Help with IRS / USA getting tax rebate / refund for an Indonesian

snpark

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Any Americans here or even Indonesians that have a good ref tax accountant / experience in getting back a tax rebate refund from the IRS for an Indonesian citizen resident.

The tax was withheld on her dead husbands savings. He was actually Austrian. They withheld 30% on his investment policy in 2014 and she wants to try apply to get the tax back that she is due.

Thanks
 

jukung11

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It likely wasn't savings, but a pretax retirement account. Distributions to nonresident aliens are taxed. They are automatically withheld at 30%. The nonresident alien (NRA) cannot get a standard deductions, so most of the time the distribution is mostly taxable.

https://www.irs.gov/individuals/international-taxpayers/nonresident-alien-figuring-your-tax

If the account amount was small, the NRA would get a refund because the marginal tax rate would be less than 30%, but if it was a large amount, there could still be tax due. The NRA would have to file a tax return to determine if there was a refund.

The statute of limitation is likely expired. There is a 3 year rule for most return years for refunds. If the dollar amount of the account was large enough that it is worth it to hire a lawyer or accountant, she probably owes the tax. If it is a small amount and she just wants to check what she can do for free, she can contact the taxpayer advocate.

https://www.irs.gov/taxpayer-advocate
 

snpark

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Thankyou. Useful. The tax amount withheld was 6 figures and yes it's been a few years. But worth her digging a bit to see if she can some of it back at least. I think the Austrian husband worked for Baker Hughes so it could have been pension plan maybe.

Anyway I have emailed the generic IRS help desk email to see if they can redirect me. Let's see

Thanks.
 

jukung11

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If the tax amount was six figures at 30% of the distribution, then she probably owes more tax. The marginal tax rate back then was 33-35% for that distribution amount. Only 30% is automatically withheld.
 

Darlis

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Jan 12, 2021
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It likely wasn't savings, but a pretax retirement account. Distributions to nonresident aliens are taxed. They are automatically withheld at 30%. The nonresident alien (NRA) cannot get a standard deductions, so most of the time the distribution is mostly taxable.

https://www.irs.gov/individuals/international-taxpayers/nonresident-alien-figuring-your-tax

If the account amount was small, the NRA would get a refund because the marginal tax rate would be less than 30%, but if it was a large amount, there could still be tax due. The NRA would have to file a tax return to determine if there was a refund.

The statute of limitation is likely expired. There is a 3 year rule for most return years for refunds. If the dollar amount of the account was large enough that it is worth it to hire a lawyer or accountant, she probably owes the tax. If it is a small amount and she just wants to check what she can do for free, she can contact the taxpayer advocate. Tax accountant near me ybl...


https://www.irs.gov/taxpayer-advocate



how is the situation now?
 

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