Does it really matter whether a payee is a non-resident alien when making a refund via the disbursement voucher?
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In most cases, the answer to this question is no. HOWEVER, there are cases when it
might be important because the refund may be considered taxable income. For example: if
books (for course work) were purchased by a non-resident alien student and the university
also received payment for the same books from the student's government, the student would
be entitled to a refund. When processing the refund to the student in a case such as this,
it is important to distinguish on the disbursement voucher whether or not the student is a
non-resident alien for tax reporting purposes. However, the same student could purchase a
sweatshirt and return it for a refund. In this case it would not be important to know
whether the student was a non-resident alien.
This is one of those cases where the answer is: "it depends on the
situation." Theo Wu at (812)856-5424 in the FMS tax
area, is available to help clarify any gray areas.
Document Information:
File Name: kb-242
Date: 06/2007
User: kbrand
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