If you are an immigrant in the United States, it is important that, as you prepare for the tax season, you understand how your tax returns can affect your current or future immigration status.
A common misconception is that undocumented immigrants do not pay taxes. The reality is that immigrants have tax responsibilities just like any U.S. citizen regardless of their immigration status. Individuals living in the United States, whether lawfully or not, who earn income above a certain amount are required by law to file tax returns even if the income earned is a result of unauthorized employment. As a result, every year immigrants pay billions of dollars in the U.S. tax system. Filing taxes is not only necessary to comply with U.S. tax law, but it is often necessary to obtain, or maintain, lawful immigration status. This article will explain how immigrants can file taxes without a social security number, and the importance of correctly filed taxes for immigration purposes.
Filing Taxes Without a Social Security Number
Immigrants with or without lawful immigration status may wonder how to file their taxes or how to jointly file with a spouse if they do not have a Social Security number. Immigrants that have not been issued a Social Security number by the Social Security Administration may apply for an Individual Tax Identification number, or ITIN, through the IRS to file their tax returns. An ITIN is a tax-processing number issued by the Internal Revenue Service (IRS) to ensure that immigrants pay taxes even if they do not have a Social Security number (SSN) and regardless of their immigration status. While the ITIN serves as a tool to allow compliance with U.S. tax law, it does NOT provide lawful immigration status or work authorization. Immigrants who file their taxes with an ITIN can do so without fear of deportation, as the IRS doesn’t report their illegal status to immigration authorities.
Generally: Tax Returns for Immigration Purposes
Tax returns can be used to help you (1) prove good moral character needed to qualify for U.S. citizenship and relief during removal proceedings, (2) document length of residence in the U.S., (3) support marriage-based green card petitions, and (4) qualify for lawful immigration status through future immigration reform. Generally, correctly filed taxes demonstrate that you are a person of integrity, law abiding, and worthy of leniency. Therefore, even if you do not currently have an immigration case or do not yet qualify for immigration relief, it is often very advantageous to have proof of compliance with U.S. tax laws, should options for immigration status become available in the future.
Tax Returns for Naturalization and Good Moral Character
In order to become a Naturalized U.S. citizen, applicants must prove they are a person of good moral character (GMC). Immigration law does not define good moral character but it is understood to mean that the applicant is law abiding and a person of integrity. Issues that have the most influence on “good moral character” include an applicant’s criminal background, payment of child support (even if not court ordered)*, and payment of taxes.
If immigration officers discover that that you have not paid taxes or owe back taxes, your citizenship application may be denied. Providing false information on tax returns can also provide grounds for denying a citizenship application.
If you owe taxes, you can possibly avoid a denial by entering into a payment plan arrangement and providing proof of the arrangement and compliance with its’ terms. If you filed incorrectly, taxes can be amended going back three years. Immigration officers should favorably factor your efforts to rectify your tax errors into their decision regarding whether GMC has been demonstrated.
Tax Returns for Relief in Immigration Court
The U.S. government will consider your moral character in almost every situation in which immigration benefits are being sought- especially during deportation proceedings. Cancellation of Removal for Non-Permanent Residents, is a form of immigration relief only available during deportation proceedings that can result in permanent resident status if approved by an immigration judge. Like applications for Naturalization, applications for Cancellation of Removal for Non-Permanent Residents explicitly requires prove of GMC. To be eligible, the applicant must also demonstrate at least ten years of residence, amongst other requirements. Tax returns can demonstrate both requirements- that the applicant has satisfied the length of residence requirement and GMC.
Tax Returns for Applications for Marriage-Based Green Cards
The most common way immigrants qualify for a green card is through marriage to a U.S. citizen or Lawful Permanent Resident. To demonstrate eligibility for a green card based on marriage, the applicant must prove to the U.S. government that their marriage was entered in good faith. Therefore, the applicant will need to submit sufficient documents supported by credible testimony during an interview, that demonstrate their marriage is really a good faith or “bona fide” marriage. Jointly filed tax returns can be used to demonstrate a good faith marriage because it indicates joint financial commingling and responsibility for liabilities.
Married couples may file a joint tax return or separate returns with the status of married. Married couples filing separate tax returns with the incorrect filing status of single or head of household may be used by USCIS as evidence of a fraudulent marriage, resulting in a denial of a green card and the initiation of removal proceedings.
Additionally, petitioners, household members signing form I-864a, and co-sponsors, must submit tax returns when sponsoring a family member, to prove ability to financially support the sponsored immigrant relative with income at least 125% above poverty guidelines. This is another opportunity for immigration officials to examine tax returns and potentially find incriminating or harmful information.
Tax Returns For Future Immigration Relief
Future avenues to lawful immigration status created through immigration reform effort may also explicitly require proof of properly filed tax returns. President Joe Biden highlighted immigration reform as one of his administration's top priorities. Within his first days of presidency he introduced a bill, the American Dream and Promise Act 2021, that would provide a pathway to citizenship to DACA recipients, and other undocumented immigrants. One of the eligibility criteria is proof of filed income taxes. Although this bill has not become law, immigrants should still file taxes and stay in compliance with law to improve chances of eligibility for future forms of relief.
Effects of Improperly Filed Tax Returns for Immigrants
Improper tax returns could cost a lot of money and can jeopardize your current or future immigration status. If an immigration officer determines that you have committed tax fraud, it could lead to a denial of an immigration benefit, removal (deportation), and serious civil and criminal penalties.
Because it is likely that your tax returns will be the subject of a current or future immigration application, it is very important to timely file your taxes and seek help from qualified tax professionals.
If you have any question regarding how your income tax returns may affect your eligibility for immigration benefits, please contact our office, The Law Office of S.A. Peterkin, at 321-325-1125 for a consultation to talk with a licensed and experienced immigration attorney.