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Amit2212 · Jan 15, 2009, 04:00 AM

Hi,

I was in US from Sept 07 - Feb 08 alongwith my wife and son. I was on a L1 visa.

I had applied for my wife's and son's ITIN while filing returns for 2007. I received the ITIN for my son but my wife's ITIN got rejected.

The reason given was "no valid tax return was accompanying th ITIN application".
Although I got the tax return amount as prepared by the H&R Block guys, not sure if the ITIN rejection for my wife had any impact on the tax return amount.

I am back in India since Feb 08. Now I need to file tax return for 2008, should I again try applying for ITIN for my wife from India or just submit a return with only my son as dependent?

I am asking because I worked for only 2 months in 2008, so is it worth the effort to apply for ITIN again from India.

Also what if I don't apply again, are there any penalties for that?

Thanks in advance.

MukatA · Jan 15, 2009, 05:13 AM

It is surprising why ITIN of your son was also not rejected.

For 2007, you were to file non-resident tax return. On non-resident tax return you can not claim your son. Which return did you file?

Amit2212 · Jan 15, 2009, 08:18 AM

I filed a non-resident return and also got my tax refund as calculated.

My question is what should I do for this year? Should only show my son as dependent?

Also, if my wife's ITIN was rejected then how come I got all the tax return amount calculated considering her as a dependent as well?

AtlantaTaxExpert · Jan 15, 2009, 10:53 AM

I agree with MukatA.

As an Indian citizen filing a non-resident tax return undet a L-1 visa, you are NOT entitled to claim either your wife or your son as a dependent, because you did NOT meet the Substantial Presence Test for either 2007 or 2008.

For 2008, file Form 1040NR-EZ, file as a MARRIED person and claim only your own personal exemption. You STILL are not entitled to either your wife's or son's dependent exemption.

MukatA · Jan 15, 2009, 11:37 AM

Originally Posted by Amit2212

I filed a non-resident return and also got my tax refund as calculated.
My question is what should i do for this year? Should only show my son as dependent?
Also, if my wife's ITIN was rejected then how come i got all the tax return amount calculated considering her as a dependent as well?

Check your 2007 tax return again to make sure that you filed the correct return. On Form 1040NR, there is no space to claim exemption for spouse of a non-resident. Also you can not claim a dependent. For 2008, file a non-resident tax return and forget about claiming your spouse or child.

About 2007 tax return, IRS computers accept most of the returns as filed. It does not mean that your can not be audited or IRS will come come up with additional demand.

Amit2212 · Jan 20, 2009, 12:17 AM

I filed my return for 2007 on 1040-EZ. I got it done from H&R Block people.

If what you say is correct, then how come the H&R Block people got it wrong?

If at all my 2007 tax return is incorrect, what kind of penalty will I be facing?

AtlantaTaxExpert · Jan 20, 2009, 10:55 AM

H&R Block got it wrong because most H&R Block people have NO EXPERIENCE filing tax returns for foreign nationals.

The penalties for filing an incorrect tax return vary, but can be substantial. If you come forward and amend the return voluntarily, the IRS normally will only hold you responsible for any additional income tax plus interest, but will waive any penalties.

If they discover the error and come looking for you, however, then the penalties and interest could easily DOUBLE the tax due.

For these reasons, I recommend you amend the return and correct the error.

Amit2212 · Jan 20, 2009, 10:09 PM

Thanks for all the help. So what all forms should I file for the amended tax return?
1040NR-EZ?

I am currently in India, can you tell me f there is any way I could file the amended tax return, for last year from here itself?

Thanks again.

MukatA · Jan 20, 2009, 11:18 PM

You will file Form 1040X (amended return).

On tax due the interest is 6% per year. The penalty is 0.5% per month, which may be waived if attach a statement and request.

AtlantaTaxExpert · Jan 21, 2009, 12:30 PM

The Form 1040X is filed with a properly-prepared Form 1040NR-EZ attached.

msurya03 · Mar 19, 2010, 12:11 PM

Hi,
I'm confused with something here.. Im filing my tax returns thorugh some agent and also asked him to apply ITIN for my wife as she is not eligible for SSN. My agent is saying he cannot file returns jointly without ITIN for my wife... can both be done together? Please help me. Im running out of time to file returns