Client 1040 NR

[S T]

I have a client that is a US citizen, but has not filed taxes in the US in several years. Living in Mexico, no income? Living off of an inheritance.

The inheritance money was placed in to an account at Bank of America in California which has earned interest. At the time the account was opened, B of A, had a notation of no valid SSN # so did the appropriate backup withholding..

Client questioned Bank of America as to why the backup withholding, and B of A advised that he would have to file a 1040 NR and file an I-10 form. ??? Does this sound correct?

I am thinking form 1040 to report the interest and the backup withholding for a refund. Then file W-9 form with the bank so they terminate the backup withholding.

Sandy

[Koss]

Client questioned Bank of America as to why the backup withholding, and B of A advised that he would have to file a 1040 NR and file an I-10 form. ??? Does this sound correct?

I am thinking form 1040 to report the interest and the backup withholding for a refund. Then file W-9 form with the bank so they terminate the backup withholding.

Sandy

You got it right, Sandy...

A US citizen can never file Form 1040NR. Someone at B of A is smoking something...

Or they made an assumption that should never be made. They somehow assumed that the backup withholding was triggered by the fact that the account holder was a nonresident alien. Or they grossly misunderstood the meaning of the term "nonresident" as this term is used in the title of Form 1040NR. A US citizen may be a nonresident... perhaps a nonresident of Florida, or a even a nonresident of the United States. But no US citizen can possibly be a nonresident alien.

Someone at B of A ought to be prosecuted for practicing taxation without a license.

Oh, wait a minute... currently there is no license required for those who give tax advice...

Burton M. Koss
koss@usakoss.net

[S T]

More

Thanks Burton for the positive answer on the first post!

And more information keeps arriving. Got to Luv It!

Does it matter that this t/p is both a US citizen and a ciitzen of Mexico?? T/P is now claiming that he has citizenship in both, but has no income from Mexico only the income earned on the deposit on the inheritance in California.

T/P has had no income and has not filed a Fed or Calif return since 1992.

And then, to maybe complicate matters, added a significant other to the account as a signer on the account, which the bank records show both names. According to t/p not suppose to be a joint account, but sure appears that way from the documents. Significant other has some back tax issues with California and possibly IRS.

Why does it always seem simple on the surface, until I or any tax preparer start asking a multitude of questions and that taxpayer always "sucks us in"! Ugh!

Any further thoughts on how to approach this reporting?? Can t/p still just file the 1040 reporting the Schedule B income and credit for the backup withholding?
Sandy