“As used in this chapter, the term “United States person” means any United States citizen or alien admitted for permanent residence in the United States, and any corporation, partnership, or other organization organized under the laws of the United States.”
The terms “United States Person” and “United States Citizen” are distinct legal concepts with specific meanings under U.S. law, particularly in the context of taxation and jurisdiction:
United States Person:
- A “United States Person” is a broader category defined under U.S. tax law (specifically under the Internal Revenue Code) to include:
- U.S. citizens, whether living in the United States or abroad.
- Individuals who are lawful permanent residents (green card holders) of the United States.
- Individuals who meet the “substantial presence test,” which determines residency based on the number of days physically present in the U.S. over a period of years.
- Certain entities (such as corporations, partnerships, trusts, and estates) formed or organized under U.S. laws or with substantial U.S. ownership or control.
- In essence, a United States Person includes both citizens and residents (including green card holders) who have tax obligations to the U.S. government.
United States Citizen:
- A “United States Citizen” specifically refers to an individual who holds citizenship by birth or naturalization in the United States. Citizenship can be acquired by birth within the United States or its territories (jus soli) or through birth abroad to U.S. citizen parents (jus sanguinis).
- U.S. citizens have specific rights and responsibilities, including the right to vote in federal elections, the right to live and work in the United States, and the obligation to pay taxes on worldwide income regardless of where they reside.
Key Differences:
- Scope: United States Person includes both citizens and certain residents/entities for tax purposes, while United States Citizen refers specifically to individuals with citizenship status.
- Legal Obligations: U.S. citizens have legal rights and duties that extend beyond tax obligations, including voting and protection under U.S. law, whereas U.S. Persons primarily deal with tax responsibilities.
- Tax Implications: Both citizens and certain residents (as U.S. Persons) are subject to U.S. tax laws, but the specifics of reporting and obligations can differ based on residency status and citizenship.
Understanding these distinctions is crucial in legal and tax contexts, as they determine rights, obligations, and liabilities under U.S. law.
United States Person, defined;
Financial Crimes Enforcement Network (FCEN)