We had a client at VITA today whose situation raised a question we couldn't answer to my satisfaction.
Facts. She is here on an F (student) visa and is in compliance with its requirements. She has an SSN valid for employment with DHS approval. She is employed part-time by the college she attends. She arrived in the US in
2005 and has not left since. She has applied for permanent resident status. The application is pending. She's from Moldova, and we aren't aware of any pertinent treaty provisions. She's unmarried and has no non-US source income for 2007.I have little experience with nonresident aliens, so I slogged my way through the return with extra care. We had filed a 1040NR for her for 2006, but her income was minimal, and she got a refund of all tax withheld. In
2007 the 1040NR leaves her with a tax liability of about $300.When I researched what benefit she could get for her education expenses is when the confusion started. The Pub 17 discussions of both the tuition adjustment and the ed credits clearly state that they are not available to nonresident aliens. However, they also seem to imply that a nonresident alien can elect to be treated as a resident alien. If the client did that she'd get a full refund plus EITC. (I researched the DHS restriction on the SSN, and per Pub 17 it's valid for EITC.)
The Form 8843 wasn't any help. She had a piece of paper furnished by the school that said all international students MUST file an 8843, but the 8843 instructions imply that it's an election to have your presence in the US ignored for the physical presence test.
I didn't have access to Pub 519 at the site, but I've looked at it now. It seems to indicate that there's no choice--a student in compliance with an F visa is a nonresident alien.
The apparent conflict in IRS documents of equal weight has me stumped. Sorry for the length of this, but I wanted to try to get all pertinent facts in the first post. If anyone has a definitive answer as to whether she can elect to be treated as a resident alien, I'll be grateful.