Hi Sajhaites,
I filed Form 1040 for taxes on Turbo tax for 2006 instead on Form 1040 NR which is actually required for International Students. I have already received the refund for Federal and state taxes earlier in the year. I had also filed for CRP Rental refund which was due to be paid out by the 15 of August.
Now here's the question. The department that handles the refund of taxes paid on rent has sent me a letter asking me why I didn't File 1040 NR and is also asking for details on how much I paid for school along with how it was paid and the amount of Scholarships and Grants I was given. They have also asked for a copy of I-20 since I am listed as a student for TAX year 2006 on the 1040 form that I did file. The letter states that if these information are not sent to them, the refund will be denied or adjusted. I made approx. 15 K in 2006 ( I have a work permit) plus i received about 3K for friends and family . The tuition costs for school were 10K and paid about 4 K for rent. Any suggestions on what I should do? What reason should I provide for no filing 1040 NR?

Thank you for your help.

If you have work permit and been residence of USA for 5 years you can file your tax as a US Residence and you can use 1040 tax form. Once you have filed 1040 you keep in now and in future it is your choice unless your tax withheld is reported as Non residence alien and IRS asked you to file as a NON RESIDENCE ALIEN.

If you want to amend your tax 1040 to 1040NR you may end up paying back to IRS. It is not simple to file because you are not allowed for standard deduction. You have choice to use itemized deductions and you can use necessary expenses like books and supplies, mandatory fees (not health insurance) can be added to get itemized deduction. In school they will not explain that you can use itemized deduction, it lower down your taxable income.

I could not get about CRP rental deduction, is it about MA state has some allowance for single up to 1500 and for family up to 3000 ( 50% of your rental expenses which ever is lower).
Can you explain about CRP?

YOU MUST PROVIDE ALL INFORMATION YOU HAVE ASKED BY IRS. OTHERWISE YOU WILL BE IN TROUBLE.

Did I answer your question?

Thank you NayaSadak for your advice. I am going to send the required details back to them soon. I haven't been here for 5 years so I guess I need to revert to 1040NR again. I thought it was okay to file taxes through Turbo-tax but once i got this letter from the IRS I don't think I want to take any chances.It was tempting to do it through Turbotax since I got double the refund than if I would done it using 1040 NR.
As for CRP( Certificate of Rent Paid), what happens is with the rent that you pay your rental company, they add 19% property tax ( which is included in the rent). This percentage is refunded to you when you file form M1PR sometime during the month of August, which in my case was almost $500.
Due to the fact that I filed 1040 and I am thinking the IRS sees me as NR Alien ( i guess they checked my SSN), they could found discrepancy ( which I am unsure of because I triple checked everything on the M1PR form before I sent/mailed it in) in the MRP1 form. Anybody have clues on that??

BTW my status is still in F-1, just in case of confusion.

I RS does not check with SS Office for your status, but it is the your work place who reports ot the IRS.
As long as you have F1 Workpermit, and you work outside the school , they will not report to IRS as nonresident.
Which State you are in? It may help me to acquire more knowledge other than MA.

What exactly IRS is asking you to furnish. Can you name the papers they are looking for?

Random theory is one of them to be audited. Other than that there are many reasons to be audited.

Every employer has to report to the IRS, the figure/ data stored in IRS file if not matched will redflag and will automatically generates audit.

Please, do not mix up with state tax return and federal tax return.
In your case it is audited by state revenue office?

If you want I may run the numbers and let you know what is should be?

Do not to provide your real name and ss# but give the
actual $amount in each box in w-2 .

The details that they are asking for are

1) Please explain why you did not file 1040 NR, federal income tax return for the 2006 tax year.

2) The 1040 you did file indicates that you were a student during 2006. What was the amount of your tuition? How was it paid? List the amount and the source of any grants, scholarships, fellowships or tuition benefits that you received during 2006.

3) Submit a copy of your complete university student transaction statement , by account, for the year(s) listed above.

4) submit a copy of your USCIS Form 1-20-ID

They have requested I send the details to them by September 15.



I took out a student loan to pay for school in 2006 and also charged some of it to my credit card.

I drafted this letter to be sent out to them. Does it do justice to the questions asked?

***********************************************************************
Re: Property Tax Refund Details

Dear Sir,
This is in regard to the letter that was sent out to me on August 15, 2007 pertaining to details required in order to process my Property Tax Refund for 2006.
The reason 1040 NR was not filed was due to the fact that while filing my federal taxes for 2006, I assumed that was all I needed to submit (i.e. Form 1040). However, I soon realized I was required to complete form 1040NR and not the previous. I have yet to submit my amended tax returns (form 1040 X) which I intend to do while filing taxes for the next year.
Also as per your letter, I also want to confirm that I am currently a senior going to school in St. Paul, Minnesota. Please find below the particulars in regard to amount of tuition paid below.

Tuition Costs for year 2006

Spring 2006

Tuition Costs: $11,684.35

Grant from School: ($7,750.00)
Total Paid: $ 3934.95

Fall 2006

Tuition Costs: $12,232.40

Grant from School: ($7,750.00)
Total Paid: $4482.40


TOTAL FOR YEAR 2006: $ 8417.35 ( not including interest/late fees)


I paid for the tuition costs using my Credit cards and a student loan which was taken out in September.

Please find attached the documents supporting this claim along with this letter. They were taken from my online student account and they give details by term and all pertinent information.

Please also find enclosed herewith a copy of my USCIS I-20- ID.

If there are any other details that you would like me to furnish or any other questions, please feel free to mail me. You can also contact me at **********@hotmail.com

Thank you,

Sincerely


***********************************************************************

Thanks Kukpaboy and Nayasadak. I am meeting a tax advisor this week . We'll see how it goes. Hopefully all goes well. Will update this post on what the outcome was.

IF you go to any tax office, they will advice you to file 1040 NR and amend your tax.
You are not clear here.

Did you got audit by Federal or State?
Property tax is handle incase you have house and you have paid those taxes and you are itemizing.

You let us know who audited you? What they are looking for?

You will get 1099 for tution fees you have charged and scholorship you have received.
You may able to get refund for tution reimbusement or hope credit if you are in undergraduate level and it is your first and second year.

You should give us the figure you have in your w-2 form, not what you have received the scholorship.

Your total scholorship money will be taxable after deducting the tution and other related expenses you have incurred.

I am confused now becasue we are not getting the figures that is in w-2 form.

The letter that I received says that it is from the Minnesota Department of Revenue. So I think that would make it the State. Like I mentioned in my earlier post, they want to know what my tuition amount was, what the amount of scholarship was that I received and how it was paid. My W2 form shows gross pay as $15,112.00 . Federal Witholding S-1:$1887.00 and State S-1:as $ 750.00.
Also as per your question NayaSadak, I rented in 2006. Lemme know if you need anything else.

साथी, कुरा खुलस्थ सँग राख्नु पर्‍यो नि। एती लामा कुराकानी गर्नै पर्दैन थियो।

You should mention that in your first posting and our thought came true.

Now you can focus on state only. Usually, any scholarship minus tuition you paid to your school should be your gross income. Did you get any 1099 for scholarship???

But they gave you cash and you paid to your school or the gross income shown in your w-2 form is the total scholarship amount awarded? We need to know that too.
1) If the gross income is your total scholarship awarded and they deducted the tuition directly, then you can claim only the cash you had received. But in your case it seems the university gave you cash, you paid by credit cards, in that case your gross income will be equal to the scholarship awarded and have to treat as your gross income.
2) While filing State tax, you can file as a resident of that state. Let run the data and let you know.
What is your filing Status? Are you filing, Single, married filing jointly and with children? Need to know too.

For the grant that I receive from school, it gets paid directly to my account. I never see the money. I check my student account and just pay the remaining balance. And I never get a 1099 so I don't know how that works. Do you get one if it's a GRANT? As for my filing status it is S-1. I file Single. This is really informative so thank you both very much for your time.

Found this on the web. I meet all the criteria which means that the grants that I receive are Tax-free.


Interest/Dividends/Other Types of Income: Grants, Scholarships, Student Loans, Work Study

I received an academic scholarship that is designated to be used for tuition and books. Is this taxable?

Qualified scholarships and fellowships are treated as tax-free amounts if all of the following conditions are met:

1) You are a candidate for a degree at an educational institution,
2) Amounts you receive as a scholarship or fellowship are used for tuition and fees required for enrollment or attendance at the educational institution, or for books, supplies, and equipment required for courses of instruction, and
3) The amounts received are not a payment for your services.

This is what I got from TAXACT.COM and you can manupulate it.
I did not fill in the scholorship and expenses because all your scholorship amount had made taxable and logically there is no way to fill in that part will be double dipping. I mean adding more income. Is this the result you got using Turbo Tax. Turbo tax is expensive and I prefer to use TaxACt.com which is easy as turbo and less expensive.
You can log to kathandu.nepal and password is himpo27


Federal Income: $15,112
Adjustments: $0
Adjusted Gross Income: $15,112
Deductions: $5,150
Exemptions: $3,300
Taxable Income: $6,662
Tax: $668
Alternative Minimum Tax: $0
Credits: $668
Other Taxes: $0
Payments: $1,917
Underpayment Penalty: $0
Federal Refund: $1,917
State Federal Taxable Income: $6,662
Additions: $0
Subtractions: $0
Minnesota Taxable Income: $6,662
Minnesota Tax and Contributions: $356
Minnesota Withholdings and Credits: $750
Refund: $394 394.
Property Tax Refund: $0

Thanks to both of you for your suggestions.