Yes, the IRS is aware of your tax residency status—whether you are a resident or nonresident alien—which is determined by your time in the U.S. and visa type. While they don't actively monitor your immigration status for enforcement, the IRS can share tax records with immigration authorities (ICE) in specific cases involving criminal investigations or final orders of removal.
the IRS is not the department of immigration and will not communicate to the Immigration authorities about your immigration status, they only care about your obligation to file a tax return and pay your taxes. Undocumented immigrants pay millions of dollars in taxes every year and the IRS wants to ensure they do.
Under FATCA, certain U.S. taxpayers holding financial assets outside the United States must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets. There are serious penalties for not reporting these financial assets (as described below).
August 2025 – The IRS discloses tens of thousands of taxpayer records to ICE, including personally identifying information and home addresses. IRS records revealed in lawsuit showed that ICE requested more than 1 million records from the IRS earlier in 2025.
We may collect personal information about you (such as name, email address, Social Security number or other unique identifier) only if you specifically and knowingly provide it to us. We will use your information to process requests for certain services or information.
While immigration status itself isn't typically a direct focus of standard employment background checks, some employers may carry out specific checks or request information that could indirectly reflect on an individual's immigration status.
Not reporting all of your income is an easy-to-avoid red flag that can lead to an audit. Taking excessive business tax deductions and mixing business and personal expenses can lead to an audit. The IRS mostly audits tax returns of those earning more than $200,000 and corporations with more than $10 million in assets.
The IRS tries to audit tax returns as soon as possible after they are filed. Accordingly, most audits will be of returns filed within the last two years. If an audit is not resolved, we may request extending the statute of limitations for assessment tax.
A much higher proportion of Americans living abroad were audited last year than Americans living in the US – 4.3% of international returns were audited compared to just 0.8% of 'domestic' returns. This illustrates that as an expat the audit risk is significantly higher.
Furthermore, tax treaties with over 40 countries help the IRS identify citizens living abroad who are not filing tax returns.
Failure to report foreign assets and income can attract assessment and also stringent penalties and prosecutions under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. It is crucial for taxpayers to comply with these regulations to avoid legal consequences. 1.
The financial institutions that hold your offshore accounts are required to report them as well. If a foreign bank (or a foreign branch of a U.S. bank) reports an offshore account that you fail to disclose to the IRS or FinCEN, this can have serious consequences.
Customs officers may ask about your immigration status when entering or leaving the U.S. If you are a lawful permanent resident (LPR) who has maintained your status, you only need to answer questions establishing your identity and residency.
Does the IRS Check Every Tax Return? The IRS does not check every tax return. It does not check the majority of them, but the IRS implements methods that track certain factors that would result in a further examination or audit by them.
You are a resident of the United States for tax purposes if you meet either the green card test or the substantial presence test for the calendar year (January 1 – December 31). Certain rules exist for determining your residency starting and ending dates.
IRS audits are triggered by discrepancies the IRS's automated systems catch, like unreported income from 1099s, claiming excessive deductions (charity, business meals, home office) compared to your income bracket, large business losses, math errors, significant income jumps, or claiming hobby losses as business expenses, with higher-income earners generally facing more scrutiny.
Your accountant informs you that he has been interviewed by the IRS. The IRS agent starts copying voluminous documentation rather than simply reviewing the documents you provide, and then returning them. The IRS issues a summons to interview you, rather than simply asking you to come in for an interview.
Owning a small business such as auto dealership, a restaurant, a beauty salon, a car service or cannabis dispensary is an IRS red flag, as they typically have many cash transactions. Red flags are also raised on outliers – businesses with margins that are too low or too high.
The IRS and its authorized private collection agencies will never ask a taxpayer to pay using any form of pre-paid card, store or online gift card. Taxpayers can review the IRS payments page at IRS.gov/payments for all legitimate ways to make a payment.
This background check serves as a security measure to verify that you do not have a criminal record that could affect your immigration application. Different countries and programs, especially those involving vulnerable populations like teaching or volunteering, often require this clearance as part of the visa process.
Your rights
You have the right to remain silent and do not have to discuss your immigration or citizenship status with police, immigration agents, or other officials. Anything you tell an officer can later be used against you in immigration court.