General Information

Course Description

Taxation of foreign individuals who are not U.S. residents requires a careful separation between immigration status and federal tax status.

This course develops the application of IRC §7701(b), the Green Card Test, and the Substantial Presence Test, along with exceptions for Exempt Individuals and the Closer Connection Exception through Form 8843 and Form 8840.

The material explains how to classify U.S.-source and foreign-source income under IRC §§861–865, distinguish Effectively Connected Income (ECI) from Fixed, Determinable, Annual, or Periodic Income (FDAP), apply the general 30% withholding rule, prepare Form 1040-NR, Schedule NEC, Schedule OI, and structure Dual-Status tax returns.

The course also covers tax treaties, Form 8833, Form W-8BEN, Form 1042-S, reporting obligations for foreign-owned domestic LLCs, pro forma Form 1120, Form 5472, FBAR, FATCA, audits, CP2000 notices, Sailing Permit procedures, Form 1040-C, Form 2063, and Form W-7 processing through a Certified Acceptance Agent (CAA) or Taxpayer Assistance Center.

Course Objective

Equip participants with the ability to correctly determine the tax residency status of foreign individuals, classify the source and tax treatment of income, prepare international tax returns, and comply with applicable reporting and withholding requirements.

Learning Objectives

• Distinguish immigration status from tax status and correctly apply the Substantial Presence Test.
• Classify income by source and differentiate ECI from FDAP income.
• Prepare Form 1040-NR, Schedule NEC, Schedule OI, and Dual-Status returns.
• Apply tax treaty benefits and complete Form 8833, Form W-8BEN, and Form 1042-S.
• Comply with foreign-owned LLC requirements, Form 5472, FBAR, and FATCA obligations.
• Respond to IRS audits and notices.
• Configure professional tax software and properly assemble filing packages.

Who Should Take This Course

• Enrolled Agents (EAs) who prepare or review international taxpayer returns.
• PTIN holders who serve Nonresident Aliens, students, investors, and foreign owners.
• Tax professionals seeking specialization in Form 1040-NR and Dual-Status returns.
• Tax firms working with foreign-owned single-member LLCs and Form 5472 requirements.
• Preparers with basic knowledge of Form 1040 and general federal income tax principles.

Course Content – 7 Modules

What You Will Achieve

• Correctly determine whether a foreign individual is a Nonresident Alien or Tax Resident.
• Calculate the Substantial Presence Test and identify when Form 8843 or Form 8840 applies.
• Classify income as U.S.-source or foreign-source and as ECI or FDAP.
• Prepare Form 1040-NR, Schedule NEC, and Schedule OI.
• Structure Dual-Status tax returns.
• Apply reduced tax rates through tax treaty provisions.
• Prepare pro forma Form 1120 and Form 5472 filing packages.
• Handle audits, CP2000 notices, and ITIN applications using Form W-7.

Course Materials Included

• Course Book: Nonresident Alien Taxation (NRA)
• IRS Publication 519 — U.S. Tax Guide for Aliens.
• IRS Publication 515 — Withholding of Tax on Nonresident Aliens and Foreign Entities.
• Form 1040-NR, Schedule NEC, and Schedule OI.
• Form W-7, Form 8833, Form 8840, Form 8843, Form 5472, Form W-8BEN, and Form 1042-S.
• Pro forma Form 1120, FinCEN Form 114, Form 8938, Form 1040-C, and Form 2063.
• Practical cases, checklists, and tax treaty materials.
• Applied exercises using Drake Tax, ProSeries, TaxSlayer Pro, and TaxAct Professional.

Assessment

Frequently Asked Questions