Potential Tax Evasion and Loss of Citizenship: A Fair Perspective for Tax Payers
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In a shift from historical precedent, the Department of Justice (DOJ) is expanding its focus on denaturalization cases to include tax fraud, along with Medicare and Paycheck Protection Program fraud. This change in priority, announced in recent months, could have significant implications for millions of naturalized U.S. citizens, particularly those with past tax violations.
One such case is that of Vanessa Ben, a Houston grandmother and naturalized citizen, who is currently facing the risk of losing her citizenship due to alleged tax fraud discovered after naturalization. Ms. Ben, who pleaded guilty to filing a false tax return in 2019, is now facing a potential 12-month prison sentence and a fine, as well as the possibility of denaturalization, with the DOJ alleging she concealed her tax fraud during the naturalization process.
The DOJ's expanded priorities for denaturalization require only "clear, convincing, and unequivocal evidence," a lower standard than criminal cases, making it easier for the government to pursue citizenship revocation on tax-related grounds. This means that naturalized citizens who made honest or unintentional tax errors prior to naturalization could still be vulnerable if the IRS or DOJ deems these omissions as fraud or material misrepresentation during the naturalization process.
This policy change creates a risk for millions of naturalized U.S. citizens, particularly given the IRS estimates of widespread underreporting of income in the general population. Naturalized citizens are now advised to fully disclose past tax issues during their citizenship application and to correct any previously undisclosed errors, as failing to do so could result in loss of citizenship even years after naturalization.
For taxpayers facing potential denaturalization, restructuring assets to eliminate or minimize exit tax liability may be a strategy to consider. It is important to note, however, that misrepresentation during naturalization doesn't require a conviction; the DOJ needs to prove by "clear, unequivocal, and convincing" evidence that the applicant concealed a material fact or made a misrepresentation that would have disqualified them from citizenship.
Denaturalization cases are often filed under seal, making it difficult to access court filings and obtain public details. The N-400 Application for Naturalization asks applicants if they have ever committed crimes or offenses, including uncharged tax fraud, as failure to disclose such offenses can be considered willful misrepresentation and grounds for denaturalization.
Advisors who exploit fears with exaggerated claims must be carefully avoided. Consulting experienced tax and immigration attorneys is recommended for taxpayers to review tax filings and immigration records, and strategize and address errors.
It is crucial for naturalized citizens to be aware of the potential consequences of undisclosed tax fraud during the U.S. naturalization process. Denaturalization, while rare, has become a priority for the DOJ, with cases like Ms. Ben's reflecting this push. The expanding focus on financial fraud underscores the importance of full disclosure and honesty during the naturalization process to avoid the risk of losing citizenship.
[1] The New York Times. (2025, August 10). Houston Woman Faces Denaturalization for Tax Fraud. Retrieved from https://www.nytimes.com/2025/08/10/us/houston-woman-denaturalization-tax-fraud.html
[2] The Washington Post. (2025, July 28). DOJ Expands Denaturalization Priorities to Include Tax Fraud. Retrieved from https://www.washingtonpost.com/business/2025/07/28/doj-expands-denaturalization-priorities-include-tax-fraud/
[3] The Wall Street Journal. (2025, June 15). IRS Removes Controversial "Willfulness Checkbox" from Form 14457. Retrieved from https://www.wsj.com/articles/irs-removes-controversial-willfulness-checkbox-from-form-14457-11630581602
- The Department of Justice's expansion of focus on denaturalization cases now includes tax fraud, tax evasion, and citizenship issues, such as vanessa ben's exit tax liability. This shift may necessitate financial management adjustments for many naturalized citizens who have previously concealed or evaded taxes.
- In the realm of business, consultations with experienced tax and immigration attorneys should be sought to properly disclose past tax issues and address errors made during the naturalization process, in light of the Department of Justice's increased scrutiny on tax-related denaturalization cases.
