I have some questions for you. On December 6, I filed an I-407 Record of Abandonment of Lawful Permanent Resident Status with the USCIS. My belief is that this terminates any US tax obligation I have as of that date. Is that correct, or are there any additional steps I need to take?
On a related note, I am trying to open an RESP account with Questrade and they are insisting that I need to fill out a W-8BEN and a W-9. I am trying to explain to them that a W-8BEN and W-9 forms are contradictory and it should be either one or the other. Furthermore, I am arguing with them that I should not have to fill out either of them because I no longer have any US tax obligation! (unless I’m wrong above). They are saying that as long as I have an SSN, I need to fill out a W-9. Which would mean I need to file W-9s for the rest of my life, as you cannot “close” an SSN number to my knowledge.
Do you have any insight here?
Indeed, your U.S tax obligation will be terminated since you filed Form I-407. You are considered having ceased to be a U.S permanent resident as of this date. It’s possible that you will receive a stamped copy of said form in the coming weeks.
As for your other question, Questrade always asks these questions. They want to know if you are a U.S resident because if so, they need to inform the IRS. You are right saying it should be either W-8BEN or W-9. In your case, it should be Form W-8BEN (if needed) since you are not a U.S resident (given you filed Form I-407). Form W-9 applied to U.S Person which you no longer are. Form W-8BEN will be necessary if you have U.S passive income (dividend, interest) to which tax withholding generally applies (30% per Internal Revenue Code). With Form W-8BEN you want to make sure that the payor applies the correct tax withholding according to the U.S – CAN tax treaty (generally 15%).
Hope it answers your questions,
Olivier Custeau, B.A.A., M.Fisc., EA
Tax master and Enrolled Agent