Discussion:Canadian's working in the US with no visa
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Discussion Forum Index --> Tax Questions --> Canadian's working in the US with no visa
| 26 August 2006 | |
| Hi all;
Missed you guys while I was away and now just completely bogged down with extended returns, etc but now a new issue with my lovely Canadian client has come about. The Canadian corporation is now ONLY manufacturing and design; a new corporation in the US has been set up to take care of installation, sales, sales tax, etc. Now, my Canadian client wants things both ways...he wants to allow his Canadian employees to install in the US and claim the installation income to offset their salaries in the plant. BUT according to the voluntary disclosures in place, he has agreed not to perform nexus creating activities in the US any longer...installation being one of those activities. What am I to do? I am the registered agent for the US corporation and I am fighting with him over this item. His Canadian employees refuse to get a 1099 from the US, but he wants to write off their hourly rate, meals, travel, etc. Is there some way other than what I have done to help him see that I can't cook the books to satisfy him in this? Or....slap me if I am wrong and there is some loophole where he can still install and the US corp can pay him to without issuing any 1099's or violate any laws on illegal aliens. Thanks so much!! | |
| 27 August 2006 | |
| If I understand what you are saying (and I am not sure that I do), you are saying that the client is asking you to be a party to a violation of U.S. immigration and income tax laws. Sounds like trouble to me. | |
| 27 August 2006 | |
| Your question isn't very clear. I'm not sure what you mean by ....... he has agreed not to perform nexus creating activities in the US any longer...installation being one of those activities. You either have nexus or you don't - certainly if he has Canadian employees performing services in the US (presumably installation), the nexus standard has been met. The Canadian employees working (and most likely living) in the US should have proper visa/work permits and they would be considered resident aliens for federal income tax purposes. Sounds like you need to sit down with the owner and have a heart-to-heart discussion, if he doesn't comply......walk away. | |
| 27 August 2006 | |
| Sorry it wasn't too clear Scot and Riley. Prior to his incorporation as a US entity, his Canadian corporation DID have nexus, and this he agreed to stop and use only the US corporation to perform the activities which made his Canadian corporation a foreign entity doing business in the US. Yes, the US corporation has nexus and that is why it was formed. But now the client wants to continue the installation with the foreign corporation and not report this to the US government...just having the US corporation pay the Canadian corporation for the installation.
Thank you for the response Riley. This is what I thought but wanted to make sure before hitting him with this info that I was being diligent enough to help him. OK....so onto round two with my client...thanks guys! | |
| 27 August 2006 | |
| The problem seems to be overstaffing at the Canadian end. If your client wants to keep all of his Canadian employees he needs to find a way for them to be legimate employees of the US Corp. | |
| 27 August 2006 | |
| I wrote in my email to him that he had the option to use these employees to install in the US, but that they needed visas, TIN's and his Canadian corporation would still be required to file tax returns for the income it earned in the US, paid to Canadian employees, or he needed to cease these activities from Canada and let the US corporation "hire" the Canadian employees and pay them, or cease everything and just let the US corporation do ALL the installations with US citizens. He is going to FLIP...but guess our job is not to make them happy all the time, no? | |
