Canadian Corporation Doing Business in the US

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Question

I am an accountant in [Canadian city] and have tried to call the IRS to determine what my client will require in forms and cannot get to talk to a person.

I found your name on the internet and would gladly pay for your expertise in just knowing what to fill out.

Here is the situation:
Client has Corporation in BC, Canada, does 45% of business in Canada as selling on-line videos of Dog Training, the 50% is obedience classes taught on their farm in BC and the 5% is seminars given in the States.
The problem is when she travels to the States they always ask is it business or pleasure, if she says business and takes her Seminar data (brochures, videos, etc) they make her fill out numerous forms. All income is recorded in Canada and taxed in Canada. She travels also to do competitions in the States but it more of a promotional for the videos than income producing. She is away maybe a total of 120 days in a calendar year.
I have searched and all I can come up with is a form SS-4 which is the Application for Employer Identification Number, but I don’t want to fill this out if it not the correct one we want.
What is the best form or ID number this person should get?

Thank you for your attention on this,

Answer

Dear XXXX

Most likely your won’t need an EIN number unless the payor of the 5% income is requesting such a number.

The corporation is resident in Canada and will only have an obligation to US taxation if it has a permanent establishm’ent in the US (which it doesn’t look like).

READ  Cross Border Tax Q&A - Deduction of RRSP Contributions on 1040 Return?

As long as she isn’t in the US for more than 183 days in each respective year, or she doesn’t meet the substantial presence test, she will not be liable for US taxes.

I may be missing some important facts from the information above. It would be best to give me a quick call to ensure we’re on the same page.

Regards

Phil Hogan, CA
250-661-9417

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