TN 14 (04-06)

GN 05010.025 Determining the Tax Status of a Claimant/Beneficiary Who Is (or Will Be) Outside the U.S.

A. Introduction

The SSA-21 (Supplement to Claim of Person Outside the United States) usually contains enough information to determine whether a claimant/beneficiary who is, or will soon be, outside the U.S. is subject to nonresident alien tax withholding. (See GN 00205.170 for information on obtaining an SSA-21.)

B. Policy

SSA assumes aliens outside the U.S. for less than 3 months keep their U.S. resident status.

An alien who has any of the evidence in GN 00303.440 is a lawful permanent resident of the U.S., as long as the conditions in GN05010.035B. are met. However, to meet the substantial presence test, “presence” must be actual physical presence in the 50 States, D.C., Guam or the NMI.

Absent information to the contrary, a residence address in a tax treaty country establishes that the claimant is a resident of that country if he/she also lives there. Evidence of his/ her tax treaty country residence must be obtained if he/she is living elsewhere (as explained in GN 05010.080).

An alien cannot be considered a U.S. resident for any tax year in which he/she claims a tax treaty advantage or benefit as a resident of a country other than the U.S. SSA assumes that an alien alleging U.S. residence has not claimed such a tax treaty advantage or benefit.

C. Procedure

1. General

Get an SSA-21. If the SSA-21 is completed by a representative payee who is not living with the claimant/beneficiary, get a separate statement about residence only if it is required under GN 05010.030 through GN 05010.082.

a. Claimant/Beneficiary a U.S. Citizen (For Determining U.S. Citizenship, See GN 00303.100 through GN 00303.120, and for Persons Born in the U.S. Virgin Islands, GN 05010.010A.3.)

No tax withholding action necessary.

b. Alien Claimant/Beneficiary Outside U.S. for More Than 3 Months

  • U.S. Residence Alleged — Take action as explained in GN 05010.025C.2.

  • U.S. Residence Not Alleged — Explain the tax withholding provisions. Handle as any case involving tax withholding.

Do not develop for residence in a tax treaty country unless such residence is alleged. If such residence is alleged, develop as explained in GN 05010.080.

2. Claimant/Beneficiary Outside U.S. Alleges U.S. Residence

a. Current and Future U.S. Residence Alleged

Ascertain whether the claimant/beneficiary has been lawfully admitted for permanent residence.

  • Claimant/Beneficiary Alleges Lawful Admission for Permanent Residence

    Verify lawful permanent resident status and that U.S. residence has not been revoked or abandoned as explained in GN 05010.030 and GN 05010.035.

  • Claimant/Beneficiary Not Lawfully Admitted for Permanent Residence (or Has No Evidence)

    Develop for the substantial presence as explained in GN 05010.030 and GN 05010.040 through GN 05010.055).

  • Claimant/Beneficiary Meets Substantial Presence Test and States Will Return to the U.S. Within 18 Months

    Get evidence showing the Department of Homeland Security (DHS) will permit him/her to reenter the U.S. and remain under conditions which are not excluded from presence in U.S. (as explained in GN 05010.040C.)

    Show an alien tax status of “3” (i.e., resident alien) if he/she has this evidence. Diary for verification of his/her continuing U.S. resident status as explained in GN 05010.050.

    Show an alien tax status of “5” (i.e. nonresident alien subject to tax withholding) if he/she does not have this evidence. Advise him/her to contact SSA