Hello,
I did my masters in USA and I am OPT (F1 Visa). And I have been working since 2011 JAN as a full time employee. So, the problem is , my employer deducted the Medicare Tax and SSN tax for complete 2011. I paid $3000+. Now I applied for OPT tax refund and the IRS declined the tax return request. What is the next step?

The reason they mentioned int the letter is:
We have disallowed your claim because, in accordance with Internal Revenue Code 7701(b), you meet the substantial presence test and are considered a resident alien; therefore you do not qualify for exemption from FICA tax on wages.

In 2012, I spoke with my employer and I told them that I am on OPT. Now they are not deducting the SSN and Medicare tax from my paycheck.

Please let me know, how to proceed.

I would have to see WHY the IRS denied your FICA refund before I could recommend your next course of action.

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Originally Posted by AtlantaTaxExpert

I would have to see WHY the IRS denied your FICA refund before I could recommend your next course of action.

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Thanks for the quick response. If you want to see the document them sent me, please let me know. I can send it to you

The reason they mentioned int the letter is:
We have disallowed your claim because, in accordance with Internal Revenue Code 7701(b), you meet the substantial presence test and are considered a resident alien; therefore you do not qualify for exemption from FICA tax on wages.

In 2012, I spoke with my employer and I told them that I am on OPT. Now they are not deducting the SSN and Medicare tax from my paycheck.

Please let me know, how to proceed.

The answer from the IRS prompts me to ask this question: WHEN did you first arrive in the United States (month and year)?

I cam to us in Aug 2008.
I finished my Masters in Aug 2010.
My OPT Valid till Feb 2013.
I recently got H1 (April 2012) . It will start from OCT 2012

Thanks

When you submitted the Form 843 and 8316 to the IRS, did you send them a copy of your visa?

Your F-1 visa status makes you EXEMPT from the Substantial Presence Test, so their reason for denying the FUCA refund is NOT valid.

You will need to re-submit the Form 843 and 8316, plus all the support documents listed in IRS Pub 519, for re-consideration.

Quote:

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Originally Posted by AtlantaTaxExpert

When you submitted the Form 843 and 8316 to the IRS, did you send them a copy of your visa??

Your F-1 visa status makes you EXEMPT from the Substantial Presence Test, so their reason for denying the FUCA refund is NOT valid.

You will need to re-submit the Form 843 and 8316, plus all the support documents listed in IRS Pub 519, for re-consideration.

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I send them the copy of opt card, along with Form 843 and 8316. So, do I need to reapply? Or do I need to respond to the letter they sent me? In the letter they said, if I don't agree with their decision, I need to appeal. I really don't have any idea.. how it works. Do I need to hire a lawyer?can you guide me, how to respond to their letter?

Thanks

Call the IRS at the number on the letter and ASK how to proceed.

They may tell you that, once you provide them a copy of your visa that shows your visa status and WHEN you arrived in country, they will re-consider.

OR they may tell you to re-submit ALL of the paperwork, which In my opinion is most likely.

Do NOT hire a lawyer, as his fees will likely exceed the refund.

If you want my professional help, email me at the email address in my profile. You will find MY fees to be significantly less than a lawyer's fees.

Did you file Form 8843 with your tax return? You need to do this when you are exempt from the SPT.

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Originally Posted by newacct

Did you file Form 8843 with your tax return? You need to do this when you are exempt from the SPT.

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Hello Newacct,
I did not fill the Form 8843. But it seems Form 8843 is explicitly for Medical condition reasons to leave USA. Please correct me if I am wrong.

Thanks

It is mostly submitted by F-1 and J-1 visaholders to validate their exempt status.

Quote:

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Originally Posted by Kumar225740

Hello Newacct,
I did not fill the Form 8843. But it seems Form 8843 is explicitly for Medical condition reasons to leave USA. Please correct me if I am wrong.

Thanks

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No, it is for exempt individuals AND individuals with a medical condition. You as an F1 student are an exempt individual (exempt from the SPT) for 5 calendar years. Every year that you are an exempt individual, you need to file Form 8843, regardless of whether you need to file taxes. You can go back and file them for past years.

I'm not sure how exactly to respond to the IRS notice though; whether sending copies of 8843 will be enough.

The Form 8843 and the Form 843 are completely different forms, with different functions.

Your description of Form 8843's function is completely accurate.

However, the OP submitted Form 843 to request a refund of his improperly-withheld FICA (Social Security and Medicare) taxes, and it is the Form 843 that the IRS is citing in its letter to the OP.