Just a short note to let people know that we haven't been affected by the most recent fires in southern Californian. Though they were much closer than last year the winds directed them away from our place.
Given their regular recurrence it is easy to be motivated to have emergency plans in place. We discuss them a few times a year with the children and have already organised many things that will be of great help if we are ever in a difficult situation.
Tuesday 18 November 2008
Sunday 9 November 2008
ITIN, you TIN, no TIN
As mentioned previously, one of the main aspects of moving internationally is becoming a part of, and learning new systems. Inevitably, one will encounter the tax system and figuring this one out can be a major achievement. Australian, Dutch and German tax systems were, for me, relatively straightforward. I have pretty simple financial affairs and have always completed and filed my own tax return. In the Netherlands, as in Australia, you can download a computer program (the Dutch have one for Linux, Mac and Windows) which asks you a series of questions, has you report certain numbers and then lets you submit it electronically, usually with a refund showing up in your bank account a few weeks to a month later. Even with my limited Dutch, I needed little help in completing it.
The US seem to have taken a different route, or not travelled there yet. When tax return time rolled around in April, and after looking through a bit of tax documentation, I determined that I needed professional help. I picked the name of a well-known tax agent organisation and gave them a call but because of my immigration status (non-immigrant alien) the average agent couldn't help me and so I was eventually passed onto someone who could prepare my particular tax return form (a 1040NR). Since only I have a US Social Security number and in order to claim Gaynor and the children as dependants, we had to apply for Individual Tax Identification Numbers (ITIN, usually said 'I-TIN') for each of them.
1st application: Rejected due to uncertified proof-of-identity documentation. Needed to reply within 45 days.
* Certification of documentation not so straightforward since Californian public notaries cannot certify copies of documents. Eventually worked around this by having a public notary certify (and receive an oath) of my own affidavit that they are true copies. This appears to be acceptable to the IRS. I think they just care for the stamp. :)
* Before figuring out the workaround with the public notaries, I waited two hours in an IRS office in Laguna Niguel so that they could sight the documentation, thus circumventing the need for a public notary who could not certify document copies. Result: man at the counter told me he didn't know if I was even allowed to apply for ITINs and it was my responsibility to go find out.
* Spoke to the IRS who told me I couldn't get an extension to the 45 days but as long as it was postmarked within that time that it would be acceptable.
* Resubmitted with certified documentation, with letter sent certified mail and postmarked within the 45 day time limit (just).
* Received a letter shortly after stating that I had failed to respond within 45 days and that my return would be sent forward for processing.
2nd application: Spoke with IRS about the 45-day-limit rejection letter. They suggested that the postmark had been ignored and that I should resubmit:.
* I prepare a new submission -- knowing now how to get a public notary to 'certify' the documentation -- but before I send that in (it takes me a few weeks to get everything done) I receive another letter stating that the 1st application has been rejected due to an unknown visa type.
* Letter didn't actually state that it was an unknown visa type -- I found that out after calling the IRS to discuss the letter. Apparently the E3 visa isn't on their books. In all fairness, it has only been around for 3 years.
* IRS suggested that I resubmit the application but leave the visa information part of the form blank. The idea being that the visa information of Gaynor and the children was not needed to establish identity or eligibility to be in the country, only mine mattered.
* 2nd application aborted.
3rd application: Resubmitted all forms and 'certified' documentation for Gaynor and the children, leaving their visa information blank, as suggested. Essentially, this is a completely new application.
* A few weeks later, received rejection notices saying that the application was outside the 45 day time limit and that the tax return would be sent forward for processing.
* Spoke with the IRS who had no real better suggestion than to tell us to make a new application. Could not answer my simple question of "And why would it be treated any differently this time?"
* Thinking I could get to the root of the problem and speak to the IRS Unit who actually handled the applications, I was told by the representative that there was no phone number I could contact them on. And the representative could only guess at the reasons based on the limited information they had access to.
* One IRS representative -- who was the first one who had ever apologised for the difficulties -- asked to speak with Gaynor, who is actually one of the submitters. After explaining most of the above history, Gaynor was put through to the legal department to ascertain her eligibility to actually apply for the ITIN. After speaking with legal, who confirmed her eligibility, she was put through to a representative who was going to make a note on her record so that when we personally went to the IRS to apply we wouldn't be rejected based on the employee there not knowing so much. This final representative then informed Gaynor, when she finally got through, that she (the representative) had no way of knowing that Gaynor had just spoken with legal and could not make any such note.
* A week or so later I received a letter from the IRS stating that I owe them approximately $410 in taxes.
Current status: Have not paid the claimed taxes yet. I distrust the ability of the IRS to return it when the ITINs are finally assigned. Not even sure the IRS can sort out the ITINs :) In what we hope is the last resort, Gaynor and I are planning to visit an IRS office together and make the application personally. Hope springs eternal.
I used to think that Americans didn't like paying taxes and hated the IRS for that reason. Now I'm more of the opinion that they hate paying taxes and hate the IRS because they are incompetent. I used to think that Americans, like most people, decried an increase in taxes but, having personally lived in countries with higher tax rates, I just thought they didn't understand that generally one received more services for those tax dollars (or euros). Now I'm of the opinion that they don't want to hand over more tax dollars because their incompetent bureaucracies have wasted what they already have, so why would you give them more?
These may be harsh opinions -- and they may change as we live here longer -- but I actually feel like we had less difficulties with German bureaucracy (even when done via the Dutch system) than we have had here.
The US seem to have taken a different route, or not travelled there yet. When tax return time rolled around in April, and after looking through a bit of tax documentation, I determined that I needed professional help. I picked the name of a well-known tax agent organisation and gave them a call but because of my immigration status (non-immigrant alien) the average agent couldn't help me and so I was eventually passed onto someone who could prepare my particular tax return form (a 1040NR). Since only I have a US Social Security number and in order to claim Gaynor and the children as dependants, we had to apply for Individual Tax Identification Numbers (ITIN, usually said 'I-TIN') for each of them.
1st application: Rejected due to uncertified proof-of-identity documentation. Needed to reply within 45 days.
* Certification of documentation not so straightforward since Californian public notaries cannot certify copies of documents. Eventually worked around this by having a public notary certify (and receive an oath) of my own affidavit that they are true copies. This appears to be acceptable to the IRS. I think they just care for the stamp. :)
* Before figuring out the workaround with the public notaries, I waited two hours in an IRS office in Laguna Niguel so that they could sight the documentation, thus circumventing the need for a public notary who could not certify document copies. Result: man at the counter told me he didn't know if I was even allowed to apply for ITINs and it was my responsibility to go find out.
* Spoke to the IRS who told me I couldn't get an extension to the 45 days but as long as it was postmarked within that time that it would be acceptable.
* Resubmitted with certified documentation, with letter sent certified mail and postmarked within the 45 day time limit (just).
* Received a letter shortly after stating that I had failed to respond within 45 days and that my return would be sent forward for processing.
2nd application: Spoke with IRS about the 45-day-limit rejection letter. They suggested that the postmark had been ignored and that I should resubmit:.
* I prepare a new submission -- knowing now how to get a public notary to 'certify' the documentation -- but before I send that in (it takes me a few weeks to get everything done) I receive another letter stating that the 1st application has been rejected due to an unknown visa type.
* Letter didn't actually state that it was an unknown visa type -- I found that out after calling the IRS to discuss the letter. Apparently the E3 visa isn't on their books. In all fairness, it has only been around for 3 years.
* IRS suggested that I resubmit the application but leave the visa information part of the form blank. The idea being that the visa information of Gaynor and the children was not needed to establish identity or eligibility to be in the country, only mine mattered.
* 2nd application aborted.
3rd application: Resubmitted all forms and 'certified' documentation for Gaynor and the children, leaving their visa information blank, as suggested. Essentially, this is a completely new application.
* A few weeks later, received rejection notices saying that the application was outside the 45 day time limit and that the tax return would be sent forward for processing.
* Spoke with the IRS who had no real better suggestion than to tell us to make a new application. Could not answer my simple question of "And why would it be treated any differently this time?"
* Thinking I could get to the root of the problem and speak to the IRS Unit who actually handled the applications, I was told by the representative that there was no phone number I could contact them on. And the representative could only guess at the reasons based on the limited information they had access to.
* One IRS representative -- who was the first one who had ever apologised for the difficulties -- asked to speak with Gaynor, who is actually one of the submitters. After explaining most of the above history, Gaynor was put through to the legal department to ascertain her eligibility to actually apply for the ITIN. After speaking with legal, who confirmed her eligibility, she was put through to a representative who was going to make a note on her record so that when we personally went to the IRS to apply we wouldn't be rejected based on the employee there not knowing so much. This final representative then informed Gaynor, when she finally got through, that she (the representative) had no way of knowing that Gaynor had just spoken with legal and could not make any such note.
* A week or so later I received a letter from the IRS stating that I owe them approximately $410 in taxes.
Current status: Have not paid the claimed taxes yet. I distrust the ability of the IRS to return it when the ITINs are finally assigned. Not even sure the IRS can sort out the ITINs :) In what we hope is the last resort, Gaynor and I are planning to visit an IRS office together and make the application personally. Hope springs eternal.
I used to think that Americans didn't like paying taxes and hated the IRS for that reason. Now I'm more of the opinion that they hate paying taxes and hate the IRS because they are incompetent. I used to think that Americans, like most people, decried an increase in taxes but, having personally lived in countries with higher tax rates, I just thought they didn't understand that generally one received more services for those tax dollars (or euros). Now I'm of the opinion that they don't want to hand over more tax dollars because their incompetent bureaucracies have wasted what they already have, so why would you give them more?
These may be harsh opinions -- and they may change as we live here longer -- but I actually feel like we had less difficulties with German bureaucracy (even when done via the Dutch system) than we have had here.
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