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    mauriliopannella's Avatar
    mauriliopannella Posts: 2, Reputation: 1
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    #1

    Oct 19, 2007, 03:40 PM
    USA-Italy tax treaty applicabilty
    Hello,
    I have a question about the taxes exemption under international agreements between USA and Italy for non-resident aliens.

    I am in US since a few weeks under J-1 VISA. I am here as a post-doc researcher. The tax office of the institute says I cannot apply to any tax exemption because the institute falls under OMB A-133 (i.e. " Non Profit Organizations") and not OMB A-21 (i.e. educational institutions) for which the treaty applies. Does this make any sense ? Not me, really.

    Any suggestions ?

    Thanks in advance.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    Oct 20, 2007, 05:17 PM
    Unfortunately, after review IRS Pub 901 (Page 16), I tend to agree with the institute's tax office.

    The citation from the pub notes that the research must be done at a university, college, school or other educational institution.
    The Texas Tax Expert's Avatar
    The Texas Tax Expert Posts: 310, Reputation: 7
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    #3

    Oct 20, 2007, 05:31 PM
    Are you at a medical or educational institution?
    mauriliopannella's Avatar
    mauriliopannella Posts: 2, Reputation: 1
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    #4

    Oct 21, 2007, 12:15 PM
    No It is not a medical institution. I thought it was an educational one but they say it is not. They said it is a non-profit institution. Now this is an institute where astronomical research is carried on for public use and not for military or private interests, so of course it has to do with education (there are PhD students there inside and post-doctoral scholars like I am).
    Also, a similar institute, the STScI in Baltimore (this is the institute that operates the Hubble Space Telescope) which is not a college, a university or a medical institution as far as I know, accept for all european post-docs the tax-treaty exemption. Is there any problem ?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #5

    Oct 22, 2007, 09:38 AM
    In my opinion, if the institute itself says that it is NOT an educational institution, you would have a REAL hard time convincing the IRS that it is.

    For this reason, I believe you are stuck with their interpretation and therefore NOT eligible for the tax exemption.
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