As the immigration reform debate heats up again in Washington a common requirement under all of the current legalization proposals being discussed is the filing and payment of taxes and back taxes by those seeking to regularize their immigration status.  Under current laws, all immigrants residing and working in the United States are generally required to file income taxes. Besides the legal requirement, there are other good reasons to file income tax returns, including eligibility for citizenship and other immigration benefits and potential tax refunds, credits or exemptions.  Tax filing may be used as evidence of physical presence in the United States and it also demonstrates good moral character and compliance with existing laws. Each will most likely also be a requirement towards a path to citizenship under new immigration legislation.

Most undocumented immigrants living and working in the United States are required to file an income tax return to report their U.S. earnings. For the most recent 2012 tax year, a single individual under 65 with no dependents must generally file a tax return if his or her income was above $9,750 on their W-2 form(s) as a regular employee. Individuals who are independent contractors, including those who are self-employed and receive a 1099 form or whose employer does not report their income to the IRS, are required to file a tax return if they earned more than $400 last year. Those who do file a tax return may be eligible for a tax refund if taxes have already been deducted from their salary, may be eligible to claim the Child Tax Credit or exemptions for dependents.

To file a tax return, individuals who are not eligible for a Social Security number must apply for and use an Individual Tax Identification Number (ITIN). An ITIN is a nine-digit number issued to people who are not authorized to work in the United States but need to report income. An ITIN is used only for record keeping purposes and for filing taxes. One must complete a W-7 form and file it with their tax return to get an ITIN for the first time. Afterwards, the ITIN may be used to file future returns and also for opening a bank account, taking out a mortgage or for other financial transactions. The IRS recently changed the process and requirements to obtain an ITIN. Applicants must now present original identification documents to apply and the ITIN must be renewed every five years. More information on the ITIN is available on the IRS website at http://www.irs.gov/Individuals/Individual-Taxpayer-Identification-Number-(ITIN).

The IRS does not currently share any information from taxpayers with other government agencies due to privacy provisions in the tax laws. It is also not in the IRS’s tax collection interest to disclose any information to the immigration authorities, since it will discourage those who are undocumented from filing tax returns.

“In preparation for any future legalization program it is in everyone’s best interest to be filing their taxes and reporting their income to show how long they have been living here and that they are supporting themselves and their family while paying their fair share,” according to John A. Stahl, Esq., Director of Immigration Legal Services at the Emerald Isle Immigration Center.

Lawful permanent residents, or green card holders, must also demonstrate that they have complied with the tax laws to apply for US citizenship and to maintain their permanent resident status. To become an American citizen, they will have to show evidence that they have filed taxes during the five years prior to their application for naturalization or proof that they were not required to file a tax return. Failure to file a required tax return may be considered an act of bad moral character which is a temporary bar to attaining U.S. citizenship.

Last year, the U.S. Supreme Court ruled that a legal resident who makes a false statement on a tax return could not only face tax charges but also automatic deportation. The Court found that a criminal tax violation involving fraud or deceit against the government for more than $10,000 is considered an “aggravated felony” under immigration law. An “aggravated felony” under immigration law  makes a legal permanent resident deportable. This ruling sends a warning to legal immigrants, especially small business owners. For instance, legal immigrants could be deported for failing to report foreign bank accounts as required by the IRS.

NOTE: THE EIIC WILL BE HOSTING FREE PUBLIC INFORMATION SEMINARS AT OUR WOODSIDE AND WOODLAWN OFFICES ON WEDNESDAY, MARCH 13th  AND THURSDAY, MARCH 14th , RESPECTIVELY, FROM 6-8pm.

OUR IMMIGRATION ATTORNEY, IMMIGRATION COUNSELOR AND PRIVATE ACCOUNTANTS WILL BE ATTENDING TO PROVIDE UPDATES AND INFORMATION AND ANSWER QUESTIONS ON GENERAL IMMIGRATION AND TAXES.

FOR FURTHER DETAILS PLEASE CALL THE WOODLAWN OFFICE AT 718-324-3039 OR THE WOODSIDE OFFICE AT 718-478-5502.