Immigration and Lying on your Tax Return: The Quickest way to deportation.

Lying on tax return as an immigrant.

The IRS has identified a rise in the number of immigrants who routinely lie on their tax returns in order to secure large refunds to which they are not entitled. To address this trend, the IRS has vowed to heighten scrutiny with the commitment to go after these taxpayers with vigor. As such, you will see increased civil, and in certain cases, criminal penalties being assessed on the perpetrators.

As an immigrant, lying on your Federal Tax Return can also have other consequences such as; denial of citizenship during the naturalization process and deportation.  Immigration law considers tax fraud to be a crime of moral turpitude and an aggravated felony, which upon conviction can result in the commencement of removal proceedings and deportation. Immigrants include individuals who are here legally such as those with student visas as well as lawful permanent residents.

Some of the things that the Internal Revenue Service has been focusing on include; under-reporting income, fabricating expenses and claiming refundable tax credit.

False claims by taxpayers include:

1. Claiming increased federal and state withholding which does not correspond to the taxpayer’s W-2;
2. Claiming additional child tax credits to which a taxpayer is not entitled to;
3. Claiming additional dependents to which the taxpayer is not entitled to claim;
4. Claiming a false earned income credit;
5. Making up itemized deductions such as medical expenses, charitable contribution and miscellaneous expenses;
6. Claiming false employee business expenses on Schedule A including business mileage and unreimbursed employee business expenses;
7. Filing Form 1040, Schedule C  and reporting made up  income and expenses on a nonexistent business in order to generate a loss;
8. Failing to disclose foreign financial accounts and other foreign financial assets and income from these assets on FinCen Form 114 and Form 8938;
9. Lying on Schedule B, Part III, questions 7(a) and 7 (b) by checking “no”  in response to questions concerning the existence of foreign bank accounts and the obligation to file FinCen Form 114 (FBAR); and
10. Obtaining a false social security number and filing an income tax return, while at the same time, applying and receiving government benefits using the individuals actual social security number.

The above list is only a partial list of things that some immigrants routinely lie about on their tax returns.

It makes no difference whether you self-prepared your tax return or you went to a questionable tax preparation firm to have your return prepared. If you signed the return under “penalty of perjury” you are responsible for its contents. “Willful Blindness” is not a defense.

My office handles hundreds of offshore disclosure cases a year and I routinely come across the above irregularities when reviewing taxpayer returns.  If your return was prepared by a third party and the tax return was filed as “self-prepared,” you can be certain that the return is inaccurate and contains material misrepresentations and omissions.  If you received a large refund, do not assume it is the generosity of the U.S. Government. There is chance that the refund was generated through fraud.

Remember, you have invested a great deal of time and money in order to pursue your dream in America. Processing your status from visa, to permanent resident and ultimately, to naturalization is a great accomplishment. Lying on your taxes is the fastest way to denial of citizenship and in some cases, a one way ticket back to your home country. It’s not worth it!