Stay away from Income
tax notices and scrutinies

A Tax Residency Certificate (TRC) is a document that certifies the residency status of a taxpayer for income tax purposes and can help avoid double taxation and reduce withholding taxes imposed on income generated by a U.S. taxpayer in a foreign country. Without a TRC, the U.S. taxpayer may be subject to higher taxation in the foreign country, resulting in income that may be taxed twice at an additional real cash tax cost to the businesses and individuals. Therefore, obtaining a TRC is essential for U.S. taxpayers operating abroad who are looking to mitigate their tax liabilities and maintain compliance with tax laws.

An individual’s physical stay is considered for deciding the status of residence in India. An individual who is qualified as a ‘Resident and Ordinarily Resident’ (ROR) is expected to pay taxes for the taxes that he/she has earned abroad. Both his/her foreign as well as Indian income is subject to tax. This foreign income will be taxed in the country where it was earned too. The individual will end up paying tax for the same income twice- in the resident country as well as source country.

Typically, it takes 4-6 weeks to receive your U.S. Tax Residency Certificate. It’s important to note that you cannot file Form 6166 if you haven’t filed a required U.S. tax return or if you have filed a U.S tax return as a non-resident. For non-resident aliens working in the U.S, IRS Form W8 is used to report income regardless of your immigration status.

IRS Form 8802 Application for United States Residency Certification, is an official tax document that is used to request IRS Form 6166, Certificate of Residency, so that U.S. residents can claim income tax treaty benefits and other tax benefits in qualifying foreign countries.
Use Form 8802 to request Form 6166, a letter of U.S. residency certification for purposes of claiming benefits under an income tax treaty or value added tax (VAT) exemption. You cannot use Form 6166 to substantiate that U.S. taxes were paid for purposes of claiming a foreign tax credit.

Requests by individual applicants. The user fee for a request by an individual applicant is $85 per Form 8802, regardless of the number of countries for which certification is requested or the number of tax year(s) to which the certification applies. For this purpose, an individual applicant means an individual who is a citizen of the United States or a resident thereof, within the meaning of section 7701(b)(1) (A).