Visa Holders Living in the US for Under 183 Days May Avoid Most Taxes (Closer Connection Exception)

www.goldinglaw...
Closer Connection Exception to the Substantial Presence Test: The U.S. follows a worldwide taxation model. That means the U.S. government taxes U.S. persons on their worldwide income. Foreign nationals who reside in the U.S. and are neither permanent residents nor U.S. citizens may still be subject to worldwide tax and reporting when they meet the IRS substantial presence test. But, if the person qualifies for the closer connection exception, they may avoid the worldwide taxation rules.
U.S. person "individuals" are generally broken down into four (4) main categories:
-U.S. Citizen
-Legal Permanent Resident
-Foreign National who meets the Substantial Presence Test
-Former U.S. Person who did not expatriate correctly.
The third category above is the category impacted by the closer connection exception to the substantial presence test.
And, with the IRS taking an aggressive position on issues involving foreign accounts compliance and unreported offshore income, compliance is crucial in order to avoid fines and penalties.