Foreign nationals often ask me if, or most often just assume, that they can be employed by an employer abroad while physically present in the U.S. without a specific work authorization.

Since Congress has never specifically defined “employment” under the immigration laws, and the term in immigration regulations, case law and non-binding policy guidance are incomplete or imprecise, controversy arises.

One could argue that the mere fact that the person is physically present while fulfilling their contractual duties with a foreign employer is too slim to give the U.S. a legitimate interest in applying American law. Particularly since no American workers would be harmed by the work performed under this contract.

However, one could also argue that the answer lies in intersection of immigration and tax law and argue that the IRS’ “Tax Guide for Aliens” determines that any income from services performed for a foreign employer by someone present in the United States is deemed “US source income” unless all three of the following conditions are met:

• The total annual earnings from such services is less than $3,000;
• The physical presence of the person in the U.S. is not more than 90 days per year; and
• The services are performed under contract with a nonresident alien individual, foreign partnership or foreign corporation.

However, some B-1/B-2 visitors or H-4 or O-3 visa holders may be physically present in the United States for longer than 90 days and if they do earn any significant income from a foreign source, this income is be considered taxable “US source income.”

From the immigration perspective, earning any US source income would be considered freelance “self-employment” (since there is no U.S. employer) and it would be considered a visa status violation and then if disclosed on a tax return, and if not disclosed on a tax return, a tax violation.

The foreign employer also faces questions, such as overlapping global mobility issues of tax and local employment and contract laws.

The courts have not decided the issue yet but until they do, please know that U.S. immigration police would probably assert that a nonimmigrant who works from their U.S. home for a foreign employer in fact has violated immigration laws. So be aware.