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Financial Issues and Naturalization

by Sheela Murthy et al.

As a result of the troubled U.S. economy, many individuals have encountered financial hardships. For some, these difficulties have led to foreclosure, bankruptcy, and unpaid debts. This, in turn, has generated questions regarding whether various financial problems might affect one's ability to naturalize to U.S. citizenship. Although debt alone does not create a bar to naturalization, there are some financial issues that need to be considered when evaluating the possibility of becoming a U.S. citizen. These concerns are discussed here for the benefit of MurthyDotCom and MurthyBulletin readers.

Eligibility Requires Good Moral Character

Applicants for naturalization must establish that they are persons of good moral character. Good moral character (GMC) evaluations are made by U.S. Citizenship and Immigration Services (USCIS) on a case-by-case basis, taking into account the standards of the average citizen in the community of residence. The N-400 naturalization application, however, does not require a disclosure of debts or even civil lawsuits related to such debts or other matters. The N-400 does not ask for information about bankruptcy or foreclosure. These are simply not part of the good moral character analysis. Accordingly, for many who have faced job loss or other financial problems, these need not be revealed, discussed, or explained in the naturalization context.

There are some aspects of the naturalization process in which financial problems are relevant, as discussed below. Complete eligibility requirements for naturalization can be complex and are beyond the scope of this article. For more information regarding these requirements, please see our article, Basic Eligibility Requirements for Naturalization (15.Feb.2002; updated 19.Nov.2010).

Establish Support of Dependents to Demonstrate GMC

With respect to good moral character, one common matter that has a financial component is willful failure to support dependents. If an applicant for naturalization has a minor child or children who do not live with the applicant, it is necessary to prove that the applicant is providing adequate financial support.

If there is a court order of support, it is important to have evidence of compliance with that order. If there is no such order, it is vital to show appropriate support of one's children. The amount of support considered appropriate varies from case to case. Documented financial hardships potentially can reduce the expected level of support, as failures can be forgiven due to extenuating circumstances.

Proof of support may be in the form of cancelled checks or money orders or other verifiable funds transmission. Other evidence can include provision of necessary items such as food, clothing, and housing as well payments for school and other expenses related to the child. If appropriate, provision of health insurance can be important.

It is vital to demonstrate that the citizenship applicant has not abandoned her/his dependents. This includes the spouse as well as any children. When matters have been addressed only informally, and payments are made in cash, proving that dependents have been provided support can be difficult. Since failure to provide financial support to dependents can result in a finding that one lacks the good moral character needed for naturalization, it is crucial to maintain appropriate financial support of dependents, even during times of financial difficulty.

Failure to Report Income or Pay Taxes

Another financial issue that may preclude a finding of good moral character and/or attachment to the U.S. Constitution is failure to report income to the Internal Revenue Service (IRS), or to state and local taxing authorities. The application for naturalization (N-400) asks whether the individual has ever failed to file a required federal, state, or local tax return. The form also asks whether the applicant owes any overdue federal, state, or local taxes. Responding yes necessitates explaining the situation to the USCIS.

Although gainful employment is not a requirement for naturalization, if an individual has been employed or otherwise generates income, s/he needs to comply with U.S. tax laws as part of the good moral character requirement. Failure to do so may be grounds to deny U.S. citizenship, in addition to the other fines and penalties unrelated to matters of immigration and citizenship. Even if an individual is experiencing financial difficulties, therefore, it is important to keep up with tax obligations or at least make appropriate payment arrangements.

The USCIS instructs applicants with overdue taxes to provide proof of their tax filings and documentation relating to any payment agreements. They also need to prove that they are complying with the payment agreements. The USCIS will review each situation on a case-by-case basis.


Individuals who have faced financial difficulties should not be afraid to pursue naturalization. In most situations, an ordinary debt or even a bankruptcy or foreclosure does not prevent naturalization. Fear or embarrassment about such problems should not prevent one from applying for citizenship, if s/he is otherwise eligible to obtain U.S. citizenship. Due to the wide-reaching impact of the recent economic recession, such problems, unfortunately, do exist.

As discussed, failure to comply with one's legal obligations to taxing authorities and failure to meet legal and moral obligations to dependents can create ineligibility for naturalization. Those with questions regarding naturalization eligibility should arrange to discuss their situation in a consultation with an experienced immigration attorney. Murthy Law Firm attorneys stand ready to assist.

Copyright 2012, MURTHY LAW FIRM. All Rights Reserved

About The Author

Attorneys from the Murthy Law Firm. Sheela Murthy is the founder of the Murthy Law Firm, which consists of approximately 85 full time attorneys, paralegals, and support staff, who provide excellent service in the area of U.S. Immigration Law to clients worldwide. The Murthy Law Firm handles cases ranging from Fortune 500 companies, mid-sized and small companies, to individuals who are undergoing the U.S. immigration process. A graduate of Harvard Law School with an LL.M degree and herself an immigrant, Attorney Murthy understands the complexities of immigration and empathizes with those faced with its challenges

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.

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