Employment Tax Enforcement, Denaturalization, and Expatriation: Key Takeaways from the Criminal Tax Panel

The Department of Justice has increasingly aligned its tax enforcement priorities with immigration enforcement, creating a complex and evolving landscape for naturalized U.S. citizens and the practitioners who advise them.

In a new article published in ABA Tax Times, Chamberlain Hrdlicka Associate Tori Harrigill examines the key developments shaping this area of law, drawing on discussions from the Employment Tax, Immigration, and Denaturalization panel at the 2025 Criminal Tax Fraud and Tax Controversy Conference, moderated by Chamberlain Hrdlicka's Larry Campagna.

The article covers the statutory basis for denaturalization under 8 U.S.C. §1451(a), which permits revocation of citizenship obtained through concealment of material facts or willful misrepresentation. It then turns to the DOJ's 2025 Denaturalization Initiative, which directs prosecutors to prioritize civil denaturalization proceedings across a broad range of categories — including tax fraud, financial crimes, and undisclosed felonies — with a notably lower burden of proof than criminal cases require.

Harrigill also addresses the significant tax consequences that can flow from denaturalization, including the potential application of the expatriation tax regime under IRC §877A, which may impose a mark-to-market tax on a covered expatriate's net unrealized gains even where the individual is not deported. The article concludes with an analysis of the April 2025 Memorandum of Understanding between the IRS and ICE establishing procedures for sharing taxpayer information in connection with criminal immigration enforcement — an agreement currently under appeal before the U.S. Court of Appeals for the D.C. Circuit.

For practitioners advising clients at the intersection of tax, immigration, and criminal law, this article is essential reading.

Read the full article in ABA Tax Times: HERE