Instructions for Form. NR-EZ. U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents. Section references are to. RINR. Rhode Island Nonresident Individual Income Tax Return. RI- NR. RI Schedule EIC. RI Schedule OT. RI RI Schedule FT. RINR. Name(s) shown on Form RINR. Your Social Security Number. RI SCHEDULE V PART-YEAR RESIDENT TAX CALCULATION.
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Form nr-ez instructions crosstour – AP Accademia
This report has cleared the Treasury Inspector General for Tax Administration disclosure review process and information determined to be restricted from public release has been redacted from this document. Final Report issued on September 15, Highlights of Reference Number: Control weaknesses in the processing of refunds issued to nonresident aliens could result in significant revenue losses to the United States U. The probability of recovering fraudulent refunds from nonresidents living outside the U.
The objective of this audit was to review the processing of U. Nonresident Alien Income Tax Returns Form NR and determine whether controls are in place to ensure taxpayers receiving refunds are entitled to those refunds. Although a statistical sample of Tax Year returns indicated that control weaknesses discussed in this report had not been exploited to a significant extent, a judgmental sample of Tax Year and returns revealed significant control weaknesses in the processing of refunds claimed on Forms NR.
If the Internal Revenue Service IRS does not take immediate steps to address these control weaknesses, the problem could increase significantly. TIGTA also found that tax treaty provisions regarding the taxability of gambling income are not being applied consistently by the IRS, and that clarification is needed regarding the designation of certain income earned through U. TIGTA recommended that the Commissioner, Large and Mid-Size Business Division, ensure that plans, developed during the course of this audit to address control weaknesses discussed in this report, are implemented.
The Commissioner should also use the Foreign Country Codes on Forms NR to systemically verify the correct rate of tax is applied according to the applicable tax treaty and should work with the Forms and Publications function to clarify instructions on what constitutes U.
In their response to the report, IRS officials agreed with the recommendations and are taking appropriate corrective actions. Deputy Inspector General for Audit. This report presents the results of our audit to review the processing of U. Copies of this report 210 also being sent to the Internal Revenue Service managers affected by the report recommendations. Please contact me at if you have questions or Michael E. Recommendations 1 and 2: Recommendations 5 and 6: Appendix IV — Outcome Measures.
Individual Taxpayer Identification Number. Individuals who are nonresident aliens of the United States U. This income is also subject to income tax 1040nf. Nonresident 20110 also file Form NR to request refunds of amounts over withheld. In some cases, the nonresident involved owes no taxes because the income was paid by 1040nd corporation based in the U.
In those cases, the nonresident must file a Form NR to claim a refund of the amounts withheld. We initiated 1040nrr review as a result of another audit  in which we identified claims for refunds of withheld amounts on Forms NR that appeared to be questionable based on the associated tax withholding documents, Forms S. We conducted this performance audit in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objective. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objective.
Detailed information on our audit objective, scope, and methodology is presented in 1040nd I. Major contributors to the report are listed in Appendix II. As long as proper controls are not in place, the risk of fraudulent returns and refunds is substantial.
This judgmental sample included return characteristics which we deemed 1040nf be of high risk. From our statistical sample of TY returns, there did not appear to be a significant percentage of returns which exploited the control weaknesses detailed in this report.
However, from our judgmental sample of TY and TY returns, we identified significant 104nr weaknesses in the processing of refunds claimed on Forms NR. The control weaknesses referred to in this 10400nr were all identified in our judgmental sample. In general, casinos are required to withhold 30 percent on the winnings from gambling and issue a Form S at the time the winnings are paid to nonresident aliens.
When these individuals file their tax returns, they could have tens or even hundreds of Forms S to attach to their returns. Businesses who withhold income taxes from income paid 210 nonresidents are required to remit the amounts withheld to the IRS and report the amounts withheld to the IRS and to the nonresident, generally on Forms S. This process identifies certain questionable items but it is not designed to identify all questionable refunds.
IRS actions to address control weaknesses. During this audit, we discussed these control weaknesses with the IRS and it is working on actions to address them. These actions include the following: If the IRS does not take immediate steps to address these control weaknesses, the problem could 1004nr substantially if more unscrupulous individuals learn of the control weaknesses.
Notwithstanding these actions, additional steps are necessary to ensure that questionable refunds claimed on Forms NR are identified and stopped 1040ne to issuance. None of the issues discussed previously in this report appeared in our statistical sample of TY returns.
This indicates that the occurrence of these questionable or fraudulent refunds is not yet widespread. However, the questionable refund amounts in the cases that we identified in our judgmental sample appear to be very high.
The Commissioner, Large and Mid-Size Business Division, should ensure that plans, developed during the course of our audit to address the control weaknesses discussed in this report, are implemented to: IRS management stated that all the actions described above are in process. IRS management agreed with this recommendation. Based on their analysis of cases provided by the Treasury Inspector General 1040mr Tax Administration, a Unified Work Request will be submitted by January 15,to add a document identification number as an additional validation criteria.
Since the requested action will be subject to funding and 1040nrr prioritization by the Modernization and Information Technology Services organization, submission of the Unified Work Request will complete the corrective action. The Commissioner, Large and Mid-Size Business Division, 140nr determine whether it would be feasible to require payers issuing multiple Forms S to issue a single summary Form S at the end of the calendar year to simplify reporting for the U.
A team with members from the Large and Mid-Size Business Division International function, Chief Counsel, and other appropriate functions will be formed to consider the feasibility of requiring payers issuing multiple Forms S to issue a single summary Form S. The team will issue a report that outlines either the actions needed to implement this requirement, or the reasons why it is not feasible and alternative actions to minimize the risks to the Government and minimize taxpayer burden.
From the judgmental sample previously identified, we determined that claims for the refund of amounts withheld on gambling winnings are being processed inconsistently. There are a number of tax treaties between the U.
For 20100, Japanese citizens are not required to pay tax on U. The treaties 10440nr also dictate how the winnings are to be taxed. Canadian citizens can deduct gambling losses from their winnings, but only to the extent of their winnings. We found that personnel at the Austin Submission Processing Center are not consistently applying these tax treaties when processing Forms NR.
IRS guidance requires that nonresident aliens filing Form 1040hr indicate their country of 1040ne. The IRS should use the Foreign Country Code to perform validity checks on key Form NR data to ensure that the proper amount of tax is collected according to the applicable treaty.
The Commissioner, Large and Mid-Size Business Division, should use the Foreign Country Codes on Form NR to systemically verify the amounts on Form NR, where possible, to ensure that the correct rate of tax has been applied according to the applicable tax treaty.
As part of the E-trak withholding database, an automated internal consistency check of issued Forms S is being instituted, Foreign Country Codes will be used.
In addition, income codes, exemption codes, withholding percent, and potentially other fields from the Form S will be used. The Collection function will assist with this effort.
Form 1040nr-ez instructions 2010 crosstour
Once the assessments are determined, 1040jr IRS will take appropriate actions to recover the refunds. Work with the Tax Forms and Publications function to clarify instructions on what constitutes U.
Detailed Objective, Scope, and Methodology. The overall objective of this audit was to review the processing of U. To accomplish this objective, we: Government Accountability Office audit reports.
Interviewed responsible IRS management personnel. Determined what controls are in place to ensure wage, withholding, and refund information on Forms NR is accurate.
Obtained access to and analyzed the IRS Form S database also referred to as Chapter Three Withholding or CTW to determine its usability in matching wage and withholding information submitted from employers to tax return information claimed by taxpayers on their Form NR returns. We validated the accuracy and completeness of the data received by comparing 30 records to IRS IMF data for each tax year.
Reviewed the judgmental sample to identify any questionable claims or refunds. We considered the following in identifying these returns: Forms S that contain information that appears to be fabricated, incomplete, or questionable. Forms S that contain withholding amounts that appear unreasonable or inaccurate. Wage and withholding amounts claimed on the Forms NR that do not match the amounts provided on the Forms S.
D by asking the employer to validate the information provided. Determined whether the proper amounts of wages, withholding, and refunds are claimed by taxpayers on Forms NR. Reviewed the statistical sample to determine if any of the returns appeared to be fraudulent.
We included the following tests: Matched the total withholding amounts claimed on the return to the amounts claimed on the individual Forms S and noted any discrepancies. Internal controls include the processes and procedures for planning, organizing, directing, and controlling program operations.
They include the systems for measuring, reporting, and monitoring program performance. We determined the following internal controls were relevant to our audit objective: IRS policies, procedures, and practices related to the identification of erroneous claims for refunds claimed in Forms NR. Major Contributors to This Report. Larry Madsen, Audit Manager. Richard Hillelson, Information Technology Specialist. Office of the Commissioner — Attn: This appendix presents detailed information on the measurable impact that our recommended corrective actions will have on tax administration.
These outcome measures are based on specific cases identified through our judgmental samples and are not projected to the overall population of Forms NR.