[AtlantaTaxExpert]

Great! This makes my letter to the IRS unnecessary.

[The Texas Tax Expert]

ATE,

I don't believe this changes anything at all in the prior discussion. The US- India treaty technical explanation gives the US the right to tax the income retroactively if the person exceeds the two year period.

The 'may' in my view does nothing to change the situation. It is simply the same as many of the other articles (for example, Art 11 says that each state 'may' tax the income -- i.e. each has the right to tax).

As much as I dislike quoting from IRS publications, Publication 901 states quite explicitly for visiting professors under the India treaty:

"If the individual's visit to the United States exceeds 2 years, the exemption is lost for the entire visit."

[AtlantaTaxExpert]

Okay, then the tax letter is back on.

[The Texas Tax Expert]

ATE, how can a tax letter possibly be required? What more proof do you need?

In essence, you are asking for IRS grace. The taxpayer is over by a few days so you want them to simply not enforce the law. Although that is fine in an individual instance, I would think it would be foolish of the IRS to commit itself to a specific 'grace period.' Moreover, any such 'commitment' you receive in the letter could never be relied upon, which means it is a pointless exercise.

I am increasingly disillusioned with this website.

[AtlantaTaxExpert]

You are probably right about it being a pointless exercise.

And you are also right about the "letter of the law". If the IRS chooses, they could require Spayra to pay the two years worth of taxes if he stays in country past the two-year time.

In the final analysis, however, I just do not think that would happen. The spirit of the law allows for the judicious use of judgement by the IRS in their enforcement of the law. Spayra clearly is NOT attempting to work additional time under the two-year exemption, but rather just needs some extra time to properly tie up some loose ends before leaving the U.S. to return to his home country.

To tell him that he MUST leave prior to 2nd anniversary of his arrival or he will definitely be liable for two years' worth of taxes is just as bad as saying he can stay as long as he wants! Some judgement must be applied with the advice given, or else the website loses its value to the clients who are seeking guidance in a tax system that is totally foreign to them.

[The Texas Tax Expert]

I don't have a problem with you pointing out that the risk of the IRS taking issue with an individual who exceeds the 2 year period by several days/weeks might be quite low.

However, I think it is important that the OP be informed of the treaty requirements and that there is no 'grace period' provided by the treaty. If the OP chooses to take on the risk, that is his call. From our side, however, we need to ensure that we accurately report the legal requirements and not imply a level of certainty that does not exist.

You correctly pointed out in the post above that technically the OP could be held liable for taxes on 2 years' worth of income. That's a big risk for you to expose him to because you 'think' it is unlikely the IRS would enforce it. By all means tell him that you think the risk is low but it is irresponsible not to inform him of the legal situation and the risk (however small) that he might be taking on.

[AtlantaTaxExpert]

TTE:

You bring up some valid points.

For those reasons, I will modify my posts henceforth when I factor in opinion and experience in dealing with the IRS.