Foreign tax client

[fliszt]

English born client worked in US for several years during adult years. Had a social security number, paid taxes and worked at a US company that had a 401(k) program. She moved back to England a couple years ago. Now she has been informed that she must give up her S/S# by end of 2009 and must cash in her 401(k). She is only 55 and not eligible for 59-1/2 penalty exemption. Plus, how does she file taxes if she has no S/S#? Is she not eligible to roll over her 401(k) to an IRA? She does not want to pay the penalty.
Thanks much for the help.
Larry

[taxmandan]

She still has that SS number, once issued it's good for life. She should be able to roll the 401K over to an IRA like anyone. Did/Does she have a green card or was she on a work visa?

[fliszt]

thanks for your reply Dan

Yes, she had a green card for (as I understand it) for about 15 years. I will have to call her to find out what kind of S/S Admin notice she received "revoking" her S/S#. I'll post the answer. Trying to find the answer to my question, I see the 1040NR is to be filled out. I guess she'll get a 1099R IF she cashes in the 401 but she would prefer to roll it over to an IRA. And I would think there's an exception to the penalty of early withdrawal IF it is mandatory. This type of return/questions are a little bit beyond my skill level, so I REALLY appreciate your help!!
Larry

[Nashville]

No problem

Larry, I believe your client should be O.K.

For her social security #, continue to use the same one she has been using. Once used, this serves as a sort of "address" in the IRS data retention system. I believe that's all the IRS cares about -- they're not into ICE and SS retirement and all the other functions that come with a SS #.

I would think any financial institution in the U.S. will be happy to take this Brit's rollover money. The rollover rules might even allow an import/export bank to administer her account, in which case she can keep her 401(k) in pounds, Euros, Marks, Guilders, or any other currency.

Check with your nearest V Alexander office - they are an import/export bank, and I'll bet they have an office in Minneapolis/St Paul area.

[fliszt]

Thanks Nashville --

I'll do just that. I really appreciate the help from this board!!!!!!
Larry