Category: Tax Returns, Examinations & IRS Procedure;
International Copyright 1998, The Tax Resource Group. All rights reserved. Telephone 800-578-3498. Internet: www.taxresourcegroup.com Background Issue Answer Discussion A taxpayer who is a bona fide resident of the USVI on the last day of the tax year files Form 1040 with The Virgin Islands Bureau of Internal Revenue. The return filed with the USVI should report the taxpayer's worldwide income. If the return includes income from non-USVI sources, the taxpayer must include Form 1040-INFO to report the non-USVI source income. This is the filing procedure even for the tax year in which a U.S. citizen or resident alien becomes a bona fide resident of the USVI. A return filed with the USVI taxing authorities on which the taxpayer reports and fully pays his tax liability relieves the taxpayer from filing in the United States. See generally IRC Section 932(c). If a U.S. citizen or resident alien who is not
a bona fide resident of the USVI on the last day of the tax year has income
from sources in the Virgin Islands or income effectively connected with
the conduct of a trade or business in the Virgin Islands, the taxpayer must
file identical tax returns with the United States and the Virgin Islands.
The original return is filed with the IRS in the United States and a copy
of the entire return is filed with The Virgin Islands Bureau of Internal
Revenue by the due date for filing Form 1040. If a U.S. citizen or resident must file both with the U.S. and the USVI tax authorities, the U.S. return should be filed as follows. Internal Revenue Service Center The USVI return should be filed as follows. Virgin Islands Bureau of Internal Revenue |
