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IRS practice unit: Determining individual’s residency for treaty purposes

IRS practice unit: Determining individual’s residency

The IRS Large Business and International (LB&I) division this week publicly released a “practice unit”—part of a series of IRS examiner “job aides” and training materials intended to describe for IRS agents leading practices about tax concepts in general and specific types of transactions.

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The title of the practice unit is: 

  • Determining an individual’s residency for treaty purposes

The practice unit provides insights into the IRS’s position on determining an individual’s tax residence. If an individual is a resident based on the laws of one treaty-partner country, typically no further analysis is required—that individual will be considered to be a resident of that country for treaty purposes. However, when an individual is a resident under the domestic laws of both countries to a treaty, the applicable treaty usually provides tie-breaker rules that apply to assign a single country of residence for treaty purposes. The practice unit is intended to assist the examiner in making a treaty-residency determination and in applying the tie-breaker rules, if applicable. Read text of the practice unit on the IRS practice unit webpage with a posting date of September 6, 2018.

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