Recent updates highlight a serious risk for green card holders who have become U.S. citizens: starting July 2025, those found to have under-reported income on their tax returns could face the loss of their citizenship. This development does not introduce a brand-new law, but it signals a stronger focus on tax compliance during and after the naturalization process. The rules are detailed and involve both tax and immigration authorities, making it important for green card holders and U.S. citizens to understand what’s at stake, how the process works, and what steps they should take to protect their status.
Summary of the Change
As of July 2025, the U.S. government is paying closer attention to the tax records of green card holders who apply for citizenship and those who have recently become U.S. citizens. If someone is found to have willfully under-reported income on their tax returns—meaning they intentionally left out income to pay less tax—this can be seen as fraud or misrepresentation. In these cases, the government may start a legal process to take away that person’s citizenship, a process called denaturalization. While this is not a new law, it reflects a stronger push to make sure everyone follows the rules, especially when it comes to taxes.
Who Is Affected
This update mainly affects two groups:
- Green card holders (lawful permanent residents) who are thinking about applying for U.S. citizenship.
- New U.S. citizens who got their citizenship through naturalization.
Both groups must pay close attention to their tax returns and make sure all income is reported correctly. The risk is highest for those who have intentionally hidden income or committed tax fraud, especially if this happened during the years leading up to their citizenship application.
Current Legal and Policy Context (2024-2025)
Tax Filing and Reporting Requirements
Both green card holders and U.S. citizens must file a federal tax return every year, even if they live outside the United States 🇺🇸. The law requires them to report all income earned anywhere in the world, not just income from the United States 🇺🇸. For 2025, the IRS has raised the Foreign Earned Income Exclusion to $130,000, which means that up to this amount of foreign income can be excluded from U.S. taxes if certain conditions are met. However, all income must still be reported, even if it is excluded from tax.
Failing to report income can lead to:
- IRS penalties (fines and interest)
- Audits (the IRS reviews your tax returns in detail)
- Criminal charges (in serious cases of tax evasion)
Naturalization and the Good Moral Character Requirement
When a green card holder applies for U.S. citizenship, they must show that they have “good moral character.” This means following the law, including tax laws. The U.S. Citizenship and Immigration Services (USCIS) will check tax records for the past three to five years, depending on the type of application. Applicants must show proof that they have filed all required tax returns and paid any taxes owed, or that they have made arrangements to pay overdue taxes.
If someone has under-reported income or failed to file taxes, USCIS may decide that they do not have good moral character. This can lead to the denial of the citizenship application. If the problem is discovered after citizenship is granted, it can even lead to denaturalization.
Revocation of Citizenship for Tax-Related Issues
Losing citizenship, or denaturalization, is rare and only happens in serious cases. The government must prove that the person got their citizenship by fraud or by hiding important facts, such as willfully under-reporting income on tax returns. The process is not automatic. The government must give notice and hold a legal hearing, where the person can defend themselves. Only if the government can show clear evidence of intentional wrongdoing can citizenship be taken away.
Green Card Revocation vs. Citizenship Revocation
Green card holders can lose their permanent resident status for certain crimes or immigration violations. However, simply under-reporting income on a tax return usually leads to IRS penalties, not automatic loss of the green card. For U.S. citizens, citizenship is more secure, but it can be challenged if there is proof of fraud or misrepresentation, including in tax matters.
Recent Developments and Official Positions (2024-2025)
USCIS and IRS Coordination
USCIS and the IRS are now working more closely together. When someone applies for naturalization, USCIS checks tax records more carefully and may even review social media accounts. This is to make sure that applicants are telling the truth about their income and tax payments.
Policy Emphasis on Compliance
Legal experts strongly advise green card holders and new U.S. citizens to be completely honest about their tax history. It is important to resolve any unpaid taxes or reporting mistakes before applying for citizenship. This can help avoid delays, denials, or even legal trouble later.
IRS Enforcement
The IRS continues to enforce tax laws strictly. This includes green card holders and U.S. citizens living abroad. Deadlines for filing and paying taxes are enforced, and penalties can be high for those who do not comply.
No New Laws on Citizenship Revocation for Tax Under-Reporting
There have been no new laws or executive orders in 2025 that specifically make it easier to lose citizenship for under-reporting income. The rules remain the same: citizenship can only be taken away if there is proof of fraud or misrepresentation.
Practical Implications for Green Card Holders and New Citizens
For Green Card Holders
- File accurate tax returns every year. This includes reporting all income, even from outside the United States 🇺🇸.
- Understand that failing to report income can lead to IRS penalties. These can include fines, interest, and audits.
- Know that criminal tax evasion can lead to removal proceedings. However, this is not automatic and usually only happens in serious cases.
For Naturalization Applicants and New Citizens
- Provide proof of tax compliance when applying for citizenship. This means showing that all required tax returns have been filed and taxes paid.
- Be aware that under-reporting income or committing tax fraud can lead to denial of citizenship. If discovered after citizenship is granted, it can lead to denaturalization.
- Understand that the government must follow due process. This means there will be a legal process, and the person has the right to defend themselves.
Step-by-Step Process if Tax Issues Affect Citizenship
- IRS Audit or Investigation
If the IRS suspects under-reporting, they may audit your tax returns. If they find problems, they can assess penalties or start a criminal investigation. - Disclosure to USCIS
When applying for citizenship, you must disclose your tax filings and payments. Failing to do so can lead to denial of your application. -
USCIS Review
USCIS reviews your tax compliance as part of the good moral character check. They may ask for copies of your tax returns or proof of payment.
-
Denial or Revocation
If USCIS finds evidence of fraud or willful misrepresentation, they can deny your application or start the process to take away your citizenship. -
Legal Proceedings
Citizenship revocation requires a formal legal process. You will receive notice and have the chance to contest the charges in court. -
Remedies
If you owe taxes, resolve the debt as soon as possible. Setting up a payment plan with the IRS and keeping records of your efforts can help show good faith.
Expert Perspectives
Immigration attorneys stress that full tax compliance is essential before applying for citizenship. Even small mistakes can cause big problems if they look like intentional fraud. Tax professionals advise green card holders and U.S. citizens abroad to keep up with IRS filings and payments to avoid complications. Legal scholars point out that citizenship revocation for tax under-reporting is rare and usually only happens in serious cases involving fraud or hiding important facts.
Examples and Case Studies
Let’s look at a few scenarios to better understand how these rules work in real life:
Case 1: Honest Mistake
Maria, a green card holder, forgot to include a small amount of foreign income on her tax return. When she realized the mistake, she filed an amended return and paid the extra tax. When she applied for citizenship, she included proof of the correction. USCIS saw that Maria acted in good faith and approved her application. This shows that honest mistakes, when corrected, usually do not lead to denial or revocation.
Case 2: Intentional Fraud
John, a green card holder, intentionally left out a large amount of foreign income for several years to avoid paying taxes. He then applied for citizenship and did not disclose the missing income. Later, the IRS discovered the fraud during an audit. USCIS started denaturalization proceedings after John had already become a U.S. citizen. Because there was clear evidence of fraud, John faced the loss of his citizenship.
Case 3: Payment Plan
Sara, a green card holder, owed back taxes but could not pay the full amount. She set up a payment plan with the IRS and kept records of her payments. When she applied for citizenship, she provided proof of the payment plan. USCIS accepted this as evidence of good moral character, and Sara’s application was approved.
Practical Tips for Green Card Holders and U.S. Citizens
- Always report all income, even if it is earned outside the United States 🇺🇸.
- Keep copies of all tax returns and payment records.
- If you make a mistake, correct it as soon as possible by filing an amended return.
- If you owe taxes, set up a payment plan with the IRS and keep proof of your payments.
- Consult a tax professional or immigration attorney if you have questions or concerns.
Official Resources and Where to Get Help
- For information on naturalization and the required forms, visit the USCIS Naturalization page.
- To access Form N-400 (Application for Naturalization), use the official USCIS Form N-400 page.
- For help with tax compliance, payment plans, or questions, visit the IRS Taxpayer Assistance Center.
- If you need legal advice, consider speaking with an immigration attorney who understands both tax and immigration law.
Key Takeaways
- Green card holders and U.S. citizens must file accurate tax returns every year, reporting all worldwide income.
- Under-reporting income can lead to IRS penalties, denial of citizenship, or even loss of citizenship in serious cases involving fraud.
- Citizenship revocation is rare and requires proof of intentional wrongdoing and a legal process.
- Honest mistakes can usually be fixed, but intentional fraud can have serious consequences.
- Staying current with tax filings and resolving any issues before applying for citizenship is the best way to protect your status.
As reported by VisaVerge.com, the government’s focus on tax compliance is not new, but the increased coordination between USCIS and the IRS means that green card holders and new U.S. citizens must be more careful than ever. The best way to avoid problems is to be honest, keep good records, and seek help if you are unsure about your tax obligations.
By following these steps and using official resources, green card holders and U.S. citizens can protect their status and avoid the serious consequences of tax under-reporting. Always remember that accurate tax returns are not just a financial responsibility—they are also a key part of keeping your immigration status secure.
Learn Today
Green Card Holder → A lawful permanent resident authorized to live and work in the United States permanently.
Denaturalization → The legal process of revoking a person’s U.S. citizenship due to fraud or misrepresentation.
Good Moral Character → A requirement for naturalization demonstrating compliance with laws, including truthful tax reporting.
IRS Audit → An official review by the IRS of a taxpayer’s returns to ensure accuracy and compliance.
Foreign Earned Income Exclusion → IRS rule allowing exclusion of up to $130,000 foreign income from U.S. taxation if requirements met.
This Article in a Nutshell
From July 2025, green card holders and naturalized citizens face citizenship risks due to intentional tax under-reporting, as USCIS intensifies tax record reviews alongside IRS enforcement to ensure honest reporting and compliance, making tax accuracy crucial to secure immigration status and avoid legal consequences.
— By VisaVerge.com
