When Can the IRS, NY, or NJ Tax the Worldwide Income of Resident or Nonresident Aliens?

Abstract

On May 21, 2018, the Internal Revenue Service (“IRS” or “Service”) announced new campaigns which include issues regarding residency. Those campaigns include a Nonresident Alien (NRA) Tax Treaty Exemption Campaign, a NRA Schedule A and Other Deductions Campaign, and a NRA Tax Credits Campaign. These recently announced campaigns show that the IRS is making NRA reporting compliance a priority. This article will review the rules regarding when the IRS, New York, or New Jersey can tax the income of both resident and NRAs, and the potential defenses available.