It’s tax season and Subhan Law Office, LLC, wants to share with immigrants, their rights and obligations under U.S. federal tax law. The taxation of immigrants by the United States is significantly affected by the immigration status of such immigrants. Although the immigration laws of the United States refer to aliens as immigrants, nonimmigrants, and undocumented (illegal) aliens, the tax laws of the United States refer only to “resident aliens” and “nonresident aliens”. In general, the controlling principle is that resident aliens are taxed in the same manner as U.S. citizens on their worldwide income, and nonresident aliens are taxed according to special rules contained in certain parts of the Internal Revenue Code.

Legal permanent residents (also known as green card holders) must file an IRS Form 1040 each year by April 15th. If you are a green card holder and have foreign bank accounts, you must declare those accounts on a Report of Foreign Bank and Financial Accounts or FBAR on or before June 30th of the year following the calendar year being reported. The civil penalty for willfully failing to file an FBAR can be as high as the greater of $100,000 or 50 percent of the total balance of the foreign financial account per violation. This is a hefty fine and many immigrants do not understand their obligations under U.S. tax laws. Also, if you fail to file your United States taxes as a green card holder, you may hurt your chances of becoming a U.S. citizen. Additionally, if you intentionally do not file your taxes, you may also be guilty of a crime which could result in the loss of your immigration status and your deportation. There are measures to help immigrants and U.S. citizens alike to avoid these serious civil and or criminal penalties such as the Offshore Voluntary Disclosure Program.

Holders of nonimmigrant visas may or may not have to report income and pay taxes to the United States Government. Holders of nonimmigrant visas only become tax residents if they spend at least 183 days of the current year within the United States. A nonresident alien/nonimmigrant visa holder (with certain narrowly defined exceptions) is subject to federal income tax only on income which is derived from sources within the United States and or income that is effectively connected with a U.S. trade or business. Therefore, nonimmigrants are not subject to tax on their worldwide income such as U.S. citizens and legal permanent residents.

Subhan Law Office, LLC, assists U.S. citizens, dual nationals, legal permanent residents, and nonimmigrants with understanding their rights, obligations, and responsibilities as a U.S. taxpayer. Our firm helps clients navigate the complexities of the federal laws in order to stay in compliance and avoid serious civil and or criminal penalties under the U.S. federal tax laws. To learn more about your rights and obligations and or if the Offshore Voluntary Disclosure Program is right for you, contact us at 414-223-5718 or toll free at 1-855-946-6848.