Effectively Complicated Income

I ended my post on 60(j) rollovers with a cliffhanger, by hinting that the rate of US tax on a nonresident alien’s IRA or 401(k) distribution might depend on the extent to which the income is “effectively connected with the conduct of a trade or business within the United States”—a term of art from IRC § 871 that I quoted without the elaboration it deserves.

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The advance refund is not an advance refund

Pandemic tax relief encompasses far more than deadline pushes; governments are also writing checks. The US, under the CARES Act[1]Coronavirus Aid, Relief, and Economic Security Act, Pub. L. 116-136, 134 Stat. 281 (2020), is giving many of its citizens and residents a $1200 payment. The IRS calls this an “Economic Impact Payment” (EIP), but the codification in IRC § 6428 calls it an “advance refund amount”[2]IRC § 6428(f).

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References
1 Coronavirus Aid, Relief, and Economic Security Act, Pub. L. 116-136, 134 Stat. 281 (2020)
2 IRC § 6428(f)

Source and residence

There are 195 countries[1]www.worldometers.info/geography/how-many-countries-are-there-in-the-world/, and you probably pay most of them no income tax. Why?

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