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    andfaedo's Avatar
    andfaedo Posts: 1, Reputation: 1
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    #1

    Apr 10, 2006, 11:17 AM
    Usa-italy tax treaty
    Hello,
    I am an Italian PhD doing a research fellowship UCSF.
    I am here on a J-1 visa, arrived July 2004 and leaving 2007.
    I am filing my tax return now, and I don't know if I can apply for the exemption based on the treaty with Italy or not.
    If I claim the exemption now, am I going to pay all the taxes of the last two years next year when I can not use the treaty anymore?
    Thanks
    Andrea
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Apr 11, 2006, 08:44 AM
    Andrea:

    I just reviewed IRS Pub 901. I could find no provision specifically for research.

    I assume there is some teaching involved with your position, in which case you can claim a total exemption from taxation for up to two years. However, if you exceed two years in country, the exemption is voided and the IRS will ask for back taxes (plus interest plus penalties for the two years you took the exemption).

    My advice: Do NOT claim the exemption; the adverse effects is not worth the risk.
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