[Milla2012]

Hello,
I have a question regarding the tax treaty between Russia and USA article 18. I received a stipend from my university in 2010 and I filed a tax return which has been granted. Now I got an examination of my 2010 tax report. And now they are saying that I am not qualified for tax return because in the article 18 it is said that the stipend has to be from abroad.
Could you give me the explanation of this article with respect to what they mean. It is not very clear from the article whether it is with regard to the country of residence or with regard to the us. Thank you

[taxesforaliens]

The treaty exempts scholarships/grants from non-US sources for students from Russia studying in the US.
If your stipend was from the US university, you will have to pay taxes on it.
You should respond to the letter you received from the IRS in a timely manner.
You can do an amended return (form 1040X plus any forms of the return that changed) and send it together with a cover letter referencing the IRS notice.

ARTICLE 18
Students, Trainees and Researchers
1. An individual who is a resident of a Contracting State at the beginning of his visit to the other
Contracting State and who is temporarily present in that other State for the primary purpose of:
a) studying at a university or other accredited educational institution in that other State,
or
b) securing training required to qualify him to practice a profession or professional
specialty, or
c) studying or doing research as a recipient of a grant, allowance, or other similar
payments from a governmental, religious, charitable, scientific, literary, or educational
organization,
shall be exempt from tax by that other State with respect to payments from abroad for the purpose of
his maintenance, education, study, research, or training, and with respect to the grant, allowance, or
other similar payments.
2. The exemption in paragraph 1 shall apply only for such period as is ordinarily necessary
to complete the study, training or research, except that no exemption for training or research shall
extend for a period exceeding five years.
3. This Article shall not apply to income from research if such research is undertaken not in the
public interest but primarily for the private benefit of a specific person or persons.

[Milla2012]

Thank you for your answer. But I am really confused now. There is a tread with similar problem to mine, but it seems to have different solution. Beside, at the time I was filing my tax return I called to IRS and they told me that I do not need to pay taxes on my stipend. Does anyone really know the answer?

[taxesforaliens]

Could you post a link to the other thread?
Not all treaties are the same, so the poster in that other thread might have been from a different country.
In my experience, IRS agents are not very familiar themselves with anything involving citizens of foreign countries (otherwise they would have caught the problem when you first filed your return).

[Milla2012]

https://www.askmehelpdesk.com/taxes/russian-f-1-student-federal-tax-exemption-based-us-russia-tax-treaty-322422.html#.T-pvimt5mK0
It is the same country as mine, I guess he received the stipend from the university as well.

[taxesforaliens]

The problem seems to be the interpretation of the phrase "payments from abroad". I interpret it that it means payments from countries you are not studying/living in. So if you study in the US, that would mean non-US sources only (or for US students in Russia with non-Russian sources of fellowships).
You might want to contact AtlantaTaxExpert (his email is in his profile).

[anabbb]

Can you share what you ended up doing? Thanks, Ana