Tax Fraud Can Lead to Deportation

by Kenneth Hoffman in

On February 21, 2012, the Supreme Court of the United States issued a decision that may have an important impact on many immigrants in the United States – visa and green card holders alike.  The decision, written by Justice Thomas, isKawashima v. Holder.

As a background note on the workings of immigration law, an alien (a non-U.S. citizen) may be removed from the United States if he or she is convicted of an “aggravated felony” (yes, this even applies to Green Card holding permanent residents, who can be removed from the United States).  The term “aggravated felony” has a specific definition under immigration laws of the United States.  That term includes crimes such as trafficking in firearms, murder, rape, certain crimes of violence, and theft offenses.  And, after Kawashima v. Holder, the term “aggravated felony” also includes certain tax violations, perhaps even misdemeanors.

In Kawashima v. Holder, Mr. and Mrs. Kawashima (who were both permanent residents of the United States) have pleaded guilty to violations under 26 USC §7206(1) and §7206(2), respectively.  Mr. Kawashima pleaded guilty to one count of willfully making and subscribing a false tax return, and Mrs. Kawashima pleaded guilty to aiding and assisting in the preparation of a false tax return.

After a detailed analysis of the law’s language, the Supreme Court decided that an alien becomes deportable when he or she is convicted of a tax violation, and that violation involved intentional fraud or deceit, and a loss to the government exceeding $10,000.  Because Mr. and Mrs. Kawashima’s actions were intentional and fraudulent, and resulted in the government’s loss in excess of $10,000, the husband and wife were found to be deportable from the United States.

So, what does this mean for the average non-U.S. citizen?  Of course, each case is unique, and the courts have yet to apply the Supreme Court’s decision.  Yet, as the dissenting Justices in Kawashima v. Holder pointed out, this decision will probably have very important consequences for non-U.S. citizens.  Specifically, if a person is found guilty of (or pleads to) a tax violation which entails fraud or deceit and a $10,000 + loss to the government, he or she may be deported from the United States.  As Justice Ginsburg indicated, “the Court’s reading sweeps a wide variety of federal, state, and local tax offenses – including misdemeanors – into the ‘aggravated felony’ category.” 

In light of this decision, non-citizens should think twice before pleading guilty to tax violation charges.

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