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Anne
Anne, Master Tax Preparer
Category: Tax
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Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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I am a short term consultant for the World Bank. I am an Ethiopian

Resolved Question:

I am a short term consultant for the World Bank. I am an Ethiopian Citizen but holding American green card. I lived in the US for most of the time while I worked. My tax advisor told me that I might need to pay taxes as the lows have changed.

I asked this question before but I recieved pages of materials to read, not just the answer. I read most of the materials while I was trying to search. What I wanted was somebody who will look at case and tell me "yes" or "no"
Submitted: 3 years ago.
Category: Tax
Expert:  Anne replied 3 years ago.
Hi

Thank you for using justanswer. Here is your yes/no answer:

If you are a green card holder, you are automatically classified as a United States tax resident and must report all of your income, whether earned abroad or domestically.Please see below:

 

Publication 4588 (02-2007)Basic Tax Guide for Green Card Holders: Understanding Your U.S. Tax Obligations

 

 

There is a common rumor circulating that the number of days you spend within the United States decides whether or not you are considered to be a tax resident, but this is only true for people who are in the country under nonimmigrant visas, not green cards. If you have a green card and you do not step foot in the United States all year, you still must report all of your income to the IRS.

 

Like almost every other taxpayer in the United States, green card holders must file an IRS Form 1040 each year by April 15th. If you fail to file your United States taxes as a green card holder, you may hurt your chances of becoming a U.S. citizen. Additionally, if you intentionally do not file your taxes, you may also be guilty of a crime which could result in the loss of your green and your deportation. You should be able to find out more about your situation by visiting the IRS website at www.irs.gov.

 

If you pay tax to the Ethiopian Government on the same money that you pay tax to the IRS on, you may claim a credit for the foreign tax paid by filing Form 1116Foreign Tax Credit

 

 

I hope this helps


Customer: replied 3 years ago.

I did not accept your answer because you did not consider important parameters I gave you inmy question. You only saw the fact that I am a none US citizen and a green card holder. The other important parameter that you seem to forget in your analysis is that I am an employee of the World Bank. Just like UN staff, World Bank employees are exempted from taxes.

 

Please see what the tax desk in the World Bank wrote me below.

 

"Consultant income earned by non-US citizen (green card holders included) staff is not subject to US income tax and social security tax. As long as you are not US citizen, the consultant you earn from the World Bank will not be subject to US income taxes. Therefore, we will NOT be reporting your Bank's income to the IRS nor will you be required to report/pay on this income to the IRS (via 1040 filing). Any other income you earned (interest, wages) you received OUTSIDE your STC appointment with the Bank may be subject to tax. Below is the non-US Memorandum including the IRS Publication 519 referencing Employees of Foreign Governments and International Organizations. I hope this helps.

 

 

Expert:  Anne replied 3 years ago.
Hi again

I'm afraid that the information your employer provided re: filing of tax returns for employees working for international organizations did not go quite far enough.

The following quote is from

How to Report Wage Income Paid by Foreign Governments or ...


"U.S. citizens and green card holders pay U.S. taxes on their compensation while working in the U.S. They report their compensation as income from wages on line 7 of their Form 1040, U.S. Individual Income Tax Return."

You may claim an exemption for those wages based on your employer being an international organizations, but you would still have to file the tax return, show the wages on line 7, and then you may claim the exemption on line 23, but you must know the number of the Executive Order covering the international organization and should have some written evidence of your acceptance or designation by the Secretary of State.

Please see below, which is fromEmployees of Foreign Governments or International Organizations

  • An international organization is an organization designated by the President of the United States through Executive Order to qualify for the privileges, exemptions, and immunities provided in the International Organizations Immunities Act.

  • You should find out if you have been made known to, and have been accepted by, the Secretary of State as an officer or an employee of that organization, or if you have been designated by the Secretary of State, before formal notification and acceptance, as a prospective officer or employee.

  • If you are claiming exemption, you should know the number of the Executive Order covering the international organization and should have some written evidence of your acceptance or designation by the Secretary of State.

  • Ultimately, you wind up at the same place, which is no tax liability, but your question was should I file a tax return, and the politically correct way to handle this is as I described above, to include your wages on line 7 of your Federal 1040, and then to exempt them on line 23 by quoting the # XXXXX the Executive Order deeming the World Bank to be an international organization.

    I understand that we do not live in a perfect world, and if your employer will not issue a W2, you may use a substitute W2. See below:

    Substitute forms

    I hope this additional information helps

    Anne, Master Tax Preparer
    Category: Tax
    Satisfied Customers: 1696
    Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
    Anne and other Tax Specialists are ready to help you

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