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Banking > Offshore Banking > Cooperation with the US Tax Authority



Cooperation With the US Tax Authority and Avoiding Penalty

Cooperation with the US tax authority is mandatory and if you think you can escape it, you are greatly mistaken. The Internal Revenue Service (IRS) tends to discredit most of the common legal arguments against the filing of returns or paying of taxes.

When there is a lack of cooperation with the US Tax Authority from your part, the federal courts can penalize you to a maximum of $25000 in case a taxpayer’s argument is considered to be ridiculous.

In the US, the 16th Amendment to the Constitution that instituted the income tax stated, that the income tax is not a government, which indulges in the “taking” of property without due process of law.

Federal needs

As a taxpayer, you must have cooperation with the US tax authority. You must be filing a tax return annually with the IRS, the United States government agency managing the federal taxes and may be even the state tax agencies. The tax system of the US is based on self-assessment; therefore understanding its requirements is the responsibility of the individual.

The IRS also has federal tax filing requirements for the nonimmigrant individuals and their dependents. Cooperation with the US tax authority is binding on them too. The federal requirements differ depending on whether the scholar, student or dependent is considered to be a resident or nonresident alien to meet the federal tax requirements.

The Resident aliens and the federal tax requirements

The resident aliens for the federal tax purposes have to pay a tax based on the worldwide income. The tax treaty benefits may or may not be applicable. If you are a dependent who is a resident for federal tax purposes have a worldwide income, then you have the option of filing a separate or joint Form 1040.

The Nonresident aliens and the federal tax purposes

If you have a non-immigrant visa status and are a nonresident alien for the federal tax requirements, then also you must have cooperation with the US tax authority and file a tax return to the IRS.

Having dual status in the same tax year?

If you have changed your visa or your tax status in the US and at the same year, then you may have to bear additional filing requirements to show cooperation with the US tax authority. In this case, go through the IRS resource materials carefully.

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