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USTaxAdvising
USTaxAdvising, CPA
Category: Tax
Satisfied Customers: 1085
Experience:  US Taxation specialist.
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Hi, I will be a sole member of a Nevada/Wyoming LLC and sole

Resolved Question:

Hi, I will be a sole member of a Nevada/Wyoming LLC and sole director. I'm a NRA.

We will have a virtual office in Nevada/Wyoming and a NRA employee who will work outside the US.

We will not do business within the US, except for the virtual office presence.

Will the company be considered US resident for tax purposes?

Which forms will I need to fill with IRS (return, employment, etc)?
Submitted: 1 year ago.
Category: Tax
Expert:  USTaxAdvising replied 1 year ago.

USTaxAdvising :

Hello, Thank you for using justanswer. I can assist you with your questions today.

USTaxAdvising :

When you say "We will have a virtual office in Nevada/Wyoming" - is this virtual office actually served out of Nevada Wyoming or is it merely just a mailing address and the virtual office is actually served from a country outside the U.S.?

Customer:

Hi, just a mailing address. Business consists in providing services at the clients'premises

USTaxAdvising :

Ok then the company should not be considered a U.S. resident for tax purposes.

USTaxAdvising :

Thus not subject to U.S. taxation.

Customer:

Ok, is this true even though this address is different from the address of the registered agent?

USTaxAdvising :

Since you are the sole owner of the LLC it will be classified as a "Disregarded Entity" under U.S. federal income tax princples. See Form 8832 instructions here for support - http://www.irs.gov/pub/irs-pdf/f8832.pdf

Customer:

OK, but since we hire employees and office space, would we need to file any form? if yes, which ones?

USTaxAdvising :

this true even though this address is different from the address of the registered agent? - Yes this even if the address is different than the registered agent.

Customer:

So you are saying that having a virtual office in the US state would not represent a US nexus? So where is the company resident then? Is it where the manager is resident?

USTaxAdvising :

OK, but since we hire employees and office space, would we need to file any form? if yes, which ones? - I don't see you having to file any payroll forms since you are not doing business in the U.S. and are not employing U.S. citizens. If you were doing business in the U.S. and employing U.S. residents/citizens then you may have a payroll related filing requirement.


Customer:

OK, suppose we wanted to make sure that the company is US resident (and not resident where the manager is resident). Can we just file in the US based on the fact that we have an office in the US?

Customer:

In that case, what should we file? 1044 at least, I imagine.

USTaxAdvising :

So you are saying that having a virtual office in the US state would not represent a US nexus? - Correct, the mere virtual office should not create nexus to the U.S. This is a tricky area of U.S. taxation that is not yet regulated but currently this is the general position of the tax professional community. So where is the company resident then? - the company will be resident wherever you personally are resident. Is it where the manager is resident? - Yes, where the sole owner of the LLC is resident.


USTaxAdvising :

Can we just file in the US based on the fact that we have an office in the US? - certainly you can file if you wish. You would need to file a Form 1040NR and report the LLC income/deductions on Schedule C.

Customer:

OK, and no other form I guess, even though we have a foreign employee (don't we need WBEN 8 at least?)

USTaxAdvising :

OK, and no other form I guess, even though we have a foreign employee (don't we need WBEN 8 at least?) - I don't see the necessity. So long as you don't do any business in the U.S. nor have income from U.S. sources there will be nothing to report. This is the benefit of the disregarded entity. If you formed a U.S. corporation or partnership then my answers would be completely different. Since the LLC is disregarded everything is reported by you personally, thus the rules of individual taxation apply. (note that the U.S. does not require foreign persons to file tax returns who are not citizens/residents and/or do not have U.S. sourced income)


Customer:

OK thanks. Just a last question: so suppose we wanted US residence of the company. Then we would be better off with a corporation, right? In that case the presence of the virtual office would represent our place of business and, unless challenged, we would be considered a US corporation by IRS. Correct?

USTaxAdvising :

Then we would be better off with a corporation, right? - Somewhat yes, correct In that case the presence of the virtual office would represent our place of business and, unless challenged, we would be considered a US corporation by IRS. Correct? - Correct, you would be a corporation by the IRS and U.S. and thus be required to file tax returns regardless of the business residence.

Customer:

OK, Thanks very much

USTaxAdvising :

No problem, glad I could I help.

USTaxAdvising, CPA
Category: Tax
Satisfied Customers: 1085
Experience: US Taxation specialist.
USTaxAdvising and 7 other Tax Specialists are ready to help you

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