location (although it would have been better to have a 366 day contract). | |
| 9 January 2006 | |
| Ok thank you for the information, but he wants to ammend his 2004 return. Does he quilified for the Physical Prescence for 2004 even the tax year end on 12/31/04? In all my years this is my first one and after some reading I have a few question. Appreciate all your cooperation. | |
| 10 January 2006 | |
| The statute says "any 12 consecutive month period". See Sec. 911(d)(1)(B). Thus, the 12-month period could end on any day of the year or as late as December 30 of the following year. Thus, your understanding is correct. Your client satisfies the physical presence test if he was present in Qatar for the period 6/5/04 through 6/1/05.
Yes, he should go back and amend as soon as possible (preferably before April 15, 2006). | |
