Dependent

[NotEasy]

Publication 17 says if you file a separate return, you can claim the exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another taxpayer. This is true even if the other taxpayer does not actually claim your spouse as a dependent. This is also true if your spouse is a nonresident alien.

So if the nonresident alien spouse (who is currently in oversea and without a SSN) fulfills all the requirements, does the taxpayer need to apply an ITIN for her in order to claim her as a dependent?

[taxea]

if the nonresident alien spouse (who is currently in oversea and without a SSN) fulfills all the requirements, does the taxpayer need to apply an ITIN for her in order to claim her as a dependent?

She has to go to the American Embassy where she is and get the necessary papers through them. Does she reside there full-time? You might want to know why they are separated. Is it possible they married just so he could claim her? taxea

[erchess]

Also if I'm not mistaken

the NRA spouse to be a dependent can't have any income anywhere in the world and still be a dependent on an MFS return. I didn't always feel this way but in the present regulatory environment there are two things I would do. First, I wouldn't touch this return unless the taxpayer either speaks English as his first language or you speak his first language fluently or you use an interpreter. My concern is that you can't afford for him to be believed if he later says that he did not understand what was going on with his return. Second I would prepare a written statement of every fact that is material to his return and not provable from American documents such as Forms W2 that he gives you. If applicable I would have this document translated into his first language. The two documents would say which was the translation and I would get both signed by both the translator and the taxpayer and of course you. I would keep the originals and give him copies along with everything else I gave him in his client folder. I would sign his copies and ask that both he and the translator do so in my presence.

My problem is that I am hard pressed to believe that his NRA spouse has absolutely no income other than whatever he sends her. If she for example lives with and is fed and clothed by her parents then her status as your client's dependent seems questionable. If she is employed or self employed or tends a farm of some sort and sells any of its products, then she has income. If she for example barters there may be a real problem translating that income into US dollars to put on a joint return but clearly her gross income is not zero and therefore she can't be his dependent on an MFS Return. I generally accept what my clients tell me about the facts of their lives but in cases where I know that the average tax examiner would immediately doubt the story I take steps to make sure that I can prove that my client told me the story. I don't go asking for proof beyond what I know settled law says I must see but I do probably go overboard in protecting myself against the client later denying that he told me something.