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Tax obligation under U.S. Tax Laws for person residing abroad

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opsoni

Junior Member
I SHALL BE THANKFUL FOR REPLYING MY TAX QUESTION UNDER THE CIRCUMSTANCES AND FACTS MENTIONED BELOW:

Mr. X's mother (Indian Citizen) happened to be in United State during the year 1975 for a couple of days. During her stay in U.S. (New York) she gave a birth to a male child. The child as born in U.S. adopted citizenship of U.S. Except this neither the child nor his parents have any concern with U.S. After this event they returned to India. The child grownup and completed his education in India. He holds P.O.I. card i.e. Persons of India Origin Card and also a valid Passport issued by the government of U.S.

The said child, thereafter, residing in India and have completed his education in India. After completing his education he engaged in doing his own business in India and have substantial income there from and filing his income tax returns and paying taxes as per the law applicable in India. He has no concern with U.S. Neither he has any source of income from U.S. nor is he having any residence or any kind of property in U.S. He has his permanent home in India, throughout residence in India; he has his centre of vital interests in India, having his principal place of business in India. Moreover he has been married in India and has got all his concern in India.

Under the above facts and circumstances and in view of the U.S. tax laws in force and tax treaty between U.S. India the following questions may please be replied:

1. Whether he is any concern with U.S. Income tax laws?
2. Whether he is under an obligation to submit his return of Income from Indian sources?
3. How can one get exemption/relief form U.S. Tax formalities?
 


abezon

Senior Member
The treaty is irrelevant -- US citizens cannot invoke treaty rights on their US tax returns, except in narrow circumstances.

Since he is a US citizen, he is required to file a US tax return every year & report his worldwide income. He can exclude earned income and/or claim a foreign tax creidt for taxes paid to India. Chances are this would result in $0 tax.

The returns are necessary if he wants to renew his US passport or ever be able to move to/work in the US.

If he is absolutely certain he will never need US citizenship, he can ex-patriate, which would exempt him from filing US tax returns.
 

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