# Bona Fide Resident due to family illness?



## kana11 (Oct 2, 2020)

Hi, 
I have been living and working in France since 2011. I didn't realize I had to file taxes until last year, when I hired a tax preparer to get me where I need to be with SFOP. I'm using these previous returns to file for 2019 but I'm TERRIBLE at this kind of stuff and a bit stuck on my FEIE.
My tax preparer always used the physical presence test to qualify me because I only went back to the US for short visits from 2016-2018. However, my mom fell ill in 2019 and I ended up having to stay in the US to take care of her from June 25, 2019-December 3, 2019, after which time I returned to France. That being the case, I assume I don't meet the requirements for the Physical Presence test anymore and would have to justify being a Bona Fide Resident?

Since I've technically lived in France since 2011, is that when I say my residence began? And will that not conflict with the other tax returns where I claimed physical presence instead? 

If I'm self-employed and worked some freelance jobs while in the US, is that technically income earned "in the US on business" even if I wasn't there on business? All of my work is with French companies. 

Many thanks in advance!


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## Bevdeforges (Nov 16, 2007)

There are two big considerations here: that of your "bona fide residence" and that of determining your "US source income."

As far as the bona fide residence is concerned, it can well depend on what sort of visa/carte de séjour you are on. Since you've been here since 2011, I would expect that you might be on a carte residente by now - in which case I would go with the bona fide resident classification. 

On the US source income, you're probably kind of stuck. For international purposes it is generally accepted that where you are physically located while doing the work for which you are being paid is the "source" of the income. The location of the client or customer really doesn't figure into this at all.

Then, of course, there is the little matter of how much "enforcement power" the IRS has over how you report your income, especially that coming from outside the US. Generally speaking, the IRS has limited or no way of verifying whatever you report from foreign sources. Up to you how you want to play it.


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## kana11 (Oct 2, 2020)

Interesting. So-- NOT SAYING I'M DOING THIS-- but theoretically I could claim that my income was made in the first half of 2019 while I was in France? 

And yes, I have a 10 year resident visa now and am married to a French citizen.


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## Bevdeforges (Nov 16, 2007)

Not saying what you SHOULD do - but the IRS would have no way of knowing the precise timing of when you made that money. The only documents they have to reference these things against are things like W-2s, 1099s and other US documents reporting income.


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## Moulard (Feb 3, 2017)

kana11 said:


> I assume I don't meet the requirements for the Physical Presence test anymore and would have to justify being a Bona Fide Resident?


Your assumption is wrong. Without knowing all of your circumstances I suspect that you would be eligible both as a bona fide resident, and under the physical presence test.

So long as you resided in France for an uninterrupted period that includes an entire tax year you can file as a bona fide resident. Fundamentally, your return to the US was for a definite, temporary purpose and you returned to France after you accomplish it. 

Under the physical presence test you need to be physically present in a foreign country, or countries, for at least 330 full days during any period of 12 months in a row. So there is no problem claiming eligibility under the physical presence test using the period June 25, 2018 to June 24, 2019.

As Bev has stated, any work you performed in the US for your French employer would be considered US sourced and as such would not be excludable.

The US has primary taxing rights on that income, and if I skim the US-France treaty correctly, France uses a combination of foreign tax credit and exemption methods to reduce French Tax by that amount. But as you correctly intuit, very difficult absent an audit (which will not happen) for the IRS to challenge whatever you report via self-assessment, particularly given you have returned to France.

Given you are self-employed, you also need to consider the totalisation agreement.

According to the agreement if you are self employed and you normally work in France but transfer your business activity to the U.S. for two years or less then you remain covered by France. So nothing changes on that front.


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