"Substantial Presence" in the United States is calculated with reference to the guidelines of I.R.C. ? 7701(b)(3). An alien must be present in the United States at least 183 days out of the past three (3) years, calculated in the following manner:
(1) At least 31 days during the current year; and
(2) 183 days calculated as follows:
a. All days present during the current year = 1
b. All days during prior year = 1/3
c. All days during second preceding year = 1/6.
Documenting the Substantial Presence Test
Documenting the substantial presence test requires passports, bills incurred while in the States, proof of address for the period of residence, an affidavit from those the alien stayed with, dates when the athlete or entertainer was resident in the United States and the purpose for those visits.
It is important to start documenting these items early. The IRS will send a withholding letter in advance of a bout, athletic competition or scheduled tour event. The management company, promoter, or other third party will have to backup withhold 30% if the proper documentation is not available and a letter cannot be obtained from the IRS sufficiently in advance of the event.