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Out of status, employment gap and status revalidation Gap in employment(paystubs) and the resulting problems during status transfer and green card filing.

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  #1  
Old 08-21-2007, 11:09 AM
obviously obviously is offline
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Default Misc Income: H1B / EAD etc

Would greatly appreciate insights on how to approach/ resolve the following issue:

1. 2005 on H1B
- 'A' got $1000 misc income from writing for an online magazine
- The publisher reported income to IRS
- 'A' not pay taxes, completely forgot about it, since she didnt get the 1098 in time for tax season
- Got 1098 after taxes were filed!
- 'A' realized that this might impact I-485 processing
- Asked publisher to pay her firm in India (in which she has a business interest) and returned check to the publisher
- Publisher paid firm in India through USD check payable to her

2. Fast forward to 2007
- 'A' filed I-485 in June '07 with '05 and '06 tax filing copies
- Got an EAD card in July'07
- 'A' received a notice from IRS in Aug '07 stating that misc inc was not reported in 2005, with a notice to pay tax, interest and penalties
- The notice states that an amended return need not be filed for Federal, amended State needs to be filed

What should 'A' do?
- She would like to pay the taxes off. Will this impact I-485 adjudication?
- Will this potentially impact conversion to Citizenship?

The kicker:
- She continued to write for these folks in 2006 too. However, their payments in 2006 went directly to the Indian company.

She would like to account for all taxes. At the same time, as an Indian citizen with a valid business interest in India, can she continue to earn through this Indian entity because she is not working in the United States (taking a US person's job).

- Now that she is on an EAD card, can she continue to write and get US income in the US and file taxes with the misc income?

She would welcome any and all objective constructive suggestions.

Thanks a ton!
________
Kitty_Wilde

Last edited by obviously; 08-28-2011 at 09:51 AM.
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  #2  
Old 08-21-2007, 11:14 AM
pray pray is offline
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Smile We paid the taxes

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Originally Posted by obviously View Post
Would greatly appreciate insights on how to approach/ resolve the following issue:

1. 2005 on H1B
- Got $1000 misc income from writing for an online magazine
- The publisher reported income to IRS
- I did not pay taxes, completely forgot about it, since I didnt get the 1098 in time for tax season
- Got 1098 after taxes were filed!
- Realized that this might impact I-485 processing
- Asked publisher to pay my firm in India (in which I have a business interest) and returned check to the publisher
- Publisher paid firm in India through USD check payable to me

2. Fast forward to 2007
- Filed I-485 in June '07 with '05 and '06 tax filing copies
- Got an EAD card in July'07
- Received a notice from IRS in Aug '07 stating that misc inc was not reported in 2005, with a notice to pay tax, interest and penalties
- The notice says an amended return need not be filed for Federal, amended State needs to be filed

What should I do?
- I would like to pay the taxes off. Will this impact I-485 adjudication?
- Will this potentially impact conversion to Citizenship?

The kicker:
- I continued to write for these folks in 2006 too. However, their payments in 2006 went directly to the Indian company.

I would like to account for all taxes. At the same time, as an Indian citizen with a valid business interest in India, can I continue to earn through this Indian entity because I am not working in the United States (taking a US person's job).

- Now that I am on an EAD card, can I continue to write and get US income in the US and file taxes with the misc income?

I would welcome any and all objective constructive suggestions.

Thanks a ton!
We had a similar situation where we earned money for writing a course for someone.We had paid the taxes.What you could have done was to file an amendment if the 1099 form came late or anticipated the amount and paid taxes on it.Contact a CPA on what to do.You can probably even claim expenses like car etc to offset a large part of your income.As far as the immigration situation is don't bother,they have no idea about tax issues,just pay off what is required to the IRS.If you feel you have a grievance ask the CPA if you can contest the issue saying the 1099 came late.Don't get tax advice from forums contact a CPA.As far as immigration worries are concerned do not worry,people on the site worry about way too many things.Immigration officials are not out to get you in this counntry, you will get your GC as long as your paperwork is OK.Only if it is a felony it will come up on the record.Dont worry be happy.

As far as continuing to earn income on EAD,yes you can, in fact get a CPA to tell you how you can claim further deductions on 1099 like car expenses etc, even if these are not related to your business, the IRS allows some standard expenses.

Last edited by pray; 08-21-2007 at 11:20 AM.
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  #3  
Old 08-21-2007, 01:17 PM
obviously obviously is offline
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Default Thank you

Pray, thank you for the note. Question though is, could there be a stage where the tax returns are scrutinized and the USCIS determines that such work was done 'out of status' since the person did not have authorization to work outside the H1B status?

Murthy.com had the following info: http://www.murthy.com/news/n_hombus.html

I agree, they are not out to get people. However, considering how tactically they apply their rules, could they be limiting foreigners from earning income accruing to a foreign entity? After all, the hunt for GC should not limit a foreigner from making money back 'home'. Right ?

Thoughts? and thanks!
________
Annita live

Last edited by obviously; 08-28-2011 at 09:51 AM.
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  #4  
Old 08-22-2007, 04:02 PM
obviously obviously is offline
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Default Any more updates?

Would be much welcome and appreciated. An immig attorney is also being contacted in parallel, and I will request the petitioner in this case to share her findings through this thread... in case it would benefit others.
________
Bong Reviews

Last edited by obviously; 08-28-2011 at 09:51 AM.
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  #5  
Old 08-22-2007, 10:30 PM
pray pray is offline
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pray is infamous around these parts pray is infamous around these parts pray is infamous around these parts
Default Don't worry

You have nothing to worry about.You can sort out you previous tax issue by either paying the fine or contesting with the help of a CPA.When you submit tax records if any do not submit the modification just the original with just your "official" income.With EAD I think you can earn other income too though I am not an expert in this.Check with your immigration attorney.Since you are getting your money paid in India that is probably fine too you will avoid taxes in the USA as well,though ofcourse you should probably report it.

As I said don't get worried and lose sleep, you will be fine.
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