Nonresident Alien Spouse Not Liable for Penalties


There are an unknown number of U.S. citizens married to nonresident aliens. Many of these taxpayers have filed joint income tax returns. Most are likely to have filed joint income tax returns (Form 1040) without having properly made and filed the election required under IRC section 6013(g). The consequences of not properly making a section 6013(g) election can be beneficial, however.

Section 6013(g) allows a nonresident alien individual who is married to a citizen or resident of the United States to elect to be treated as a resident of the United States for purposes of chapter 1 and 24 of the Internal Revenue Code. Sec. 6013(g)(1) and (2). The regulations require the nonresident alien and his spouse to make the election by attaching a statement to a joint return for the first taxable year for which the election is to be in effect. Treas. Reg.§1.6013-6(a)(4)(i). The statement must contain a declaration that the election is being made and that the requirements of Treas. Reg. §1.6013-6(a)(1) are met for the taxable year, it must contain the name, address, and TIN of each spouse, and it must be signed by both persons making the election. Treas. Reg.§1.6013-6(a)(4)(ii). Failure to make such an election renders section 6013(g) inoperative

The consequences of an invalid election are that penalties cannot be asses against the nonresident alien for failure to file information returns like Form 3520 Report of Foreign Gift Devise or Bequest, Form 3520-A Annual Return of Foreign Trust, Form 5471, Return of Controlled Foreign Corporation,

Accoring to a recent Chief Counsel Advisory “Because the nonresident alien and his spouse did not make a proper election, section 6013(g) is inoperative and does not affect the taxpayer’s status as a nonresident alien for purposes of chapters 1 and 24 of the Internal Revenue Code. Although section 6048 is under jurisdiction, it is our understanding that a nonresident alien is not subject to section 6048 reporting requirements. See Treas. Reg.§§ 16.3-1, 404.6048-1?

What this may well mean is that FBAR penalties may also not be assessable where the account is in the name of the nonresident alien and the taxpayers filed a joint return without making a valid section 6013(g) election. This could be an important defense in future FBAR litigation, both civil and criminal.


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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sanford Millar, Law Offices of Sanford I. Millar | Attorney Advertising

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Sanford Millar
Law Offices of Sanford I. Millar

Experience and Qualifications: Over 30 years of experience in domestic and international tax... View Profile »

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