Publication 519: U.S. Tax Guide for Aliens; Departing Aliens & the Sailing or Departure Permit

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Table of Contents

Introduction

Before leaving the United States, all aliens (except those listed under Aliens Not Required To Obtain Sailing or Departure Permits) must obtain a certificate of compliance. This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. You will receive a sailing or departure permit after filing a Form 1040–C or Form 2063. These forms are discussed in this chapter.

To find out if you need a sailing or departure permit, first read Aliens Not Required To Obtain Sailing or Departure Permits. If you do not fall into one of the categories in that discussion, you must obtain a sailing or departure permit. Read Aliens Required To Obtain Sailing or Departure Permits.

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If you are included in one of the following categories, you do not have to get a sailing or departure permit before leaving the United States.

If you are in one of these categories and do not have to get a sailing or departure permit, you must be able to support your claim for exemption with proper identification or give the authority for the exemption.

Category 1.

Representatives of foreign governments with diplomatic passports, whether accredited to the United States or other countries, members of their households, and servants accompanying them. Servants who are leaving, but not with a person with a diplomatic passport, must get a sailing or departure permit. However, they can get a sailing or departure permit on Form 2063 without examination of their income tax liability by presenting a letter from the chief of their diplomatic mission certifying that:

Their name appears on the “White List” (a list of employees of diplomatic missions), and
They do not owe to the United States any income tax, and will not owe any tax up to and including the intended date of departure.

The statement must be presented to an IRS office.

Category 2.

Employees of international organizations and foreign governments (other than diplomatic representatives exempt under category 1) and members of their households:

Whose compensation for official services is exempt from U.S. tax under U.S. tax laws (described in chapter 10), and
Who receive no other income from U.S. sources.

If you are an alien in category (1) or (2), above, who filed the waiver under section 247(b) of the Immigration and Nationality Act, you must get a sailing or departure permit. This is true even though you filed the waiver and your income is exempt from U.S. tax because of an income tax treaty, consular agreement, or international agreement.

Category 3.

Alien students, industrial trainees, and exchange visitors, including their spouses and children, who enter on an “F–1,” “F–2,” “H–3,” “H–4,” “J–1,” “J–2,” or “Q” visa only and who receive no income from U.S. sources while in the United States under those visas other than:

Allowances to cover expenses incident to study or training in the United States, such as expenses for travel, maintenance, and tuition,
The value of any services or food and lodging connected with this study or training,
Income from employment authorized by the Immigration and Naturalization Service (INS), or
Interest income on deposits that is not effectively connected with a U.S. trade or business. (See Interest in chapter 3.)

Category 4.

Alien students, including their spouses and children, who enter on an “M–1” or “M–2” visa only and who receive no income from U.S. sources while in the United States on those visas, other than:

Income from employment authorized by the Immigration and Naturalization Service (INS), or
Interest income on deposits that is not effectively connected with a U.S. trade or business. (See Interest in chapter 3.)

Category 5.

Certain other aliens temporarily in the United States who have received no taxable income during the tax year up to and including the date of departure or during the preceding tax year. If the IRS has reason to believe that an alien has received income subject to tax and that the collection of income tax is jeopardized by departure, it may then require the alien to obtain a sailing or departure permit. Aliens covered by this paragraph are:

Alien military trainees who enter the United States for training under the sponsorship of the Department of Defense and who leave the United States on official military travel orders,
Alien visitors for business on a “B–1” visa, or on both a “B–1” visa and a “B–2” visa, who do not remain in the United States or a U.S. possession for more than 90 days during the tax year,
Alien visitors for pleasure on a “B–2” visa,
Aliens in transit through the United States or any of its possessions on a “C–1” visa, or under a contract, such as a bond agreement, between a transportation line and the Attorney General, and
Aliens who enter the United States on a border-crossing identification card or for whom passports, visas, and border-crossing identification cards are not required, if they are:
1. Visitors for pleasure,
2. Visitors for business who do not remain in the United States or a U.S. possession for more than 90 days during the tax year, or
3. In transit through the United States or any of its possessions.

Category 6.

Alien residents of Canada or Mexico who frequently commute between that country and the United States for employment, and whose wages are subject to the withholding of U.S. tax.

If you do not fall into one of the categories listed under Aliens Not Required To Obtain Sailing or Departure Permits, you must obtain a sailing or departure permit. To obtain a permit, file Form 1040–C or Form 2063 (whichever applies) with your local IRS office before you leave the United States. See Forms To File, later. You must also pay all the tax shown as due on Form 1040–C and any taxes due for past years. See Paying Taxes and Obtaining Refunds, later.

If you try to leave the United States without a sailing or departure permit, and cannot show that you qualify to leave without it, you may be subject to an income tax examination by an IRS employee at the point of departure. You must then complete the necessary income tax returns and statements and, ordinarily, pay any taxes due.

Where to get a sailing or departure permit.

It is advisable for aliens who have been working in the United States to get the permit from an IRS office in the area of their employment, but it also can be obtained from an IRS office in the area of their departure.

When to get a sailing or departure permit.

You should get your sailing or departure permit at least 2 weeks before you plan to leave. You cannot apply earlier than 30 days before your planned departure date. Do not wait until the last minute in case there are unexpected problems.

Papers to submit.

Getting your sailing or departure permit will go faster if you bring to the IRS office papers and documents related to your income and your stay in the United States. Bring the following records with you if they apply.

Your passport and alien registration card or visa.
Copies of your U.S. income tax returns filed for the past 2 years. If you were in the United States for less than 2 years, bring the income tax returns you filed for that period.
Receipts for income taxes paid on these returns.
Receipts, bank records, canceled checks, and other documents that prove your deductions, business expenses, and dependents claimed on your returns.
A statement from each employer showing wages paid and tax withheld from January 1 of the current year to the date of departure if you were an employee. If you were self-employed, you must bring a statement of income and expenses up to the date you plan to leave.
Proof of estimated tax payments for the past year and this year.
Documents showing any gain or loss from the sale of personal property, including capital assets and merchandise.
Documents relating to scholarship or fellowship grants including verification of the grantor, source, and purpose of the grant.
Documents indicating you qualify for any special tax treaty benefits claimed.

If you must get a sailing or departure permit, you must file Form 2063 or Form 1040–C. Employees in the IRS office can assist in filing these forms. Both forms have a “certificate of compliance” section. When the certificate of compliance is signed by an agent of the Field Assistance Area Director, it certifies that your U.S. tax obligations have been satisfied according to available information. Your Form 1040–C copy of the signed certificate, or the one detached from Form 2063, is your sailing or departure permit.

This is a short form that asks for certain information but does not include a tax computation. The following departing aliens can get their sailing or departure permits by filing Form 2063.

Aliens, whether resident or nonresident, who have had no taxable income for the tax year up to and including the date of departure and for the preceding year, if the period for filing the income tax return for that year has not expired.
Resident aliens who have received taxable income during the tax year or preceding year and whose departure will not hinder the collection of any tax. However, if the IRS has information indicating that the aliens are leaving to avoid paying their income tax, they must file a Form 1040–C.

Aliens in either of these categories who have not filed an income tax return or paid income tax for any tax year must file the return and pay the income tax before they can be issued a sailing or departure permit on Form 2063.

The sailing or departure permit detached from Form 2063 can be used for all departures during the current year. However, the IRS may cancel the sailing or departure permit for any later departure if it believes the collection of income tax is jeopardized by that later departure.

If you must get a sailing or departure permit and you do not qualify to file Form 2063, you must file Form 1040–C.

Ordinarily, all income received or reasonably expected to be received during the tax year up to and including the date of departure must be reported on Form 1040–C and the tax on it must be paid. When you pay any tax shown as due on the Form 1040–C, and you file all returns and pay all tax due for previous years, you will receive a sailing or departure permit. However, the IRS may permit you to furnish a bond or an employer letter guaranteeing payment instead of paying the taxes for certain years. See Bond or Employer Letter To Ensure Payment, discussed later. The sailing or departure permit issued under the conditions in this paragraph is only for the specific departure for which it is issued.

If you submit an employer letter guaranteeing payment of tax with your Form 1040–C, you do not need to fill out the form in detail. Just fill out the identifying information on the form, check the “Yes” box on line A, sign it, and attach the letter. The IRS office where you submit the form will then issue your sailing or departure permit.

Returning to the United States.

If you furnish the IRS with information showing, to the satisfaction of the IRS, that you intend to return to the United States and that your departure does not jeopardize the collection of income tax, you can get a sailing or departure permit by filing Form 1040–C without having to pay the tax shown on it. You must, however, file all income tax returns that have not yet been filed as required, and pay all income tax that is due on these returns.

Your Form 1040–C must include all income received and reasonably expected to be received during the entire year of departure. The sailing or departure permit issued with this Form 1040–C can be used for all departures during the current year. However, the Service may cancel the sailing or departure permit for any later departure if the payment of income tax appears to be in jeopardy.

Joint return on Form 1040–C.

Departing husbands and wives who are nonresident aliens cannot file joint returns. However, if both spouses are resident aliens, they can file a joint return on Form 1040–C if:

Both spouses can reasonably be expected to qualify to file a joint return at the normal close of their tax year, and
The tax years of the spouses end at the same time.

Except when a bond or an employer letter is furnished, or the IRS is satisfied that your departure does not jeopardize the collection of income tax, you must pay all tax shown as due on the Form 1040–C at the time of filing it. You must also pay any taxes due for past years. If the tax computation on Form 1040–C results in an overpayment, there is no tax to pay at the time you file that return. However, the IRS cannot provide a refund at the time of departure. If you are due a refund, you must file either Form 1040NR or Form 1040NR–EZ at the end of the tax year.

Usually, you must pay the tax shown as due on Form 1040–C when you file it. However, if you pay all taxes due that you owe for prior years, you can furnish a bond or an employer letter guaranteeing payment instead of paying the income taxes shown as due on the Form 1040–C or the tax return for the preceding year if the period for filing that return has not expired.

The bond must equal the tax due plus interest to the date of payment as figured by the IRS. Information about the form of bond and security on it can be obtained from your IRS office.

Form 1040–C is not an annual U.S. income tax return. If an income tax return is required by law, that return must be filed even though a Form 1040–C has already been filed. Chapters 5 and 7 discuss filing an annual U.S. income tax return. The tax paid with Form 1040–C should be taken as a credit against the tax liability for the entire tax year on your annual U.S. income tax return.