Visa Holders and Tax Violations

In the United States there are a set of federal immigration laws that regulate how an individual from outside the United States may qualify to enter and remain in the United States. There are many different kinds of temporary and permanent visas that a non-citizen may qualify for.

Thus, if you or a family member are immigrating into the United States, it is important to have a thorough understanding of immigration laws and how they can affect entry and stay an individual’s in the United States.

In addition to entry into the United States, immigration laws also deal with under what circumstances that individual may be removed or deported. In the United States, there are a large number of immigrants who already reside legally on either a green card or permanent visa. Those immigrants which are already present must abide by the laws and avoid any illegal activities that may bring about a deportation action.

What Is Legal Immigration?

Legal immigration refers to the legal process in which a non-citizen enters and remains in the United States. In other words, the non-citizen goes through a legal process to become a green card holder. It is important to note that a permanent resident status may be granted to certain classes of persons who go through the legal immigration process. The permanent resident status is an important step that needs to be taken towards obtaining permanent U.S. citizenship.

As far as the immigration process goes, most green card holders start off with a temporary visa and then work towards having their residency status changed to permanent resident status after a period of time. When an individual obtains permanent residency status that individual may work at any job legally in the United States, as well as own personal property.

Additionally, permanent residents do not have to return to their home countries after the expiration of a period of time. Further, permanent residence status can result in an individual being able to apply for full U.S. citizenship. Once full citizenship is obtained, an individual would then have the full set of individual rights that the United States has to offer under its laws and Constitution.

Full U.S. citizenship rights include rights such as

• The right to vote in both local and national elections;
• The right to petition immigration authorities for other family members to enter and remain in the United States; and
• The right to travel and live in other countries without losing the right to return back to the United States.

Can Non-citizens be Subject to Tax Violations?

There are numerous people who are under the impression that non-citizens don’t have to pay taxes. Although in some instances the impression is true, there are many circumstances in which a non-citizen may be required to pay taxes.

Further, a failure to pay taxes in those situations can result in legal penalties for the non-citizen, which can even result in their deportation or removal. Removal, which was formerly known as deportation, is the legal process in which a non-citizen is removed from the United States and transported back to their country of origin.

It is important to understand that the laws governing taxes for non-citizens are different depending on whether the person holds a non-immigrant visa or whether they hold a green card. The distinction between the two is that green card holders are automatically considered to be a “tax resident,” while non-immigrant visa holders are not considered to be a tax resident.

If you are a nonimmigrant visa holders, the tax rules are as follows:

• Depending on the amount of time spent in the United States in a given tax year, a non-immigrant visa holder may be classified as a tax resident. A non-immigrant visa holder must have been in the United states for at least half the tax year. In other words they must have remained in the United States for at least 183 days to be considered a tax resident;
• For non-immigrants who have spent less than 30 days of the current tax year in the United States, they may still be considered to be taxable residents if they have been in the United States for a “weighted” total of at least 183 days in the past 3 years. Determining whether or not days count toward the weighted total can be complicated. The formula for determining weighted days is that one day in the current year counts as one day, one day in the previous year counts as one-third of a day, and one day in the year before that counts as one-sixth of a day;
• A non-tax resident may also still be required to file taxes if they are not paying taxes in a different country. This is known as not having a “tax home” in another country. In such cases, the Internal Revenue Services (“IRS”) may list the United States as the nonimmigrant visa holder’s tax home. If the IRS makes the determination that the United States is their tax home, the nonimmigrant would be responsible for filing and taxes; and
• Many tax rules may not apply to nonimmigrant visa holders. For example, if the nonimmigrant visa falls into one of the following occupations, the tax rules may not apply:
  • Nonimmigrants who are working as teachers;
  • Nonimmigrants who are in the United States as students;
  • Nonimmigrants who are working as foreign government employees; or
  • Nonimmigrants who are professional athletes.

For permanent visa holders, otherwise known as green card holders, the tax rules are as follows:

• A green card holder is automatically declared a United States tax resident;
• Green card holders must declare their tax information and income to the appropriate tax agencies and IRS; and
• Failure to furnish tax information to the IRS and appropriate agencies can result in negative consequences down the road should the green card holder choose to file for full United States citizenship. Additionally, a removal or deportation action may happen in extreme cases of tax fraud.

Do U.S. Tax Residents Need to Declare Tax Information From Outside of the U.S.?

It is important to note that if a non-citizen is classified as a United States tax resident, that individual is required to report all of their worldwide income to the IRS. Thus, if the tax resident is generating income outside the United States, that income will need to be declared when they file their tax reports.

Importantly, not all of the reported income will be subject to taxation. Although the income must be disclosed to the IRS, whether or not the income will be actually taxes will be determined on international treaties and United States laws on double taxation. The individual may also be subject to taxation based on whether they are an owner of a corporation.

Thus, it is also important to understand all of the tax credits and deductions in the individual’s state of incorporation. Further, that individual must also understand whether or not their home country of operations is going to tax the corporation based on United States based income, or their worldwide income.

Do I Need a Lawyer for Help With Visa Holders and Tax Violations?

If you are unsure of your current tax classifications, or have any questions regarding whether or not you must disclose and pay taxes in the United States, it may be in your best interests to consult with an experienced immigration lawyer.

An experienced immigration attorney can help you determine your tax status and obligations, as well as provide you with guidance on fulfilling those obligations, if any. Additionally, if you are being summoned to an immigration hearing, especially in cases involving a removal action, an experienced attorney can represent you during the proceedings.