The tax man cometh

With two days to go before tax returns are due, taxpayers across the country are scrambling to finish their returns and avoid an unwanted visit from the Internal Revenue Service.

Taxes present a particular problem for international students, who must navigate a confusing web of rules, regulations and forms that are completely foreign to them and many tax-preparers in the United States.

"It's a shock. You come from abroad, you start your studies and then in January we send you a message that says, 'by the way, you have to file a tax return even if you didn't have any income in the United States,'" said Jim Fine, who works in the Office of International Programs at Penn and helps international students with their taxes. "There's a lot of confusion."

Over the past 15 years -- during which Penn has assisted international students and visiting professors with tax preparation -- Fine has familiarized himself with the complex set of rules and forms that go beyond the usual 1040 and often bear little resemblance to those that most students must deal with.

The OIP's services have been popular from the start. In addition to advising about 500 people in person, the office offers free use of special tax preparation software that about 1,000 international students take advantage of. Even the IRS itself has used some of Penn's materials to train its own staff to deal with international students and taxes, Fine said.

"One way or another, almost all of the population gets the message and relies on some form of the tax resources that we offer," Fine said.

The basic form for international students is "three times as long [as the form for residents] and includes a lot of items and lines whose meaning and purpose are not entirely obvious," Fine said. And all this comes after students must determine their residence status as defined by the IRS.

Even for U.S. residents, taxes can be confusing.

Certified public accountant David Eife said that the biggest confusion for out-of-state students arises when they work for companies as independent contractors rather than employees with regular salaries -- which means they must file a form 1099 instead of the usual W-2.

"With the 1099 they're required to pay a $250 business privilege license to the city of Philadelphia, and they're also required to file a business privilege tax return and a net profit tax return," said Eife, who is based in Philadelphia.

Eife has a $150 minimum charge for completing tax returns. Tax preparation can range in cost from about $60 to $400, the cheaper price reflecting that of preparers who are not CPAs, Eife said.

Still, some basic rules are easy to follow. Most Penn students must file a return regardless of income, according to Pennsylvania Department of Revenue spokeswoman Janis Holloway.

However, students may not need to file a Pennsylvania return if their state has a reciprocal agreement with Pennsylvania -- information that is available on the department's Web site.

For students without access to an accountant and who have been putting off filing taxes, it might not be too late.

"We do a lot of things electronically," Holloway said. "You can [file your return] free online, or by Telefile over the phone."

Returns filed online are viewed more quickly and refunds come more quickly, Holloway said.

Eife also had some parting advice for tax procrastinators.

"If you don't file your return on time, file an extension," Eife said. "You can get an extension of time to file a tax return from April 15 to Aug. 15."

The necessary form, 4868, is available on the IRS Web site. To file the form, you must be able to estimate your federal income tax and pay that amount.

If you've put it off this long, don't worry, you're not alone.

Fine -- who is still busy helping international students with their taxes -- is racing to get his personal income taxes finished.

"I just started work on them last night, and I haven't finished them yet," Fine said. "It's going to be down to the wire."

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