Hello Robin, thank you very much for your answer.
I see what you're saying. But Under section 7701(b)(5)(B)(i), of the Internal Revenue Code
(5) Exempt individual defined
For purposes of this subsection—
(B) Foreign government-related individual
The term “foreign government-related individual” means any individual temporarily present in the United States by reason of—
(i) diplomatic status, or a visa which the Secretary (after consultation with the Secretary of State) determines represents full-time diplomatic or consular status for purposes of this subsection.
Now, I understand that we are residents for Taxing purposes because we gave greencards. So these two seem to contradict. On the one hand clearly consulate employees do not pay taxes. On the other Greencard holders do. Is there a law
that I can look at that says that if you fall under the law above mentioned, BUT you are a Greencard holder, you then pay taxes as a resident and are not exempt?
Also, what form to we need to fill to claim treaty benefits under the U.S. tax treaty with Mexico? Are those the 1040 forms you mentioned? Since we pay about 30% of taxes in Mexico we obviously don't want to pay twice.