IRS Citizenship Question 2026: Form 1040 Crackdown Hits Now

The IRS citizenship question 2026 proposal would put a check-box for non-US citizens directly on Form 1040, three sources told Reuters this week, as the Trump administration looks for new ways to wire the tax code into its immigration enforcement push.

WASHINGTON, D.C. — 23 May 2026

According to the Reuters scoop published Friday, IRS officials are weighing two versions of next year’s Form 1040. The first is a routine refresh. The second adds one new line: “Check this box if you are a non-U.S. citizen or have dual citizenship.” Treasury declined to comment.

That is a small box with very big consequences. The IRS citizenship question 2026 proposal would, for the first time, ask every filer their passport status on the main individual return. If it lands, it changes what the federal government knows about every American with a second passport, every green card holder, and every accidental American who has spent years quietly filing from abroad.

What is actually in the IRS citizenship question 2026 proposal

Reuters obtained two competing Form 1040 drafts. Draft A is a routine refresh. Draft B adds one new check-box near the personal information block at the top of page one, asking whether the filer is a non-US citizen or holds dual nationality. No separate disclosure schedule, no expansion of Form 8938, no change to FBAR. Just the box. Treasury and the IRS have not said which draft wins.

The IRS citizenship question 2026 proposal does not, on its face, change anyone’s tax liability. The US has always taxed its citizens on worldwide income wherever they live. Green card holders, dual citizens and accidental Americans were already inside the IRS net. What changes is visibility. A structured citizenship field on Form 1040 lets Treasury sort the entire filing population by passport status in seconds.

Why Treasury is doing this now

This does not happen in isolation. Treasury and DHS spent most of 2025 trying to share taxpayer information with ICE. A federal judge in November blocked that pipeline, but the push has not slowed down.

On 19 May, the President signed an executive order titled Restoring Integrity to America’s Financial System instructing bank regulators to treat customer immigration status as a financial-risk factor. The order tells Treasury to issue advisories on red flags including the use of ITIN numbers to open accounts and the “strategic use” of unregistered money services businesses.

Read together with the Form 1040 proposal, the direction is hard to miss. The administration wants two structured datasets, bank customer status and tax-filer citizenship, that line up cleanly with what DHS already holds. The numbers don’t lie. This is enforcement infrastructure being built in plain sight.

What it means for accidental Americans, expats and dual citizens

If you live abroad and file a 1040, you have already been on the IRS radar for years. FATCA hands your foreign bank accounts to the IRS automatically. Form 8938 catches your foreign financial assets. The new Form 1040 check-box does not add a new obligation, but it does add a new flag. Flags drive audit selection.

Accidental Americans take the biggest hit. These are people born to US parents abroad, or born on US soil and raised elsewhere, who may not even hold a US passport but are US citizens by birthright. Many have never filed a 1040 in their lives. Under the IRS citizenship question 2026 design, the gap between who claims US citizenship at a bank and who ticks the new box on Form 1040 becomes a very easy enforcement query.

Dual citizens with a Plan B passport face a quieter problem. A check-box that says “yes, I hold dual nationality” makes a future expatriation decision easier for the IRS to anticipate. Once your second passport is on file, the agency knows you have an exit route. And it can move first.

The exit-tax connection nobody is talking about

Here’s the kicker. The US exit tax only bites if you qualify as a “covered expatriate” under IRC §877A: net worth above $2 million, average annual US income tax above $211,000 over five years, or failure to certify five years of compliance on Form 8854. For 2026 the mark-to-market exclusion is $910,000.

A structured citizenship field on Form 1040 makes it trivial for the IRS to build a covered-expatriate prospect list, ready before anyone files Form 8854. Combine it with the Federal Register notice in March that slashed the renunciation fee from $2,350 to $450, and the direction is clear: make it cheaper to leave, easier to track who is leaving, and faster to bill them on the way out. The same logic applies to exit-tax conversations in the EU.

Frequently asked questions

The bigger pattern here matters more than any single check-box. Treasury, DHS and the IRS are quietly rebuilding US enforcement around structured datasets that can be cross-referenced in real time. Anyone with a second passport, an offshore account or a real Plan B should expect more of this, not less. We cover what comes next on the Liberty Mundo tax desk, and the broader cross-border picture in our coverage of FATCA enforcement and the Portugal nationality law. Plan early. Document everything. Move before the box appears.