The 183-day rule is used in many countries to determine someone’s tax residency for a particular year. If you spend 183 days or more maintaining a place of residency in a location during the tax year, you are considered a resident for tax purposes in areas like Washington D.C.

The IRS uses a formula that considers your presence in the current year, along with a fraction of your presence in the two prior years. You are considered a resident if you were physically present in the US for at least 31 days during the current year, AND a total of 183 days during a three year period, including all days present in the current year, 1/3 of the days present in the year prior, and 1/6 of the days present in the first year.

There are exceptions to the 183-day rule, such as students and certain foreign workers.

The 183-Day Rule and Whistleblowing

Whistleblowers can play an instrumental role in exposing evasion of the 183-day rule.

On June 3, the District of Columbia Office of the Attorney General (OAG) made a landmark announcement. The billionaire founder of MicroStrategy Incorporated, Michael Saylor, settled a tax fraud lawsuit for a staggering $40 million. This case, stemming from a qui tam whistleblower suit filed under the District’s False Claims Act, marks a significant milestone in the fight against tax fraud. The OAG declared this as the largest income tax recovery in D.C. history, underscoring the importance of this case. Read more about the case here.