Why U.S. Visa Holders Must Be Offshore Compliant 2026

Why U.S. Visa Holders Must Be Offshore Compliant 2026

Why U.S. Visa Holders Must Be Offshore Compliant 

In recent months, there has been a surge in the number of people who are at risk for immigration issues stemming from tax non-compliance. In prior years, for example, taxpayers on a visa, such as an H-1B, L-1, or B1/B2, may have been unaware of their tax filing requirements but not too concerned about the impact on their immigration, since enforcement was more lax. Fast-forward to 2026, and with the current administration taking a hard line on immigration issues, taxpayers who are visa holders or at a greater risk of losing the ability to maintain their visa status if they are out of compliance. This is especially true for taxpayers who have undisclosed offshore accounts, assets, and income because there are various international reporting forms, such as the FBAR and Form 8938 that they have to file to report these assets, and the failure to do so can lead to extensive fines and penalties — and impact the ability to renew their visa. Here are a few things to consider for visa holders –

Substantial Presence Test and Worldwide Income

One of the biggest misconceptions for visa holders is that because they are not U.S. citizens or permanent residents, they are not subject to U.S. tax on their worldwide income, but unfortunately, that is incorrect. Taxpayers who have a visa (and even those without a visa) are subject to US taxes on their worldwide income when they meet the substantial presence test, which is essentially a ‘counting days’ test spread over a three-year.

Global Asset Reporting

In addition to having to report worldwide income, taxpayers are also required to disclose their offshore assets, accounts, and investments to the US government on various international information reporting forms such as the FBAR and Form 8938. The failure to report this information can lead to extensive fines and penalties, which can cause other problems for visa holders down the line.

Fines and Penalties

The fines and penalties for failing to report foreign accounts and assets range extensively, depending on which form the taxpayer failed to report the account or asset on, and whether the taxpayer was willful or non-willful. In the past several years, the Internal Revenue Service has made offshore account compliance and enforcement a key priority.

Visa Renewal

If a taxpayer is not taxed or offshore reporting compliant when it’s time to renew their visa, it may result in the US government denying the visa extension or renewal request. With the current administration, especially, taxpayers who are not tax compliant may find themselves in a predicament where the government refuses to renew or extend their visa because they have not properly complied with U.S. tax and reporting requirements.

Green Card Application

In addition, taxpayers seeking to obtain a green card will have to complete certain forms, such as the Form I-485. If the taxpayer is unable to certify that they are compliant with their tax filings and provide these filings to the immigration officer at the time of interview (if required), it lead the denial of a green card.

Naturalization Process

In addition, for taxpayers seeking to naturalize, the U.S. government may request a history of their tax filings. If the taxpayer cannot show that they have completed all the necessary tax filings and international information reporting forms, this may also lead to their naturalization application being denied.

Late Filing Penalties May be Reduced or Avoided

For Taxpayers who did not timely file their international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist Taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs. Prior Year Non-Compliance

Once a Taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, Taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for Taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

*This resource may help Taxpayers seeking to hire offshore tax counsel: How to Hire an Offshore Disclosure Lawyer.

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure.

Contact our firm today for assistance.