IRS weighs adding a citizenship question to Form 1040: should you check the box for dual citizenship?

The U.S. Internal Revenue Service (IRS) is considering adding a citizenship-status question to the Form 1040 beginning next tax season, Reuters reports, citing three sources familiar with the internal discussions.

One of the two draft versions reportedly includes a checkbox designed to help the IRS distinguish non-U.S. citizens from taxpayers who hold dual citizenship. At this stage, however, there’s been no official announcement about approval steps or timing for implementation.

What the proposed Form 1040 change would look like

According to the sources, the IRS is working on two versions of the next Form 1040. Both are said to include routine updates tied to legislative changes. The difference is that the second version would add a new line stating:

“Check this box if you are not a U.S. citizen or you have dual citizenship.”

Previously, the baseline structure of Form 1040 did not break taxpayers down by citizenship status. If this idea moves forward, it would mark the first time the form has included an element like this.

Separately, The New York Times reports that the IRS is also looking at whether to label ITIN codes differently (Individual Taxpayer Identification Numbers). ITINs are used by people who don’t have a Social Security number to file federal tax returns. The proposed distinctions could be intended to reflect the filer’s immigration status.

The debate centers on dual citizenship—and its downstream effects

Public discussion of the proposal often focuses on undocumented immigrants, since they are still required to file taxes and tax compliance is sometimes used in legalization processes. But the checkbox wording contains a second element as well: dual citizenship.

Estimates suggest roughly 5 million Americans hold citizenship in at least one other country. For people in that category—and for participants in investment migration programs—the checkbox could create a formal trail connecting a tax return to the fact of a second passport. In turn, citizenship data could be captured at the level of information submitted under penalties for perjury (knowingly false statements).

There’s also a broader policy context: the U.S. taxes citizens on their worldwide income regardless of where they live. This approach is often described as among the most extraterritorial systems in the world (Eritrea is commonly cited as the only other country with a similar model).

Since 2010, FATCA (the Foreign Account Tax Compliance Act) has required foreign financial institutions to report account information linked to U.S. taxpayers. A citizenship checkbox would add another layer of self-reporting on top of an already data-driven framework that tracks ties to the U.S. through banking and institutional channels.

Adam Yukhnevich, founder and CEO of Bitcitizen, described the initiative as part of a wider trend: “They used to ask where you earn money. Now they ask what else you belong to. When a tax authority starts tracking your other obligations, citizenship stops being viewed as a relationship and starts being treated like a leash.”

Why it appears to fit a broader enforcement direction

This Form 1040 proposal doesn’t appear to be a standalone move. It aligns with a sequence of actions from the Trump administration aimed at strengthening citizenship verification within financial and administrative systems.

For example, in April, the White House began preparing a draft executive order that would require banks to collect proof of citizenship from customers. This would differ from existing Know Your Customer (KYC) practices, which typically verify identity basics such as name, date of birth, and a confirmed address. The draft reportedly notes that REAL ID documents wouldn’t be sufficient on their own because they don’t, by themselves, establish citizenship status. U.S. Treasury Secretary Scott Bessent said the draft is still being developed: “draft is in process.”

Earlier, in December 2025, Senator Bernie Moreno introduced the Exclusive Citizenship Act, which would prohibit dual citizenship and require U.S. citizens to choose a single passport within a year. GovTrack estimates the bill’s odds are around 3%.

How data-sharing and legal exposure may shape the outcome

Throughout 2025, the U.S. Treasury and the Department of Homeland Security (DHS) worked on sharing sensitive tax data with Immigration and Customs Enforcement (ICE) for deportation-related operations. In November, a federal court blocked the transfer after a lawsuit by Center for Taxpayer Rights, and Washington later filed an appeal.

By February 2026, IRS acknowledged in court that it had mistakenly provided information on more than 42,000 taxpayers to DHS. Disclosing personal data outside narrow legal exceptions can trigger serious penalties, including potential criminal liability.

In April 2025, Yale Budget Lab estimated that reduced tax compliance among immigrant communities—driven by fear of information sharing—could cost the federal budget $313 billion over a decade. The estimates ranged widely, from $147 billion to $479 billion, depending on how taxpayers and employers might change their behavior.

Undocumented workers are estimated to have paid about $66 billion in federal taxes for fiscal year 2023, roughly two-thirds through payroll withholding.

What happens next

As of now, no final decision has been made on whether a citizenship checkbox will appear on Form 1040 next year. Importantly, this kind of change may not require a separate Congressional approval, since the IRS has administrative authority to design the structure of tax forms.

If the checkbox is adopted, taxpayers who acquire a second citizenship—whether through investment, ancestry, or foreign naturalization—could be expected to mark the relevant option when filing their returns alongside other categories of filers. Any selection (or refusal to select) could carry consequences tied to the requirement to provide accurate information under applicable legal standards.

Expert note: “Citizenship” questions on tax forms can also have a practical, behind-the-scenes effect: they may become a data field that IRS systems use for identity matching and risk scoring when verifying returns, processing correspondence, or flagging discrepancies. Even if the IRS doesn’t use the checkbox to determine tax liability directly, adding it can change how records are cross-referenced across agencies and how long certain files remain “under review,” which is a less visible but real operational impact for dual citizens and other mixed-status filers.

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