Pension from Israel?

[zeros]

Client reported this income to me last year and I wasn't sure it to be taxable or not. I did report it and this year he comes in and mentioned that it really is not taxable as the tax was paid in Israel. Would this be correct to amend the return and get the refund back? Should it have been taxed? Not certain. He lived in Israel and now lives in the USA.

[AZUKHiker]

More Info needed

Is your client a US Citizen or Green Card holder?

If either, default is that worldwide income is taxable on US tax return. Then you need to look at the US/Israel tax treaty to see if there is an exception for pensions. Also check the "Savings Clause" near the beginning of the treaty as most have such a clause which means that apart from any noted exceptions in the clause the treaty does not apply to US Citizens and sometimes Green Card holders.

If the income is taxable on the US return then consider the credit for the any Israel tax paid using Form 1116.

[TAXNJ]

If this is ....

Client reported this income to me last year and I wasn't sure it to be taxable or not. I did report it and this year he comes in and mentioned that it really is not taxable as the tax was paid in Israel. Would this be correct to amend the return and get the refund back? Should it have been taxed? Not certain. He lived in Israel and now lives in the USA.

beyond your scope of tax knowledge you might consider consulting someone with the type of required expertise. There maybe a due diligence and liability issue involved.