IRS proposes new citizenship disclosure questions on tax forms

The Internal Revenue Service (IRS) is drafting new tax forms for the upcoming tax season that may require taxpayers to disclose their citizenship or work authorization status. The proposed changes to the Form 1040 include a yes-or-no question asking filers and their spouses if they are U.S. citizens, U.S. nationals, or aliens lawfully authorized to work in the United States.

This move aligns with plans from the Treasury and the IRS to tighten oversight on refundable individual income tax credits. Under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, certain federal benefits—such as the earned income credit, additional child tax credit, and American opportunity credit—are reserved for U.S. citizens, nationals, and qualified aliens, including lawful permanent residents, asylees, and refugees.

Tax experts have raised concerns regarding data privacy and potential sharing of information with other federal agencies. There are also fears that the requirement could deter non-citizen filers from complying with tax laws. Officials estimate that between 200,000 and 700,000 taxpayers may be ineligible for these credits due to status requirements, potentially saving the government between $700 million and $2.6 billion. Experts warn that providing false information on these federal documents could result in perjury charges, impacting future citizenship or visa applications.