I applied to the tax treaty between the US and Egypt under article 22 for the years 2012 and 2013.
This is because I find the following conditions apply:
- I was a resident in Egypt before I came to the US.
- I am invited by a university (by Columbia University through an H-1B visa).
- My work is in the public interest (funded by the department of defense).
- The expected period of employment (at the time when I came) did not expected to exceed two years.
However, I got an IRS audit that disallows the treaty because they claim condition 4 has not been met, because in my visa petition, it is mentioned that the intended period of employment is three years (my H-1B visa is three years by the way). My invitation letter also states that the project is expected to be for a minimum of two years.
However, my initial contract (and all subsequent contracts) was for one-year. My invitation letter was for one year as well. Yes, it states the project is expected to be for a minimum of two years, but this is not guaranteed because is depends on the funding and my performance.. etc. Additionally, my employer believes there was no expectation to exceed two years, and the three-year thing in my visa petition is just a routine done by the university for everybody to decrease the amount of possible future paperwork. The employer sent my auditor a letter indicating all of this to support my case, but the auditor is still inconvenienced.
Now, who is right, the auditor or me? Should I appeal? I appreciate you help. Thank you!