Should I delay amending tax return until I have received H1B visa?

[Lily Fang]

As a non-resident alien, I have to file tax using Form 1040NR. However, I was not aware of this rule when I filed tax for year 2016 in February 2017. The professional tax preparer, of whom I used the tax filing service didn't know about this rule either, hence processed my tax filing on Form 1040. Now that I know about the wrong status filing, I would like to amend my tax return. The problem is I plan to apply for H1B visa in April 2019. I'm afraid that if I send the amended form now, it may take a long time for the IRS to process and in the worst case, I might get audited by IRS, which might lead to delay or denial of my H1B. I'm considering to wait until I have received H1B and send the amended tax return by then, but I'm afraid that is illegal. Should I go ahead and amend RIGHT NOW or wait till I get H1B? If I wait, is that considered fraud?

 

[LdiJ]

As a non-resident alien, I have to file tax using Form 1040NR. However, I was not aware of this rule when I filed tax for year 2016 in February 2017. The professional tax preparer, of whom I used the tax filing service didn't know about this rule either, hence processed my tax filing on Form 1040. Now that I know about the wrong status filing, I would like to amend my tax return. The problem is I plan to apply for H1B visa in April 2019. I'm afraid that if I send the amended form now, it may take a long time for the IRS to process and in the worst case, I might get audited by IRS, which might lead to delay or denial of my H1B. I'm considering to wait until I have received H1B and send the amended tax return by then, but I'm afraid that is illegal. Should I go ahead and amend RIGHT NOW or wait till I get H1B? If I wait, is that considered fraud?

It was not necessarily inaccurate for you to file a regular 1040. How did the information come about that made you feel that you had filed incorrectly?

 

[Lily Fang]

It was not necessarily inaccurate for you to file a regular 1040. How did the information come about that made you feel that you had filed incorrectly?

I first came here in Oct 2015. As I have researched after last year tax filing, non-resident aliens who have lived in the U.S for less than 5 years have to use Form 1040NR.
Moreover, I do receive scholarship from my school, and this is what IRS stated about this : "You must file Form 1040NR, U.S. Nonresident Alien Income Tax Return (or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents) only if you have income that is subject to tax, such as wages, tips, scholarship and fellowship grants, dividends, etc. "
This is the IRS source : https://www.irs.gov/individuals/international-taxpayers/taxation-of-nonresident-aliens

I wish it was not necessarily inaccurate for me to file a regular 1040 as you said, but it seems not ok

 

[LdiJ]

I first came here in Oct 2015. As I have researched after last year tax filing, non-resident aliens who have lived in the U.S for less than 5 years have to use Form 1040NR.
Moreover, I do receive scholarship from my school, and this is what IRS stated about this : "You must file Form 1040NR, U.S. Nonresident Alien Income Tax Return (or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents) only if you have income that is subject to tax, such as wages, tips, scholarship and fellowship grants, dividends, etc. "
This is the IRS source : https://www.irs.gov/individuals/international-taxpayers/taxation-of-nonresident-aliens

I wish it was not necessarily inaccurate for me to file a regular 1040 as you said, but it seems not ok

If you are here on an F1 visa, then yes, you are required to file a 1040NR. Otherwise the 5 year rule does not apply. Otherwise, the substantial presence test applies.

Before you go to the trouble of amending your 1040 to a 1040NR, have a tax professional run the numbers for you to see if it produces a different result than the 1040.

 

[Lily Fang]

If you are here on an F1 visa, then yes, you are required to file a 1040NR. Otherwise the 5 year rule does not apply. Otherwise, the substantial presence test applies.

Before you go to the trouble of amending your 1040 to a 1040NR, have a tax professional run the numbers for you to see if it produces a different result than the 1040.

Thank you for your prompt reply. I should have mentioned about that in the previous reply. Yes, the result is much different if I use 1040, and it shows that I owe IRS an amount. I have no problem in doing the right thing, paying the tax that I have to pay. The only thing that bugs me is that this may affect my H1B process. Just want to ask if it's possible for me to delay the amend till I receive H1B.

 

[LdiJ]

Thank you for your prompt reply. I should have mentioned about that in the previous reply. Yes, the result is much different if I use 1040, and 1040 result shows that I owe IRS an amount. I have no problem in doing the right thing, paying the tax that I have to pay. The only thing that bugs me is that this may affect my H1B process.

Correcting a mistake will not have a negative effect on your H1B process.

 

[Lily Fang]

Correcting a mistake will not have a negative effect on your H1B process.

Thank you for your help, I really appreciate that.

 

[PayrollHRGuy]

Correcting a mistake will not have a negative effect on your H1B process.

Not correcting the mistake could cause a negative effect on your H1B process.

 

[Taxing Matters]

Thank you for your prompt reply. I should have mentioned about that in the previous reply. Yes, the result is much different if I use 1040, and it shows that I owe IRS an amount. I have no problem in doing the right thing, paying the tax that I have to pay. The only thing that bugs me is that this may affect my H1B process. Just want to ask if it's possible for me to delay the amend till I receive H1B.

Amend the return. You are obligated to do that, and the longer you wait the more it costs you as the interest will continue to accrue on your unpaid tax. It should have no adverse impact on your visa process; the government expects you to comply with the tax law, after all.

 

[t74]

In the future, have a CPA or Enrolled Agent prepare your taxes. A firm specializing in international tax filings is your best choice even if not located in your community.

 

[LdiJ]

In the future, have a CPA or Enrolled Agent prepare your taxes. A firm specializing in international tax filings is your best choice even if not located in your community.

Actually that is not very good advice. If she wants, she can go with a firm that specializes in doing taxes for foreign students with work permits on F1 visas, but a firm specializing in international tax would be enormously expensive and not remotely worth it for her scenario.

She really doesn't even need someone specializing in taxes for foreign students at this point. She knows that she needs to do form 1040NR now and its actually less complicated than a 1040.

 

[Taxing Matters]

She really doesn't even need someone specializing in taxes for foreign students at this point. She knows that she needs to do form 1040NR now and its actually less complicated than a 1040.

I would still say she ought to go to someone experienced in taxation of nonresident aliens and the Form 1040NR. There are special rules that apply that differ from the usual tax rules for citizens and residents and simply relying on tax software that does the 1040NR is not good enough. If the person using the software doesn't understand the issues then there is a good chance the return might end up done incorrectly. I too often have to deal with the problems caused by preparers who did a return they didn't understand because they just relied on the software to get it right. The software can be good but is not substitute for the knowledge and experience of a tax pro. The old computer adage still applies: garbage in, garbage out (GIGO).

 

[Lily Fang]

Thank you all for your insights, I feel much assured now and will proceed with the amend.

 

[LdiJ]

I would still say she ought to go to someone experienced in taxation of nonresident aliens and the Form 1040NR. There are special rules that apply that differ from the usual tax rules for citizens and residents and simply relying on tax software that does the 1040NR is not good enough. If the person using the software doesn't understand the issues then there is a good chance the return might end up done incorrectly. I too often have to deal with the problems caused by preparers who did a return they didn't understand because they just relied on the software to get it right. The software can be good but is not substitute for the knowledge and experience of a tax pro. The old computer adage still applies: garbage in, garbage out (GIGO).

True, but I don't rely on software to do 1040NRs. I do them by hand and read the instructions every time, as I do not do enough of them to feel that I can do so accurately without reading the instructions. So, it would not hurt to go to someone who specializes in that sort of thing. A tax professional located near a major university would likely have that experience.

 

[NeilTheCop]

DHS has a handy page showing the limitations on the work you can do and also at the bottom it gives the IRS requirements.
https://studyinthestates.dhs.gov/sevis-help-hub/student-records/fm-student-employment/student-employment-overview