Form 2555 and Form 8833

nanic · Post by **nanic** » Sat Apr 07, 2018 8:13 am

So I filed my 2017 1040 along with form 8833 claiming at treaty exemption for my and my wife gross employment income as per article XIX of the Canada-US tax treaty. We are dual citizens and both work for the Federal government. Therefore I had no employment income to report on the 1040. I just received a letter from the IRS asking me to fill out form 2555 saying they need more info. Never need it in the past. The only difference this year is I filled using the IRS Free file.

Doesn't form 8833 supersede form 2555?

nelsona · Post by **nelsona** » Sat Apr 07, 2018 8:25 am

Of course
They probably looked at your exempted income and mistook it for FEIE.

Write them and reiterate your Government Services treaty exemption.

nanic · Post by **nanic** » Sat Apr 07, 2018 11:13 am

Thanks Nelsona. Since I used IRS free file, I wonder if they even saw my form 8833. The only other reason for the form 2555 would be for the presence test. I am getting a Refundable American opportunity credit for my kids tuition I paid.

I will reply to the form letter with a copy of my Form 8833 and confirm that all of my income is exempt as per Treaty.

nanic · Post by **nanic** » Sat Apr 07, 2018 11:16 am

One more thing. I never indicated on my 1040 my gross income. I just attached form 8833. However as I said, when I e-filed last year with TAXACT never had an issue.

nelsona · Post by **nelsona** » Sat Apr 07, 2018 11:49 am

Well, only your wages are exempt. You still have to report all other income.

Why would taxact let you file an incomplete return last year? Or did you indicate your gross income was zero?

There is no presence test for US citizens, unless you file 2555. So don't bother with that.

nanic · Post by **nanic** » Sat Apr 07, 2018 5:08 pm

Yes I indicated my gross income on form 8833 and indicated it was exempt as per treaty. However I did not indicate it on the 1040. Should I have put it on the 1040 and put a negative on another line? The only other income is within my RRSP.

nelsona · Post by **nelsona** » Sat Apr 07, 2018 7:06 pm

No other income? Really?

That may be why IRS questioned. That would seem pretty unusual to IRS.

nanic · Post by **nanic** » Sun Apr 08, 2018 8:22 am

Yes really. As I said, I have income in my RRSP, but that is not declared. Working-full time for government. Paying bills. No money left.

Anyway thanks for your help. Much appreciated.