26 CFR 1.1441-1 Requirement for the deduction and withholding of tax on payments to foreign persons. (c ) Definitions (3) Individual. (i) Alien individual. The term alien individual means an individual who is not a citizen or a national of the United States. See Sec. 1.1-1(c). (ii) Nonresident alien individual. The term nonresident alien individual means a person described in section 7701(b)(1)(B), an alien individual who is a resident of a foreign country under the residence article of an income tax treaty and Sec. 301.7701(b)-7(a)(1) of this chapter, or an alien individual who is a resident of Puerto Rico, Guam, the Commonwealth of Northern Mariana Islands, the U.S. Virgin Islands, or American Samoa as determined under Sec. 301.7701(b)-1(d) of this chapter. An alien individual who has made an election under section 6013 (g) or (h) to be treated as a resident of the United States is nevertheless treated as a nonresident alien individual for purposes of withholding under chapter 3 of the Code and the regulations thereunder. The above definition ought to raise some BIG red flags! First of all, if you live in the [federal] United States** as a natural person, you aren’t an “individual” because the definition of “individual” doesn’t include citizens or residents of the United States**! This is the ONLY definition of the term “individual” found ANYWHERE in either the Internal Revenue Code or the 26 CFR Regulations. Therefore, the tax code can’t apply to you even if you claim to be a U.S.** citizen or a U.S.** resident! This is also consistent with our findings earlier. It also explains why a U.S. citizen is defined as someone who lives in the Virgin Islands, Guam, Puerto Rico, or American Samoa, as follows:
Posted on: Thu, 24 Apr 2014 01:51:42 +0000
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