Does Form 8802 affect filing Form 2555

I have a client in Korea. She was asked to file out Form 8802 Application for US residency Certificate. This will allow her to avoid paying Korean taxes. The question came up if this will negatively affect filing Form 2555?

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Form 8802 does not actually change your status as a US resident for tax purposes, it only gets a letter from the IRS confirming the TP's status as a resident.  So I'm going to assume that TP is already a citizen or permanent resident.  If TP has been filing 1040NRs then their 8802 will be rejected.

If TP is qualifying for 2555 exclusion based on physical presence then there's no impact.  However if TP is qualifying under bona fide residence test then you may have an issue.  From the instructions to form 2555.

"If you submitted a statement of nonresidence to the authorities of a foreign country in which you earned income and the authorities hold that you are not subject to their income tax laws by reason of nonresidency in the foreign country, you are not considered a bona fide resident of that country."

I can't know for sure what your client is saying or not saying to the Korean government, but my guess is that sending them the US residency certificate would disqualify her from being a bona fide residence under the above rule.

 

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