Substantial Presence Test Exception for Foreign Students

Even though a foreign student may pass the substantial presence test, an exception exists in the IRS code that allows foreign students to continue to be treated as nonresident aliens for US tax purposes.

The most important advantage of hiring an immigration lawyer is that they are aware of all the latest rules and regulations. For example, the United States Government has made immigration laws strict after the terrorist attack on the Twin Towers. There are several minor details that you could miss while preparing your application if you do not take help from an immigration lawyer. Every country has different immigration regulations. For example, rules applicable to someone wanting to immigrate to Germany would not apply for someone wanting to move to the United States.

An Immigration law attorney helps to minimize the chances of an application getting rejected. Moreover, they understand every individual case on its merits. They understand how to make the best of your individual professional and financial profile to file a successful immigration application. The attorney would also know how to help you if your application does get rejected for any reason. You could even seek professional help if you had filed the application by yourself the first time.

Immigration attorneys have vast experience in handling several types of applications. They are the ideal people to seek advice even if you want to file your application yourself. They would also be able to tell you with some amount of accuracy if you are eligible for immigration. You could also seek help with long-term stay visas from an immigration law attorney. Sometimes your requirement could be resolved with such a visa without requiring the difficult process of immigration.

Always ensure that you work only with reputed law firms and professionals. Working closely with a certified immigration law attorney also ensures that you do not end up doing something illegal. There are several fake law firms online which offer too-good-to-be-true services. Do not register with such sites without ensuring that their credentials are correct. Fake law firms often lure people with false claims of successful immigration options. Students are the most vulnerable. Several cases have been detected where students were even granted admission to fake universities to ease their immigration process to another country. Work with only the certified and trusted lawyers to ensure that you do not end up in police custody and stranded in a foreign country. Never fake any information in your application form either.

The Closer Connection Exception to the Substantial Presence Test for Foreign Students

 

Even though a foreign student may pass the substantial presence test, an exception exists in U.S. law which would allow the foreign student to continue to be treated as a nonresident alien. The Internal Revenue Code contains two exceptions to the substantial presence test which can be used by aliens to maintain nonresident status. First, there is the general exception to the substantial presence test available to all aliens under Internal Revenue Code section 7701(b)(3)(B) and (C) and Treas. Reg. § 301.7701(b)-2 (known as the closer connection exception). Most foreign students cannot use this exception, however, because of the requirement that the alien cannot have been physically present in the United States during the current year for more than 183 days, and the requirement that the alien’s tax home be located outside the United States. Most foreign students fail both of these tests.

The second exception to the substantial presence test for aliens is set forth in Internal Revenue Code section 7701(b)(5)(D) and (E) and in Treas. Reg. § 301.7701(b)-3(b)(7)(iii). The exception is available only to alien students (not teachers/researchers, etc.), and contains four requirements for its application. The student –

1. does not intend to reside permanently in the United States;

2. has substantially complied with the immigration laws

3. has not taken any steps to change his nonimmigrant status in the United States toward becoming a permanent resident of the United States; and

4. has a closer connection to a foreign country than to the United States as evidenced by the factors listed in Treasury Regulation 301.7701(b)-2(d)(1).

 

The burden of proof is on the student to prove these four factors. To claim the exception for students on an income tax return, a student should attach Form 8843, Statement for Exempt Individuals and Individuals With a Medical Condition to the student’s Form 1040NR or 1040NR-EZ.