Immigration and Taxes

Boston, Massachusetts is beautiful and sunny on this fine Tax Day! Permanent residents, naturalization applicants and others seeking immigration benefits often ask me about tax issues.  As an immigration lawyer, I frankly admit that I know next to nothing about tax law.  But what I do understand are the immigration consequences of certain tax issues such as the following:

  • Naturalization: if you want to apply for naturalization to become a US citizen, you first have to take care of your taxes.  If you failed to file a tax return or claimed to be a non-resident on your tax return, you have a potential problem. If you owe money for income taxes, your application for naturalization may not be approved unless you can provide U.S. Citizenship and Immigration Services (USCIS) with proof that you have entered into a payment plan and that you are current on your payment pursuant to such a plan.  Remember:  tax avoidance is considered an issue of good moral character, which USCIS can use as grounds to deny your application for naturalization, N-400.
  • Green card:  if you are a permanent resident, i.e., you have a green card, you are required to live in the United States.  If you move abroad, you could be deemed to have abandoned your green card.  Therefore, it is good idea to file an income tax return each year, if for no other reason than to document that you are, in fact, living in the U.S.  If you claim to be a non-resident on your taxes, it is considered a presumption that you have abandoned your lawful permanent resident status and could lead to removal proceedings in Immigration Court and, possible, deportation from the United States.
  • Green Card through Marriage: if you are seeking a green card based on marriage to a US citizen or have a two-year green card, your tax returns are important pieces of evidence that USCIS looks at when determining whether your marriage is based on a bona fide relationship. It is essential that your tax return be filed jointly with your spouse and that the address on all your W-2s and your spouse’s W-2s reflects the particular address where you and your spouse claim to be living together in marital bliss. I-751 applicants seeking a petition to remove the conditions on permanent residency will be expected to show joint tax returns.  If your immigration status is dependent on marriage and you are NOT able to file a tax return with your spouse, it is important to consult with an immigration lawyer.
  • Affidavit of Support, I-864:  generally, if you file an affidavit of support, I-864, you must show that you have income equal to 125% of the poverty guideline for the appropriate household size.  The amount of income you have is generally judged based on your adjusted gross income on your Form 1040 for the 3 most recent tax years.  In an earlier blog post, I offered a few other suggestions regarding the I-864, affidavit of support.
  • Citizenship vs. Green card–estate tax problem:  there are many, many good reasons for those with green cards to apply for US citizenship.  Consider that permanent residents are taxed unfavorably for estate purposes as compared with US citizens. The unlimited marital deduction is not allowed for transfers to legal permanent resident spouses.  Tragically, my best friend was diagnosed with brain cancer and past away last year leaving behind his Italian wife who was then a permanent resident. With the help of a kind USCIS immigration officer, I was able to help rush his wife’s citizenship through the immigration system so that his wife could naturalize expeditiously.
  • Out of Status? Undocumented? You should still pay taxes!  In the U.S., you have only three requirements–live, die and pay taxes.  And there is some truth to this old adage. If you are undocumented, have no papers, are living in the US having overstayed your visa, or having entered the US without inspection, I still recommend that you pay income taxes. Even if you do not have a social security number, you are still able to apply for an Individual Taxpayer Identification Number (ITIN) by filing Form W-7 with the IRS.  By paying income taxes, you create a record that you are living in the US.  This record of your continuous physical presence in the United States will be crucial if (when!) President Obama passes Comprehensive Immigration Reform.
  • Never give your tax returns to USCIS or to an Immigration Judge unless you absolutely have to!  I’ve had several immigration cases where USCIS officers have reviewed my client’s tax returns and have tried to draw all sort of unfair conclusions.  When this happens, suddenly, your immigration case turns into an impromptu tax audit conducted entirely by an immigration officer who may have little or no training in the complexities of the tax code.

Enjoy the beautiful weather today here in Boston, but make sure your taxes are in order first.  Good luck!