Using 1040-NR and MFJ?

[xyz_123 6]

Hi all,

 

I am working with a CAA at H&R Block to prepare a joint return with my nonresident alien wife, who we wish to have treated as a US citizen for tax purposes. I have had a difficult time finding any CAAs in my area with knowledge of the process when the spouse is outside of the US. The independent firms I contacted gave me bad information, so I decided to use H&R. I have a good idea of how the process should be but I wanted to clarify a couple of things that didn't sound right. 

 

1. The tax preparer is telling me that my wife can submit a 1040-NR as MFJ, I think I would be submitting a separate form for myself along with that (I assume a 1040 but I missed what she told me). That didn't sound right to me and the 1040-NR instructions say "A nonresident alien filing Form 1040-NR cannot have a Married filing jointly or a Head of household filing status." I asked the preparer about this but she insisted it was possible to file this way because we were also sending a statement electing her to be treated as a US citizen for tax purposes. My wife is unemployed and has no US income, so I did not think the 1040-NR would otherwise be applicable.
2. The preparer kept insisting that my wife didn't need to file for the ITIN right away, and that she could potentially do so later on, even next year. I basically insisted on doing it along with my return, and insisted on an extension in the mean time so that I could gather the necessary documents (the statement, W-7, etc.) to have my wife sign in May. Are there any scenarios where a nonresident alien spouse can file a MFJ return without an ITIN or SSN? I did find this statement on the IRS page about nonresident spouses: "If your spouse is neither a U.S. citizen nor a U.S. resident within the meaning of IRC section 7701(b)(1)(A) and you file a joint or separate return, your spouse must have either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN)."
3. Regarding the W-7, I explained to her that we would be getting a certified copy of my wife's passport from the embassy in her country. The tax preparer seemed to understand this but she kept saying she would need to sign off on the box at the bottom of the W-7 for certifying acceptance agents. She told me that if she didn't do it, then I would have to take the W-7 and the certified copy of my wife's passport to an IRS office to have them sign it. That was not the impression I got from reading things here, where people submitted the forms themselves. Regardless, she seems willing to sign that box if I bring the certified passport copy back to her before filing by paper.
4. If H&R Block does screw up the return I submit, what are the consequences? Is there any recourse--I realize a return could be amended but will they fix their mistake / give me the money back?

 

Any advice in this situation would be appreciated. I hate to be "that guy" challenging the expert he hired but I want to advocate for myself as well. I'm thinking about calling the IRS this week to ask about the 1040-NR but I'm not sure if my tax preparer would listen. Am I thinking about this situation correctly?

 

 

 

Edited March 18, 2022 by xyz_123

[Wuozopo 4,285]

@xyz_123
 

A  CAA (Certifying Acceptance Agent) is needed to certify a passport and the passport holder must be present in person.  Your plans are to get that done abroad at an embassy, so why have you searched for a CAA local to you in the US?  

[xyz_123 6]

11 minutes ago, Wuozopo said:

@xyz_123
 

A  CAA (Certifying Acceptance Agent) is needed to certify a passport and the passport holder must be present in person.  Your plans are to get that done abroad at an embassy, so why have you searched for a CAA local to you in the US?  

Yes, I realize this. I did so because I was having trouble finding any sort of CPA, EA or any tax preparer to understand my filing citation. I assumed a CAA would understand better, although the ones I have encountered do not seem to fully understand what I am trying to do (file MFJ while my nonresident spouse is abroad). I did not want to prepare the entire return myself, and I preferred to have an "expert" to look everything over (including the W-7 and other forms) to make sure everything was completed correctly. 

 

Do you have any idea about the 1040-NR?

 

Thanks

[Chancy 6,233]

2 hours ago, xyz_123 said:

Do you have any idea about the 1040-NR?

 

1040-NR is not required from your spouse living abroad.  You and your foreign spouse must both sign the 1040 form, and the election statement to treat your spouse as US resident (not US citizen).  All that's needed from your spouse is the W7 plus the required supporting documents.  If you want to use a CAA to sign the W7, it must be a CAA at your spouse's location.

 

The thread below has more info based on the experiences of other VJ members who have successfully completed what you are trying to achieve --

 

 

[xyz_123 6]

8 minutes ago, Chancy said:

 

1040-NR is not required from your spouse living abroad.  You and your foreign spouse must both sign the 1040 form, and the election statement to treat your spouse as US resident (not US citizen).  All that's needed from your spouse is the W7 plus the required supporting documents.  If you want to use a CAA to sign the W7, it must be a CAA at your spouse's location.

 

The thread below has more info based on the experiences of other VJ members who have successfully completed what you are trying to achieve --

 

 

Thank you for that, that is what I figured based on everything I've read here. Unfortunately there aren't any CAAs in my wife's country, which is why we are going the embassy route to get a certified copy of her passport. Do you know if the embassy would need to sign the bottom of Form W-7, where the CAA would normally sign? If not, would I just otherwise send the W-7 in (with supporting evidence) without having that box signed? 

 

I really only wanted to work with a CAA in the US as I thought they would be able to understand what I'm doing. But that doesn't seem to be the case. I know they are unable to certify my wife's documents. 

 

Thanks for your input

[Chancy 6,233]

15 minutes ago, xyz_123 said:

Do you know if the embassy would need to sign the bottom of Form W-7, where the CAA would normally sign? If not, would I just otherwise send the W-7 in (with supporting evidence) without having that box signed?

 

No, the embassy would not sign the W7.  Only a CAA may do that.  Just submit the W7 without CAA certification.

 

[xyz_123 6]

3 minutes ago, Chancy said:

 

No, the embassy would not sign the W7.  Only a CAA may do that.  Just submit the W7 without CAA certification.

 

Thank you. I said this to the CAA I'm working with but she basically dismissed what I was saying. I don't think she understands how it works without a CAA being involved. 

 

I think my focus now will just to be sure my return is completed the way I like, regardless of what the CAA tax preparer says. It sounds like I will have to do the ITIN stuff myself, which is fine. I was just hoping I could have someone look everything over to make sure I didn't make mistakes. But this clearly isn't the right person for that. 

 

I appreciate your time, thanks

[Wuozopo 4,285]

20 hours ago, xyz_123 said:

The tax preparer is telling me that my wife can submit a 1040-NR as MFJ,

1040-NR is a one person document. Even two NRs can’t do a joint 1040-NR.  Your wife submitting one is pointless really. She has no income to tax. She wouldn’t get some kind of refund from doing so. It wouldn’t benefit you or lower your taxes. A joint 1040 return with a statement electing for her to be treated as a resident alien for tax purposes is what you want.
 

20 hours ago, xyz_123 said:

The preparer kept insisting that my wife didn't need to file for the ITIN right away, and that she could potentially do so later on, even next year

If you want to file a joint return, your wife must have a SSN or ITIN. Applying with the submission of the return, they issue an ITIN,  then process the return with the new ITIN they have added to it.

 

20 hours ago, xyz_123 said:

Regarding the W-7, I explained to her that we would be getting a certified copy of my wife's passport from the embassy in her country. The tax preparer seemed to understand this but she kept saying she would need to sign off on the box at the bottom of the W-7 for certifying acceptance agents. She told me that if she didn't do it, then I would have to take the W-7 and the certified copy of my wife's passport to an IRS office to have them sign it.

You do not need a CAA. You may need a tax prep person if you can’t figure it out on software, but nobody has to certify anything. You can put your tax return (with the statement electing for her to be treated as a nonresident alien),  wife’s W-7, and the certified copy of the passport in an envelope of your choosing and mail it yourself to 

Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342

The only required signatures are yours and your wife’s.  The person at the embassy will sign or stamp that it is a true copy of her passport, but they don’t deal with/look at/ sign the rest of the forms. If you pay somebody to fill out your tax return, then they have to sign the tax return as the paid preparer. If you do your own tax return, then there is no paid preparer signature. 
 

20 hours ago, xyz_123 said:

If H&R Block does screw up the return I submit, what are the consequences? Is there any recourse--I realize a return could be amended but will they fix their mistake / give me the money back?

That is a question to ask them. Haven’t ever used a paid service or read their fine print as far as their liability or refunding of your fee. As far as the IRS, if they find something wrong they might reject the return if it’s way off like a joint 1040-NR. Or contact you in about a year saying you owe them something (only if your calculations were wrong or you failed to report some income and do actually owe.) so you straighten it out with them. Nothing bad happens like charging you with a crime or going to jail.

 

20 hours ago, xyz_123 said:

Any advice in this situation would be appreciated. I hate to be "that guy" challenging the expert he hired but I want to advocate for myself as well.

Your instincts and knowledge are very good. I would drop that specific preparer quickly.  If you want to file for an extension, you can do it yourself but you need some rough numbers like an estimate of your total tax and how much you’ve already paid in by employee withholding from your paychecks. The form  https://www.irs.gov/pub/irs-pdf/f4868.pdf

 

 

Edited March 19, 2022 by Wuozopo

[carmel34 3,529]

20 hours ago, xyz_123 said:

I am working with a CAA at H&R Block to prepare a joint return with my nonresident alien wife

I would never recommend H&R Block or any of the national chain tax services in a situation like yours.  We did it ourselves by reading all the info on the IRS website.  Pay particular attention to the W-7 instructions and publications on non-resident aliens filing as a resident for tax purposes.  Good luck!

[xyz_123 6]

On 3/19/2022 at 3:06 PM, Wuozopo said:

1040-NR is a one person document. Even two NRs can’t do a joint 1040-NR.  Your wife submitting one is pointless really. She has no income to tax. She wouldn’t get some kind of refund from doing so. It wouldn’t benefit you or lower your taxes. A joint 1040 return with a statement electing for her to be treated as a resident alien for tax purposes is what you want.
 

If you want to file a joint return, your wife must have a SSN or ITIN. Applying with the submission of the return, they issue an ITIN,  then process the return with the new ITIN they have added to it.

 

You do not need a CAA. You may need a tax prep person if you can’t figure it out on software, but nobody has to certify anything. You can put your tax return (with the statement electing for her to be treated as a nonresident alien),  wife’s W-7, and the certified copy of the passport in an envelope of your choosing and mail it yourself to 

Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342

The only required signatures are yours and your wife’s.  The person at the embassy will sign or stamp that it is a true copy of her passport, but they don’t deal with/look at/ sign the rest of the forms. If you pay somebody to fill out your tax return, then they have to sign the tax return as the paid preparer. If you do your own tax return, then there is no paid preparer signature. 
 

That is a question to ask them. Haven’t ever used a paid service or read their fine print as far as their liability or refunding of your fee. As far as the IRS, if they find something wrong they might reject the return if it’s way off like a joint 1040-NR. Or contact you in about a year saying you owe them something (only if your calculations were wrong or you failed to report some income and do actually owe.) so you straighten it out with them. Nothing bad happens like charging you with a crime or going to jail.

 

Your instincts and knowledge are very good. I would drop that specific preparer quickly.  If you want to file for an extension, you can do it yourself but you need some rough numbers like an estimate of your total tax and how much you’ve already paid in by employee withholding from your paychecks. The form  https://www.irs.gov/pub/irs-pdf/f4868.pdf

 

 

Thank you for taking the time to write out such a detailed response. This morning I dropped H&R Block and I will prepare the return myself. 

 

One last question if you happen to know: can I e-file the extension(s) and then submit the return by paper later, or will those need to be by paper as well? 

[Wuozopo 4,285]

4 hours ago, xyz_123 said:

Thank you for taking the time to write out such a detailed response. This morning I dropped H&R Block and I will prepare the return myself. 

 

One last question if you happen to know: can I e-file the extension(s) and then submit the return by paper later, or will those need to be by paper as well? 

There should only be one extension. 
 

I don’t know why you would have to file an extension and a return by the same method as long as you file. E-file if if it lets you, i.e.,no problem with lack of SSN.

[xyz_123 6]

On 3/19/2022 at 3:07 PM, carmel34 said:

I would never recommend H&R Block or any of the national chain tax services in a situation like yours.  We did it ourselves by reading all the info on the IRS website.  Pay particular attention to the W-7 instructions and publications on non-resident aliens filing as a resident for tax purposes.  Good luck!

Thanks for your input! I only went to H&R as a last resort, after trying several other tax preparers. But lesson learned: I'm better off doing it myself anyway. 

[xyz_123 6]

On 3/22/2022 at 1:45 PM, Wuozopo said:

There should only be one extension. 
 

I don’t know why you would have to file an extension and a return by the same method as long as you file. E-file if if it lets you, i.e.,no problem with lack of SSN.

Thanks, I was referring to my state extensions too. I went ahead and filed them all by paper since it was easier.