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IRS Posts FAQs for Sick Foreigners Claiming U.S. Tax Exception

May 27, 2020, 9:47 PM

The IRS has issued tax relief guidance for visiting foreigners who became sick with coronavirus and had to stay longer than expected in the U.S.

Non-U.S. citizens can be taxed as U.S. residents in some circumstances, including if they meet the “substantial presence test” under tax code Section 7701(b). That means they’ve reached a specific threshold of days for being physically present in the country. Foreigners can dodge this outcome if they qualify for exceptions; the medical condition exception, for example, applies in situations where an individual intended to leave but was prevented from doing so because of a medical issue that arose in the U.S.

The IRS said in FAQs posted to its website Wednesday that it understood non-citizens might have difficulty meeting certain requirements for claiming the medical exception during the coronavirus pandemic, such as obtaining signed statements from physicians or other medical professionals.

“In lieu of a physician’s statement, alien individuals claiming the 30-day medical condition should retain documentary evidence that substantiates their medical condition, their inability to leave due to the medical condition, and the period of the medical condition,” the agency said. This includes emails or other proof of exchanges with health care providers, receipts stemming from healthcare purchases, evidence of canceled or changed travel reservations, and official medical records.

The agency FAQs also offered general instructions for accessing the exception, including guidance on claiming it more than once.

To contact the reporter on this story: Allyson Versprille in Washington at aversprille@bloombergtax.com

To contact the editors responsible for this story: Patrick Ambrosio at pambrosio@bloombergtax.com; David Jolly at djolly@bloombergtax.com

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