Segal, Cohen & Landis, P.C.
Form 1040-NR Filing, Treaty Positions, and FIRPTA Withholding Recovery
IRS tax attorneys — Beverly Hills, CA. National representation.
If you are not a US citizen or Green Card holder but earn income from US sources — wages, rental property, business income, investments, or the sale of US real estate — you may have a US filing obligation on Form 1040-NR. Non-resident taxation runs on rules that differ fundamentally from those that apply to US residents. Income is divided between effectively connected income (ECI), taxed at graduated rates with deductions allowed, and fixed or determinable annual or periodical (FDAP) income, taxed at a flat 30% on the gross amount unless a tax treaty provides a lower rate. Residency itself turns on the substantial presence test, a day-counting formula that catches many foreign nationals by surprise. And foreign sellers of US real estate face FIRPTA withholding of 15% of the gross sales price — frequently far more than the tax actually owed.
At Segal, Cohen & Landis, our attorneys have represented foreign nationals, foreign investors, and dual-status taxpayers for more than 33 years. We prepare Form 1040-NR returns, claim treaty benefits properly, recover excess FIRPTA withholding, and resolve IRS disputes — with every case handled personally by a partner attorney.
How We Help
Our Approach to Non-Resident Alien Tax Attorney
Form 1040-NR Preparation
We prepare US non-resident returns for foreign nationals with US wages, rental real estate, business income, partnership interests, scholarships, and investment income. That includes the elections that matter — such as treating rental real estate income as effectively connected under Section 871(d) so that expenses become deductible — and the schedules and disclosures the IRS expects. Returns reporting wages subject to withholding are due April 15; non-residents without such wages generally have until June 15.
Residency Status and the Substantial Presence Test
US tax residency is a counting exercise: you are treated as a resident if you spend at least 31 days in the US during the current year and 183 weighted days over three years — all of this year's days, one-third of last year's, and one-sixth of the year before that. We analyze your day count, apply the exemptions for students, teachers, and other exempt individuals, assert the closer connection exception on Form 8840 where available, apply treaty tie-breaker rules when two countries claim you, and structure dual-status returns correctly in arrival and departure years.
Tax Treaty Positions
The United States has income tax treaties with more than 60 countries that can reduce or eliminate US tax on dividends, interest, royalties, pensions, and personal services income. Treaty benefits are not automatic — they must be claimed correctly, often with a Form 8833 treaty-based return position disclosure, and supported with the right withholding documentation (Form W-8BEN) given to US payors. We identify every treaty benefit available to you and document the position so it withstands IRS scrutiny.
FIRPTA Withholding on US Real Estate
When a foreign person sells US real property, the buyer generally must withhold 15% of the gross sales price under FIRPTA — regardless of the seller's actual gain. We apply for IRS withholding certificates on Form 8288-B to reduce or eliminate withholding before closing, and we file Form 1040-NR after the sale to recover excess withholding when the actual tax is less than the amount withheld. For many foreign sellers, that refund is substantial.
How It Works
The Resolution Process
Free Consultation
We review your visa and immigration status, your US day counts, your income sources, and any prior US filings to map your actual obligations — and your opportunities.
Residency Determination
We apply the substantial presence test, the closer connection exception, and treaty tie-breaker rules to establish whether you are a non-resident, a resident, or a dual-status taxpayer for each year at issue.
Income and Treaty Analysis
We classify each income item as ECI or FDAP, evaluate available elections, and identify treaty provisions that reduce your US tax — with the documentation to support each position.
Return Preparation and Filing
We prepare and file Form 1040-NR with all required attachments — Form 8833 treaty disclosures, Form 8840, and an ITIN application on Form W-7 where you do not yet have a taxpayer identification number.
Withholding Recovery and IRS Resolution
We pursue FIRPTA refunds and withholding certificates, respond to IRS notices, and represent you in any examination or dispute that follows.
Ready to Resolve Your Tax Problem?
Our attorneys have helped thousands of clients resolve IRS matters. Your consultation is free and confidential.
Common Questions
Frequently Asked Questions
Who must file Form 1040-NR?+
A non-resident alien who was engaged in a US trade or business during the year, or who has US-source income on which the tax was not fully satisfied by withholding at the source. Filing is also how non-residents claim refunds of excess withholding — including FIRPTA withholding on real estate sales — and how certain treaty positions are reported.
What is the substantial presence test?+
You are treated as a US tax resident if you are physically present in the US at least 31 days in the current year and at least 183 days under a weighted three-year formula: all days this year, plus one-third of days last year, plus one-sixth of days the year before. Meeting the test means you are taxed on worldwide income like a US resident — unless an exception or treaty tie-breaker applies.
What is the difference between ECI and FDAP income?+
Effectively connected income (ECI) — income from a US trade or business, including wages — is taxed at the same graduated rates that apply to US residents, with deductions allowed. FDAP income — passive items such as dividends, interest, rents, and royalties — is taxed at a flat 30% on the gross amount with no deductions, collected by withholding at the source, unless a treaty reduces the rate.
How does FIRPTA work when a foreign person sells US real estate?+
The buyer must generally withhold 15% of the gross sales price and remit it to the IRS on Forms 8288 and 8288-A. A reduced 10% rate applies to homes the buyer will use as a residence priced between $300,001 and $1,000,000, and no withholding is required at $300,000 or less with buyer-residence use. Because withholding is computed on price rather than gain, it often exceeds the real tax — a Form 8288-B withholding certificate or a 1040-NR refund claim recovers the difference.
Can a tax treaty reduce my US tax?+
Often, yes. US treaties commonly cut the 30% FDAP rate on dividends, interest, and royalties — in some cases to zero — and can exempt pensions, students' income, and short-term work assignments. Treaty-based positions generally must be disclosed on Form 8833, and US payors need a valid Form W-8BEN on file to apply the lower rate at the source.
What is a dual-status tax year?+
The year you arrive in or depart from the US, during which you are a resident for part of the year and a non-resident for the rest. Dual-status returns follow restrictive rules — no standard deduction and, generally, no joint filing — though elections are available for taxpayers married to a US citizen or resident. Getting the start and end dates of residency right can change the outcome significantly.
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Segal, Cohen & Landis, P.C.
9100 Wilshire Boulevard, 601 East Tower, Beverly Hills, CA 90212
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