"FEIE (Form 2555) is available for citizens and resident aliens"
Your acct was incorrect.
FEIE is only available to a "qualified individual", which is either
(a) a US citizen who was a bona fide resident of a foreign country
or
(b) a US citizen or resident who was present in a foreign country for at least 330 days during a 12 month period.
IRS has held that, in a first year, even when the election to file as a resident is made, one is a US resident only for that year, this can only count days of physical presence in the foreign country for that year.
So a person electing to file full-year, arriving on say May 1st, can only count 120 days of foreign physical presence, since in the previous year, they were not a US resident, and thus not "qualified" to count the days in that previous year.
It is the ability to count days from the previous year that is achieved with the german treaty (no more burdensome) clause, thus FEIE is the sole reason to need this position.
You, rhollan, probably didn't even need this, since you had been a US resident for a portion of the previous year, thus could elect to be resident the entire year (an option available to anyone).
It is newcomers to US, electing to file full-year, and who wish to FEIE which need the double-treaty position.
The relevant cases are Turner vs. US.
As a side note Rev Ruling 91-58, may even remove all this necessity, granting the right to FEIE because a US citzen can, that is broadening the scope of XXV(1) of the US/UK treaty, and thus the similarly worded Cdn treaty.
<i>nelsona non grata</i>
Nelson - need your help
Moderator: Mark T Serbinski CA CPA
"I was not a resident long enough the previous year."
The IRS rules clearly state that if you were resident in one year year and are resident even one day the next, you can choose your to be resident full-year (ie. you have to make an election NOT to be viewed as full-year resident).
Since you were a US resident in 2002, you could automatically file for full year in 2004, even if you left Jan 2nd, 2004. I suspect you even made that election to cut short your 2003 US tax year. If you did, this may be is irrevocable, and may put the nix to what you later tried.
<i>nelsona non grata</i>
And I love when you say your acct will be on the hook for any fines. Fat chance.
\Not that you would be fined, just denied.
The IRS rules clearly state that if you were resident in one year year and are resident even one day the next, you can choose your to be resident full-year (ie. you have to make an election NOT to be viewed as full-year resident).
Since you were a US resident in 2002, you could automatically file for full year in 2004, even if you left Jan 2nd, 2004. I suspect you even made that election to cut short your 2003 US tax year. If you did, this may be is irrevocable, and may put the nix to what you later tried.
<i>nelsona non grata</i>
And I love when you say your acct will be on the hook for any fines. Fat chance.
\Not that you would be fined, just denied.