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CLOSER CONNECTION STATEMENTS TO BE KEPT WITH FILER'S RECORDS

 DENVER, Sept. 13 /PRNewswire/ -- Canadians and other foreign visitors who stay in the United States for extended periods may be considered "residents" for U.S. tax purposes. Some, however, may qualify for an exception if they can establish that they had a "closer connection" to another country.
 The Internal Revenue Service said that the agency has received thousands of closer connection statements at its Service Center in Philadelphia. Each statement will be "certified received" at the Center and returned to the filer with instructions to retain the statement since it represents the only proof the filer has complied with the requirement.
 The notice to the filer goes on to explain that there may be a need for further documentation of the closer connection and verification of information provided in order to support the claim. This would be the case in the event of a future IRS inquiry or examination.
 Under U.S. law, an individual is considered a resident if he or she has been present in the United States for more than 30 days in the current year and for at least 183 days during a three year period that includes the current year and the previous two years. For this purpose, each day of the current year is counted as a full day, while each day of presence for the first preceding year is counted as one-third of a day, and in the second preceding year, as one-sixth of a day.
 For example, an alien who is in the United States for 122 days during each year of a three-year period (122 plus 41 plus 20) generally will be considered to have met the "substantial presence test" for purpose of establishing United States residency. The 122 days do not have to be consecutive.
 However, an individual who meets the substantial presence test, but is present in the United States for fewer than 183 days during the current year, will not be treated as a resident if he or she has a tax home in a foreign country and a closer connection to that foreign country than to the United States during the current year. A tax home is generally considered to be located at the individual's regular or principal place of business, or regular place of abode, if the individual has no such business.
 To be considered for the closer connection exception, the individual must attach a statement to his or her income tax return and file it with the Internal Revenue Service Center, Philadelphia, PA 19255. If no return is required, the statement must be filed on or before the due date for filing an income tax return generally June 15.
 A closer connection statement must be filed for each year for which the exception is claimed. Statements filed after the due date may still be considered valid if the individual can show, by clear and convincing evidence, that he or she took reasonable actions to become aware of the filing requirement and took significant affirmative steps to comply with it.
 The IRS is developing a standard form that may be used to comply with the closer connection requirements. The new form is expected to be available from IRS Forms Distribution Centers in time for use next filing period.
 For further information, including guidance for preparing a closer connection statement, obtain a copy of Publication 519, "U.S. Tax Guidance for Aliens." IRS forms and publications are available by calling 800-829-3676, within the United States, or by writing to the Internal Revenue Service Distribution Center, P.O. Box 85074, Richmond, VA 23261-5074 USA.
 -0- 9/13/93
 /CONTACT: Rosemary Campbell of the Internal Revenue Service, 303-446-1650/


CO: Internal Revenue Service ST: Colorado, Pennsylvania IN: SU:

BB -- DV006 -- 1449 09/13/93 16:19 EDT
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Publication:PR Newswire
Date:Sep 13, 1993
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