Another Foreign Income

[Davc]

How do we report for a US citizen that is residing in Argentina and operating an internet business, all receipts are received through paypal into US bank account? She operates worldwide. She has not filed US taxes in YEARS!!! Now wants to file on self employment to increase her Social Security Benefit.

She's been tax dodging for years and now wants SS credits. I wouldn't file for her at all. Yes, for those who are wondering Argentina does have individual income tax which she should have been paying.

http://www.argentina-canada.net/regulations.html

[S T]

I am straddling the fence

Thanks Dave for the Link -

T/P claims this is a new business for her in 2008, and no other income over the years to report. Her husband always reports to Argentina, I think they do that at the source of Argentina Income, i.e. wages, etc, not sure how it works if you have a home based business in Argentina.

Yes, this is what bothers me, as now she wants to report to accrue Social Security Benefits. It is a cousin of one of my US clients.

I believe my thinking is all confused about now. However, I thought that if the t/p was a US Citizen or Dual Citizen they had to report Worldwide Income to US), regardless of the source of the income?

Do I need to be concerned about the tax reporting to Argentina, as long as t/p (spouse that has the business and funds being deposited into US Bank Account) is reporting to US?

Is The Argentina Treaty only for Investment Income or for earnings as a small business (sole proprietor) that is not a Corp?

Too many questions and not enough answers,

Thanks for your continued responses,

Sandy

[Zee]

She's been tax dodging for years and now wants SS credits. I wouldn't file for her at all. Yes, for those who are wondering Argentina does have individual income tax which she should have been paying.

http://www.argentina-canada.net/regulations.html

I wouldn't file the return either. It also bothers me that the IRS generally will not require filing of previous returns more than six years. What a scam, don't file and when you get close to retiring file six years only and collect SS for the balance of your life. If illegal aliens obtain the right to collect SS (or do they already have it?), I'm sure many would follow this strategy.

At second thought, this may not work. Doesn't SS for a SE-taxpayer require 40 quarters of net earnings with a minimum of $400? If so, wouldn't ten years of past returns be necessary?

This loophole could be ripe for fraud, huh?

[S T]

No Filing Requirement

In further questionning this client, she (US citizen) has had no filing requirement since 1982 when they moved to Argentina, has not worked or owned a business. Husband (NRA) reports to Argentina.

I guess the conflict I have now, is that what I believe to understand is that she is required to file with US since she is a US citzen and has foreign income, which will be excluded. Income not sourced to US. However due to self employment will be responsible for the SE tax.

Other conflict I have is her filing requirement to Argentina, and whether she reports or doesn't report, how does that affect me as a preparer for only the US Tax return?

Any thoughts? What a learning experience this is!

Thanks,

Sandy