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Old 03-31-2009, 03:30 PM
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Join Date: Mar 2009
Posts: 1
foreign earned income help

I work for a foreign DOD contractor, in Iraq; they do not have an EIN, and I do not get a W-2. I have worked for the company for years, and prior to this I worked for another DOD contractor, for several years, as well; again, the employer did not have an EIN, nor give me a W-2.

I have not filed a tax return now for 5 years, even though I have a house in the US, I am in Iraq for more than 330 days a year. I have been under the impression that I do not have to file a tax return because of the lack of an EIN by my employer.

Here is my problem. I am trying to buy a house and the mortgage company is telling me that they do not recognize foreign earned income where a tax return is not filed, because there is no way to substantiate my income, and actually verify it.

Take the home loan out of the equation, should I be filing a tax return regardless, and how could I show that the company is in fact a real company but does not a have a US tax id, to produce a w-2 for me?

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Old 04-12-2009, 11:51 PM
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Join Date: Apr 2009
Posts: 2
maybe an independent contractor

I am not a tax attorney, and I have found few people that can accurately deal with your situation. I am a sole proprietor (independent contractor) and I have had foreign contracts where I was physically not present in the USA for years at a time. The companies paid my USA company (my business bank account in the usa), so I have records of income.

Are there any US deductions taken out of your check? If not, then you may be considered an independent contractor. If this is the case, then you should file your old tax returns, with schedule C 'profit or loss from business', and also claim form 2555 'foreign earned income'. This will give the loan people the proof of income, but it will also bring you a bit of tax problem... as an independent contractor (or business owner), you are liable for self employment taxes on the full amount, regardless that it is foreign earned. This means you may owe penalty and back taxes for the last 5 years if you file as such.

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