procrastinator124

Can someone who got their EAD confirm if the envelope really came from Lees Summit? My approval notices have that as the return address but the postage stamp originates from Williston, VT 05495. Production/receipt might be slowed by the storms.

Hope everyone affected by the storms stays safe.

I have been a silent observer on VJ so far but felt that I should share my research in FBAR filing requirements.

What is FBAR: A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year.

Background: I was debating whether my wife, a K-1 entrant, is required to file FBAR for 2016. In researching the issue, the requirement to file boils down to whether she is considered a United States person for 2016. This analysis is only applicable if you are a K-1 entrant who has not yet converted to a green card. If you are a green card holder, you are required to file FBAR.

Applicable Regulations: Because I know we all love form filling/instruction cross-checking with the K-1 and AOS process, lets get into the nitty-gritty.

Disclaimer: I only included snippets I believe are relevant. I am neither a tax or legal professional.

FBAR filing instructions for FinCEN Form 114

United States person means United States citizens (including minor children); United States residents; entities, including but not limited to, corporations, partnerships, or limited liability. A United States resident is an alien residing in the United States. To determine if the filer is a resident of the United States apply the residency tests in 26 U.S.C. section 7701(b).

26 U.S.C. section 7701(b)

An alien individual shall be treated as a resident of the United States with respect to any calendar year if (and only if) such individual meets the requirements of clause (i), (ii), or (iii):

(i) Lawfully admitted for permanent residence

Such individual is a lawful permanent resident of the United States at any time during such calendar year.

(ii) Substantial presence test

Such individual meets the substantial presence test of paragraph (3).

(iii) First year election

Such individual makes the election provided in paragraph (4).

26 U.S.C. section 7701(b) Substantial Presence Test

Such individual was present in the United States on at least 31 days during the calendar year, and

the sum of the number of days on which such individual was present in the United States during the current year and the 2 preceding calendar years (when multiplied by the applicable multiplier determined under the following table) equals or exceeds 183 days

Current Year………..….1

1^st Preceding Year….…1/3

2^nd Preceding Year…….1/6

26 U.S.C. section 7701(b) First Year Election

was not a resident of the United States under paragraph with respect to the calendar year immediately preceding the election year

is a resident of the United States under clause (ii) of paragraph (1)(A) with respect to the calendar year immediately following the election year, and

is both (I) present in the United States for a period of at least 31 consecutive days in the election year, and (II) present in the United States during the period beginning with the first day of such 31-day period and ending with the last day of the election year (hereinafter referred to as the “testing period”) for a number of days equal to or exceeding 75 percent of the number of days in the testing period (provided that an individual shall be treated for purposes of this subclause as present in the United States for a number of days during the testing period not exceeding 5 days in the aggregate, notwithstanding his absence from the United States on such days). An alien individual who meets the requirements of subparagraph shall, if he so elects, be treated as a resident of the United States with respect to the election year.

Analysis:

My K-1 spouse is not considered a United States person for the purposes of filing FBAR because she does not meet any of the requirements.

Lawfully admitted for permanent residence

She is currently in the AOS process and has not been admitted yet for permanent residence.

Substantial presence test

2016- 60 Days x 1 = 60 Days

2015- 9 Days x 1/3 = 3 Days

2014- 135 Days x 1/6 = 22.5 Days

Total Days = 85.5 Days (failed test)

First Year Election

She will qualify, however, she will not be electing to be treated as a resident under this section.

Conclusion:

Having failed the 3 tests, I believe she not considered a United States person for the purposes of filing FBAR.

I will still be filing a joint tax return to take advantage of lower taxes. The IRS allows for this “If, at the end of your tax year, you are married and one spouse is a U.S. citizen or a resident alien and the other spouse is a nonresident alien, you can choose to treat the nonresident spouse as a U.S. resident.” This election is not to be confused with the First Year Election from above. Since this election is not referenced as part of the FBAR definition of resident, I believe there is a loophole here to not file FBAR but still file a joint tax return.

If anyone has opposing arguments, please bring them up!

I sent a combination or stubs and pictures or passport stamps and pictures.