Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax adviser filed taxes incorrectly using US-Spain treaty.

Customer Question
tax adviser filed taxes...

tax adviser filed taxes incorrectly using US-Spain treaty. Tax office says not valid and sent me a bill for 2 years a big amount, I cannot pay what are my options

Accountant's Assistant: What state are you in? It matters because laws vary by location.

Valencia

Accountant's Assistant: What steps have you taken so far?

None, received notice a few days ago,

Accountant's Assistant: Anything else you want the lawyer to know before I connect you?

Funds taxed were US IRA distribution

Submitted: 21 days ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 55 minutes by:
5/2/2018
Tax Professional: taxmanrog, Certified Public Accountant (CPA) replied 21 days ago
taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,068
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
Verified

Welcome to Just Answer! Thank you for giving me the opportunity to assist you! I will do my best to help!

I've been working in international taxation for over 31 years, and am very familiar with the various tax treaties. I use them extensively with the firm I work for.

Please give me a few minutes to type my response.

Ask Your Own Tax Question
Tax Professional: taxmanrog, Certified Public Accountant (CPA) replied 21 days ago

Pensions and annuities (from non-government sources) are addressed by Article 20 of the US-Spain Tax Treaty. The treaty states in paragraph (1)(a) "pensions and other similar remuneration derived and beneficially owned by a resident of a contracting State (Spain, in your case) in consideration of past employment shall be taxable only in that State (again, Spain)"

So under the treaty, the IRA distribution, even though paid from the US, was only taxable in Spain.

Your solution is to file amended US tax returns and claim a refund for the US taxes paid on the IRA distribution. You would file a Form 8833 with the amended tax return. This Form tells the IRS that you are electing to take advantage of the tax treaty, specifically the article allowing you to exclude the pension payments from taxation in the US.

If you amend your US returns for the two years, you can use the refunds to help pay the Spanish tax on the income.

Unfortunately, based on my experience, as long as you are receiving the pension payments from the US, the US trustee paying the pension will continue to withhold on it, and will report it to you on a Form 1042-S. So each year you will have to file a Form 1040-NR nonresident tax return, report the pension income, then deduct it under the Treaty, and claim a refund for the withholding tax.

I hope this answers your question. If you have any more, please feel free to ask and I will be happy to answer.

Thanks! Have a great week!

Roger

Ask Your Own Tax Question
Customer reply replied 17 days ago
Roger, I get distributions from my Investment IRA with Charles Schwab, therefore taxed on the distributions. However the Spanish Tax office has sent me a demand for payment of back taxes for 2013 and 2015. In their statement they state that my distributions are NOT pension, annuity or insurance, and have decided that it falls under ‘other income’ and isn’t covered by the tax treaty on double taxation!! How about article 24? Regards Chris
Customer reply replied 17 days ago
I am not home but can call later about 21:00 Spanish time via my US Skype number
Tax Professional: taxmanrog, Certified Public Accountant (CPA) replied 17 days ago
Under the US Spanish tax treaty, they Define what a pension is. And it does include IRA distributions. So I'm not sure how they can claim that. You should tell them you want to speak with someone who has substantial Authority, as defined by the treaty. I will find you that article.Regardless, under the treaty it is only taxable in Spain. So what you do is you claim a refund for the withholding in the United States, so you pay zero tax in the United States, and then Spain gets all of their tax on the income.
Ask Your Own Tax Question
Tax Professional: taxmanrog, Certified Public Accountant (CPA) replied 17 days ago
It really won't matter if Spain says that it's a pension or not. Because you are claiming the treaty benefits and excluding the income for United States tax purposes. And clearly, in the United States and IRAs considered a pension. So the IRS won't give you any problem with that.
Ask Your Own Tax Question
Tax Professional: taxmanrog, Certified Public Accountant (CPA) replied 12 days ago

If you request a premium service - preferably email - I can discuss this with you and show you how to file an amended return, or assist you with the actual filing.

Please let me know.

Ask Your Own Tax Question
Was this answer helpful?
Ask taxmanrog Your Own Question
taxmanrog
taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,068
1,068 Satisfied Customers
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.

taxmanrog is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,495 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,272 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
Filing an amended return. When filing an amended return for
Filing an amended return. When filing an amended return for S corp (1120S) for previous year do I need to include all forms included with original return, or only forms with any changes?… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
Irs tax question: If I file an amended return, will it
irs tax question: If I file an amended return, will it eliminate the understatement penalty? What should I do? Please provide IRS references.… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
Do i need to file amended return if I received a W2C in box
Do i need to file amended return if I received a W2C in box 12 Code W? It will impact my form 8889 in line 9 part 1. But it will not impact my line 13 in Form 8889. Do I still need to make amended tax… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,119 satisfied customers
I am filing as amended tax return for 2017. I owe $930.00.
I am filing as amended tax return for 2017. I owe $930.00. Am I eligible for extended payments? … read more
abci168
abci168
Principal
27 satisfied customers
Have question regarding filing of amended return for earlier
Hi Pearl, have question regarding filing of amended return for earlier year … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
Filed form 1040 form took the standard deduction, I am now
filed form 1040 form took the standard deduction, I am now filing the new york state, … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
VA income tax return form 760, Line 16, “ Taxable Income -
VA income tax return form 760, Line 16 , “Virginia Taxable Income - Subtract Line 15 from Line 9” what are the two bubbles “DTD” and “LTD” ? Should I fill in one ?… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
On form 1040 line4 21 other income. is this where i should
on form 1040 line4 21 other income . is this where i should enter an amount shown from my pensiopn payments form 1099R … read more
Cole Parker
Cole Parker
Principal/CPA
Bachelor\u0027s Degree
103 satisfied customers
Tax question: If I filed form 1040 online and it was
Tax question: If I filed form 1040 online and it was accepted and afterwards I filed form 4868 and it says accepted, does this extend the FBAR? Please provide IRS references. Thanks! Jonathan Wyman, C… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,119 satisfied customers
Finally filing 2016 income tax returns. Filing as "married
Finally filing 2016 income tax returns. Filing as "married filing separate return". Did not live with spouse at all in 2016. What is she on my return: an exemption? a dependent? an alimony expense onl… read more
abci168
abci168
Principal
27 satisfied customers
I am from Calfornia and sent Amended tax return 1040X to IRS
I am from Calfornia and sent Amended tax return 1040X to IRS at … read more
abci168
abci168
Principal
27 satisfied customers
My question relates to avoiding the double taxation related
My question relates to avoiding the double taxation related to sale of stock options reported on 1099-B and the W-2 !2b "V" box amount. I understand that I need to adjust the cost basis for the sales … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
I'd like to file an amended return and include tax
I'd like to file an amended return and include tax deductions for repairs completed on my 4plex using a 203k fha rehab loan. Do you know if there are limitations in using tax deductions when the work … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I had to file an amended return after I filed with E-tax.
I had to file an amended return after I filed with E-tax. There is a mistake on their preparing my 1040. I tried to talk to them but I could not understand what they were saying. I am 92 years old and… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
If I'm filling an amendment tax return so my sister can
If I'm filling an amendment tax return so my sister can claim her kids but was made aware I would receive an audit letter do I just let them know my sister is claiming my niece and nephew instead … read more
PhillipsEsq.
PhillipsEsq.
Attorney-at-Law
JD
59 satisfied customers
I want to ask a question about Income tax return form 1040..
Hello I want to ask a question about Income tax return form 1040.. I want to fill form but My wife doesnt have any ssn number. She is housewife and she has no income. Which option should I choose from… read more
James Daloisio
James Daloisio
Attorney
Doctoral Degree
227 satisfied customers
W, is there a amend tax return there at IRS there for me? My
Hi, my name is ***** ***** Miller, is there a amend tax return there at IRS there for me? … read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
128 satisfied customers
When filling a w-8 form claim of treaty benefits what
when filling a w-8 form claim of treaty benefits what tharticle for Mexico … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x