Pay taxes in anticipation of immigration reform
More News from INQUIRER.net US Bureau
While 11 million undocumented immigrants are nervously anticipating the immigration reform bill pending in the US Congress, the government is happily anticipating the addition of 11 million new taxpayers.
A study by the non-partisan Congressional Budget Office (CBO) projects that the passage of the bill would reduce the US deficit by an estimated $200 billion in the first 10 years and another $700 billion in the second decade.
The CBO study indicates that with 11 million new taxpayers, the United States could substantially reduce its budget deficit in the next 20 years after the law is implemented.
An expected stipulation in the immigration reform bill is the requirement for immigrants to pay back taxes before being allowed to acquire permanent legal status.
Therefore, it would be wise for affected immigrants to start filing returns and paying the corresponding taxes, for past years and in tax years to come. You do not want to be caught in a situation where your tax liability reaches an insurmountable amount that is too high to pay because of added interests and penalties (as high as 25 percent) to the principal tax.
In addition to the interests, the Internal Revenue Service (IRS) imposes two types of penalties: (a) penalty for failure to file a tax return and (2) penalty for failure to pay tax when due. Not being able to pay your tax liability when it is time to do so could hinder your path to immigration legalization.
If you are an immigrant without legal status and you had taxable income for past years but did not file tax returns, you should not worry about coming out in the open and correcting the situation. It is not too late to do so.
I have had clients who did not file their returns for five to six years, and we put them in compliance without a problem. There is no reason to be afraid—all financial and tax information provided to the IRS are in general are not shared with other governmental agencies like the Department of Homeland Security or any law enforcement agency. The majority of hardworking and law-abiding immigrants have no cause for concern.
Be ahead of the game. Before you know it, the new immigration law is before us. The worst situation you may find yourself in is when you are not ready to proceed.
Edgardo M. Lopez, is an Attorney at Law and founder of Tax Release Inc., a tax resolution company. He is admitted to the State Bar of California, the United States Tax Court and a member of the American Society of Tax Problem Solvers. Facebook.com/TheTaxAttorney or email: Ed@taxreleaseinc.com. Toll free (855) 829 4771. Rated A+ by the Better Business Bureau.
Get Inquirer updates while on the go, add us on these apps:
Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94