Questions about Form 8802 for foreign withholding - Japanese income

Thanks for the info! I have a similar situation but with a Korean company. Do you know if I need to get a new Form 6166 every year or is it a one-time thing? Also, does anyone know if the Form 8802 process can be done online or is it still paper-only?

You'll need to apply for a new Form 6166 each year, unfortunately. The certification is only valid for the specific tax year(s) you request on Form 8802. The IRS does offer an online option now through the e-File services, which is faster than the mail-in process. You can submit Form 8802 electronically and pay the user fee online. Some people still prefer the paper option, but I've found the electronic submission to be much more efficient. Either way, plan for that processing time - the IRS doesn't rush these applications!

How long did the whole process take from using taxr.ai to actually getting your withholding reduced? My German client is withholding 15% and I'm wondering if this would work for me too.

Does taxr.ai handle state tax residency issues too? I split my time between two states and I'm worried this might complicate my Form 8802 application since it's about proving where you're a resident.

From using taxr.ai to getting my withholding reduced took about 7 weeks total. This included the 5 weeks for the IRS to process my Form 8802 application and issue Form 6166, then another 2 weeks for my Japanese client to implement the reduced withholding. And yes, this would absolutely work for your German situation - Germany has a tax treaty with the US that should reduce that 15% significantly. Yes, taxr.ai does handle multi-state residency situations. That was actually one of my concerns too since I had moved mid-year. Their system helps you document your primary tax residency properly on the application, which is crucial since the IRS checks this carefully before issuing Form 6166. They have specific guidance for digital nomads and people who live in multiple states.

How does this Claimyr thing actually work? I don't understand how they can get through when no one else can. Seems kinda sketchy that they can magically bypass the IRS phone system...

I've called the IRS international division at least 20 times over the past month and always get disconnected. This sounds too good to be true. Has anyone else verified this actually works? I'm desperate to resolve my Form 8802 issues but don't want to waste more time on something that doesn't work.

It uses a combination of automated calling technology and what they call "virtual queueing." Basically, their system navigates the IRS phone tree and waits on hold so you don't have to. When it finally reaches a human representative, you get a call connecting you directly. There's nothing sketchy about it - they're just using technology to solve the hold time problem. I was extremely skeptical too, which is why I shared that video link showing how it works. I was preparing to wait months for a response to my Form 8802 questions by mail, but after actually speaking with an IRS international tax specialist, I got everything sorted out in one call. The specialist even gave me her direct extension for follow-up questions about my specific situation. Trust me, after weeks of failed attempts to reach anyone, I was amazed when it actually worked.

Do you know how far back they check your tax compliance history? I had some issues in 2022 that I'm still sorting out with the IRS. Will that automatically disqualify me from getting Form 6166 approved?

They typically check the tax year you're requesting certification for, plus the two previous tax years. So if you're requesting Form 6166 for 2025, they'll check your compliance for 2023 and 2024 as well. Having an issue with 2022 shouldn't automatically disqualify you, especially if you're working with the IRS to resolve it. The key is that you've filed all required returns, even if there's an ongoing dispute about the content. If you have an installment agreement or other formal resolution in process, you should be fine. What they're mainly looking for is people trying to get treaty benefits while ignoring their US tax obligations.

Yes, you can potentially get a refund, but it's not through the IRS - you'll need to file a tax refund application directly with Japan's National Tax Agency using their form "Application Form for Refund of Tax on Income" (Form 11). You'll need to attach your Form 6166 (which you get after filing Form 8802) along with documentation of the withholding from your Japanese client. The process can take 3-6 months, but I've successfully received refunds this way. Japan's fiscal year is different from the US, so timing is important. I recommend applying as soon as you receive your Form 6166.

Thanks so much for this information! I had no idea there was a separate process for getting refunds from the Japanese tax authority. Do you happen to know if there's a time limit for requesting these refunds? I've been dealing with this withholding for almost two years now.

Yes, there is a time limit! For Japanese tax refunds, you generally have 5 years from the end of the tax year when the withholding occurred to file for a refund. So if withholding happened in 2023, you'd have until the end of 2028 to apply. However, I'd recommend acting sooner rather than later because the Japanese National Tax Agency sometimes requires additional documentation that can take time to gather. Also, exchange rates can affect the refund amount you receive, so timing can impact your actual dollar recovery. Make sure to keep detailed records of all payments and withholding amounts - you'll need these for the Japanese refund application along with your Form 6166 from the IRS.

This is really helpful timing advice! I wish I had known about coordinating with quarterly periods earlier. Quick question - when you mention filing Form 1116 for the Foreign Tax Credit, does this apply even if I successfully get the withholding reduced to 0% through the treaty? Or is Form 1116 only needed when there's still some withholding happening at the reduced rate? Also, for anyone else reading this, does the timing coordination work the same way with other countries, or is the quarterly adjustment period specific to how Japanese companies handle their tax withholding?