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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22646
Experience:  Taxes, Immigration, Labor Relations
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Foreign national moving back to home country but still holding

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Foreign national moving back to home country but still holding a US account

Hi. I just ended a two-years working experience in the US and I'm now back to my home country (Italy). I was in a J1 status.
For contract reasons, I will have to stay in Italy for at least one year and a half, which will give me an academic title that I would have lost moving permanently in the US in this very moment of my career. However, at present, I'm fairly positive I'll try to come back to the US within the next 2-3 years.
In the last days of my moving-out process, I decided I was going to try to keep my CITIbank account open.
I think it might come handy during the multiple trips to the US I'll be facing in the immediate future, as well as a way to quickly and effectively make payments/deposits of residual credits/debits from my US life (rent deposit, last paycheck and utilities, etc.). Plus, I won't have to open a new one if I ever come back.
I discussed the different options with some bank's reps while still there and that said I could easily keep the account alive just changing my mailing address to the foreign country (which I did). I left some money on balance, but won't have any income there.

Today I received a letter from the bank in which they ask IRS Tax certification to prevent backup withholding. They ask to either file a W9 (US person) or a W8-BEN (Foreign Person) since they have no TIN or foreign status information in my file.
Questions:
- Shortly after arriving to the US, as a J1, I obtained a SSN (which I now realized I never transmitted to the bank- it was in the coming when I opened the account). Should I file the W9 with my SSN even if I'm not a US person, or should I file the W8-BEN regardless of the SSN to which my IRS file is related (I will be filing for 2013 from Italy)?
- W8-BEN Part II is dedicated to the possibility of claiming tax treaty benefits. Italy and the US do have a tax treaty, but I believe I used it all!
I was waived Fed and state taxes for my 2-years stay, but I was told that if I had stayed more, I would have had to pay them. The treaty is only applicable to your first two years. Should I check the treaty benefits anyway or not? Again, I won't have any US income to report anyways.
- Generally speaking, is there any risk/ something I need to know about holding a US account from outside the US?

Thank you very much.

R
Submitted: 10 months ago.
Category: Tax
Expert:  Lev replied 10 months ago.

Lev :

Hi and welcome to Just Answer!
The issue is that withholding is generally required from income received by nonresident aliens.
Since you do not expect any income - there is nothing you need to worry about withholding and you may not claim tax treaty benefits as such benefits are related to specific income types..
Because you already have SSN - you should use that SSN for tax purposes - and may not apply for ITIN.

Lev :

As a nonresident alien - you need to provide bank with form W8BEN - just specify the country of your residence - Italy and your SSN which is also used as a tax ID.
As long as there is no income and you will use that account for personal transactions only - there should not be any issues.
As you might know - there is a tax treaty in effect between the US and Italy.
You may find official text here - http://www.treasury.gov/resource-center/tax-policy/treaties/Documents/italy.pdf
The treaty provides some benefits compare to the regular tax laws of both countries.
You may review for future information, but as long as there is NO income - the fact itself of having a bank account would not affect your tax liability.

Lev :

In additional - not related to your bank account - if you are either a resident or a nonresident alien departing the United States, you will usually have to show that you have complied with the U.S. income tax laws before departing from the United States. You do this by obtaining a tax clearance document, commonly called a "Departure Permit" or "Sailing Permit" from the IRS.
However - There are some categories of people not required to obtain a departure permit or sailing permit. In particular - alien students, industrial trainees, and exchange visitors, including their spouses and children, who enter on an F-1, F-2, H-3, H-4, J-1, J-2, or Q visa are not required. So - if your bank would ask to provide a tax clearance document - you may reply that as a person with J1 status - you are not required to have it.

Lev :

Please let me know if you need any clarification or need any help with other tax related issues.

Customer:


Hi Lev. Thank you very much for your thorough reply.






I'm going through the W8BEN right now, I have another quick question:






My bank attached a "mailing instruction" sheet saying that as account owner I have to mail a form of identification (fine) + A REASONABLE EXPLANATION IN WRITING THAT IS SIGNED AND DATED SUPPORTING YOUR CLAIM OF FOREIGN STATUS. What does that mean? What am I supposed to write?


Lev :

You will just explain your situation as you did in this question - attach a separate note that you were presented in the US on J1 visa and are living to fulfill your visa terms. As such you will be a nonresident alien and are planning to use the account for personal purposes.

Expert:  Lev replied 10 months ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

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Expert:  Lev replied 10 months ago.
Just in case you were not able to use the chat - I am switching to Q&A mode and posting the answer below.
Please feel free to communicate if you need any clarification or have other tax related issues.

You will just explain your situation as you did in this question - attach a separate note that you were presented in the US on J1 visa and are living to fulfill your visa terms. As such you will be a nonresident alien and are planning to use the account for personal purposes.
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22646
Experience: Taxes, Immigration, Labor Relations
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