Understanding How to Qualify For Naturalization When You Owe IRS Taxes

Attorney Caroly Pedersen

Many U.S. Residents (Green Card holders) who owe taxes to the Internal Revenue Service (IRS) mistakenly believe that they are not eligible to obtain U.S. Citizenship, when in fact, most Residents who owe taxes actually remain eligible to apply for naturalization, as long as they meet certain criteria.

The key to successful naturalization for those who owe IRS taxes is in following several basic steps. For background, one of the most important requirements to qualify for U.S. citizenship is to show that you have had “good moral character” in the immediate five years preceding the naturalization application filing (past three years for early naturalization based upon marriage to a U.S. Citizen). Issues that have the most impact on “good moral character” include an individual’s criminal background, payment of child support and payment of taxes.

Many criminal convictions occurring during the “good moral character” period often result in ineligibility. As a general rule, it’s best to wait until at least five years (or three years in the case of early naturalization) have passed since the date of the conviction or completion of probation (whichever is later). For child support, providing documentary proof of continuing payments for child support arrearages, along with proof of current child support payments will often result in Naturalization approval.

When it comes to the issue of IRS taxes, many individuals owe back taxes either because they could not afford to pay for the previous year’s taxes or because of a mistake on their past taxes. Worse yet, the fear of owing back taxes often causes taxpayers to avoid filing a required tax return, which then puts them further and further behind. The best approach is to file all required taxes for previous years and enter into an agreement with the IRS for payment of back taxes owed. Here is what you need to do:

Step#1 File Your Taxes:

If you have failed to file any tax returns for past years in which you were required to file, the first step is to file all delinquent tax returns now. This is required before applying for a payment agreement with the IRS. You should likely get the advice and assistance of an accountant during this process, which costs much less than many imagine. The IRS will then send you a bill stating the taxes owed.

Step#2 Set Up a Payment Plan With the IRS:

The only way to naturalize when you owe back taxes is to enter into a payment plan or installment agreement with the IRS. To do that, you should call the IRS and explain that you owe taxes and want to set up a payment plan and need a formal installment agreement that states the entire amount owed and for which years. Agents are often very understanding and willing to work with you and set the monthly payments as low as possible. Be sure to explain any extenuating circumstances, which negatively affect your income and ability to pay, for instance, any large financial expenditures for medical or other expenses. 

Step#3 Set up Automatic Payments:

Request that the IRS agent set up automatic debits from your bank account. This is the absolute best way to ensure that your monthly IRS installment payments are made on time and the best documentary evidence to prove to the USCIS that you have been making systematic, timely payments on your taxes. The agent will usually ask you what day of the month you want the debit payment made.

Step#4 Make Your Payments:

Make sure that you have enough funds in your bank account each month for your scheduled payments. Save copies of your bank statements each month and mark IRS payments in yellow highlight.

Step#5 Prepare to File for Naturalization!

Once you have your Installment plan and have made a few months (3-6 months) of regular payments, you should be ready to file for naturalization. Once the time comes, you will want to contact the IRS and request:

1) Tax and Wage Transcripts: for the past five years (three years for early naturalization) showing your official taxes filed with the IRS;

2) Payment Transcript: to show all your Installment Agreement payments to date in order to provide documentary proof to the USCIS.

Step#6 File for Naturalization!

Prepare your Naturalization application and file all required documentation, along with a copy of your:

1) Tax and Wage Transcripts: for the past five years (three years for early naturalization)

2) Payment Transcripts showing all your Installment Agreement payments to date 

3) Installment Agreement and 

4) Bank Statements with highlights showing all payments made. 

Once your Naturalization interview is scheduled, you will also want to request an updated payment transcript from the IRS to show all your payments from the date of filing your application until the interview, and bring that along with updated bank statements with highlights showing all payments made while your Naturalization case was processing.

Special note: In cases where a Resident failed to file tax returns in previous years, it is always best to prepare a written, signed statement explaining the circumstances of the failure to file, including any financial or family issues which prevented the timely filing and a statement of regret or remorse for the failure. We successfully assisted Residents who owe back taxes in obtaining Naturalization! Give us a call and schedule a free consultation. Be sure to bring all the IRS tax letters you received and your past five years tax returns so we can go over your case carefully to determine the best approach to achieving your Naturalization. 

 

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