Instructions For Form 8898 - Statement For Individuals Who Begin Or End Bona Fide Residence
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4Department of the Treasury
Instructions for Form 8898
Internal Revenue Service
(Rev. January 2007)
Statement for Individuals Who Begin or End Bona Fide Residence in a U.S.
Possession
1040 or Form 1040NR. File the form by
Section references are to the Internal
Who Must File
itself at the following address:
Revenue Code unless otherwise noted.
You must file Form 8898 for the tax
General Instructions
year (beginning with tax year 2001) in
Internal Revenue Service Center
which you meet both of the following
P.O. Box 331 Drop Point S-607
conditions:
What’s New
Bensalem, PA 19020-8517
1. Your worldwide gross income
(defined below) in that tax year is more
Two questions deleted. In
than $75,000, and
accordance with Notice 2006-73,
Penalty for Not Filing
2. You meet one of the following:
2006-35 I.R.B. 339, we deleted two
Form 8898
questions related to the closer
a. You take a position for U.S. tax
connection test that were on the March
purposes that you became a bona fide
If you are required to file Form 8898 for
2006 version of Form 8898. Notice
resident of a U.S. possession after a
any tax year, and you fail to file it or do
2006-73 is available at
tax year for which you filed a U.S.
not include all the information required
2006-35_IRB/index.html.
income tax return as a citizen or
by the form or the form includes
resident of the United States but not as
incorrect information, you may owe a
Change in the presence test. A new
a bona fide resident of the possession.
penalty of $1,000, unless it is shown
alternative to the 183-day rule of the
b. You are a citizen or resident of
that such failure is due to reasonable
presence test has been added. See
the United States who takes the
cause and not willful neglect. This is in
item (2) under Presence Test, on page
position for U.S. tax purposes that you
addition to any criminal penalty that
2. This change is effective for 2006 and
ceased to be a bona fide resident of a
may be imposed.
later tax years (tax years ending after
U.S. possession after a tax year for
January 31, 2006). If you are using the
which you filed an income tax return
Bona Fide Residence
presence, tax home, and closer
(with the IRS, the possession tax
connection tests to determine bona fide
authorities, or both) as a bona fide
You are a bona fide resident of a U.S.
residence for either the 2004 or 2005
resident of the possession.
possession if you:
tax year as permitted by the effective
c. You take the position for U.S. tax
•
Do not have a tax home outside the
date of the final regulations under
purposes that you became a bona fide
possession,
section 937, then you may apply this
resident of Puerto Rico or American
•
Do not have a closer connection to
change to those years as well.
Samoa after a tax year for which you
the United States or to a foreign
were required to file an income tax
country than to the possession, and
Purpose of Form
return as a bona fide resident of the
•
Meet the presence test (defined on
U.S. Virgin Islands, Guam, or the
Use Form 8898 to notify the IRS that
pages 2 and 3).
CNMI.
you became or ceased to be a bona
Special rule for members of the U.S.
fide resident of a U.S. possession in
When figuring whether your worldwide
Armed Forces. If a member of the
accordance with section 937(c). See
gross income is more than $75,000, do
U.S. Armed Forces qualified as a bona
Bona Fide Residence, on this page. For
not include any of your spouse’s
fide resident of the possession in an
this purpose, the following are
income. If both you and your spouse
earlier tax year, his or her absence
considered U.S. possessions: American
are required to file Form 8898, file a
from that possession during the current
Samoa, Guam, the Commonwealth of
separate Form 8898 for each of you.
tax year in compliance with military
the Northern Mariana Islands (CNMI),
Worldwide gross income. Worldwide
orders will not affect the individual’s
the Commonwealth of Puerto Rico, and
gross income means all income you
status as a bona fide resident.
the U.S. Virgin Islands.
received in the form of money, goods,
Likewise, being in a possession solely
property, and services, including any
in compliance with military orders will
Note. Use this version of Form 8898 to
income from sources outside the United
not qualify an individual for bona fide
notify the IRS that you became or
States (even if you may exclude part or
residency.
ceased to be a bona fide resident of a
all of it) and before any deductions,
U.S. possession in 2006 and later tax
Exception for the Year of the
credits, or rebates.
years (tax years ending after January
Move
Example. You moved to the CNMI
31, 2006). You should also use this
in December 2005 but did not become
An exception applies to the tax home
version if you are using the presence,
a bona fide resident of that possession
and the closer connection tests for the
tax home, and closer connection tests
until the 2006 tax year. You must file
tax year you moved to or from the
to determine bona fide residence for
Form 8898 for the 2006 tax year if your
possession. Under this exception, you
either the 2004 or 2005 tax year as
worldwide gross income for that year is
satisfy the tax home and the closer
permitted by the effective date of the
more than $75,000.
connection tests for the tax year of the
final regulations under section 937 and
move if you meet the requirements
you are now taking the position that you
When and Where To File
explained next.
satisfy the presence test for either of
those years under the new alternative
File Form 8898 by the due date
Also, a special exception applies to
to the 183-day rule.
(including extensions) for filing Form
the bona fide residence test for the tax
Cat. No. 39789W
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