Failure to File

Many students and scholars who are required to file returns either do not file or file incorrectly. Many of them would be eligible for a refund if they filed the required forms. Some would rather forgo the refund than try to figure out which form they should file and when. Part of your job is to inform them whether they need to file.

The IRS will not penalize foreign students and scholars for not filing if they have no tax liability. However, they still must file Form 8843, Statement for Exempt Individuals and Individuals with a Medical Condition. If they choose to apply for residency at a later date, they may be asked to show proof of tax compliance. Therefore, foreign students and scholars should file a tax return if they have circumstances requiring them to file. This is true even if their tax withholding covers the tax that will be assessed, and are not interested in or eligible for a refund.