How Can The IRS Enforce Tax Rules On Non – Residents?
Question: Your comments about the new tax rules on expatriates (9/96, Page 3) doesnt make sense to me. If someone decides to leave the U.S., how can the IRS enforce these rules? Why cant someone just take their money and leave if they want to do that? (P.G., New Jersey) Reply: The expatriate tax rules basically apply to U. S. Source Income. That means income earned in the U.S, or income and gains from assets that are located in the U.S. To ensure that the taxes are paid, the tax code includes an assortment of provisions that require the U.S. payor to withhold taxes on amounts that are payable to non-residents. If a U.S. payor fails to do that, the U.S. person or business can be subject to some draconian penalties. No U.S. person or company would intentionally fail to withhold except when they are not aware of these rules. In most cases, the withholding will exceed the amount of taxes due so the non-resident must file a return to get a refund of any over withholding. In extreme cases, t
