Taxes question and fake address

Question

Suppose that a non US woman W is married to a US Citizen husband H. W has a green card. W and H live together in Pennsylvania.

Suppose that W's parents in law (L) moved to a nearby state. Suppose that their office is still in Pennsylvania, and they currently work remotely until April.

L uses W&H's address, without W&H's permission, as if it's their permanent home, for everything, including Work, taxes, etc.Their jobs don't know they don't live anymore in the state.

But they don't live with W&H. If this becomes known, could W&H have legal problems? Would it hurt W's path to US citizenship? Is L's action unlawful, and can W&H avoid legal problems?

Answer 1

W&H can avoid legal problems by reporting the suspected crime to the relevant tax authorities (IRS, Pennsylvania and the other state, let us say Ohio). This can even be done anonymously, although doing this non-anonomously provides strong evidence that W&H are not parties to the crime. Filing with a false address could constitute a violation of 26 USC 7206, when one

Willfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter

"Could" comes from two issues. First, L has to not believe that this is their true address, and second, the address has to be a material matter. The tax form and instructions require you to supply an address, but do not define any rules for what can be "an address". The IRS does define a concept of "tax home" which is the city where you work, bit that is relevant only for deductions related to travel. At least w.r.t. federal taxes, it is not obvious that this is a material matter, unless one is relying on state-specific standard sales tax deductions as part of deduction itemization. The government would also have to prove that they did not believe that the PA address is their "home address", a position that is facilitated by the lack of indication of what qualifies as a "home address".

Para 2 of the tax fraud statute might apply to W&H, which target one who

Willfully aids or assists in, or procures, counsels, or advises the preparation or presentation under, or in connection with any matter arising under, the internal revenue laws, of a return, affidavit, claim, or other document, which is fraudulent or is false as to any material matter, whether or not such falsity or fraud is with the knowledge or consent of the person authorized or required to present such return, affidavit, claim, or document

As described, you have not taken an illegal action, e.g. you have not encouraged, condoned, written in false information, etc. What you have done is not reported a possible tax crime that you are aware of. There are various federal laws whereby a person in a "special" position is obligated to report a suspicion of a crime (law enforcement w.r.t. child sexual exploitation, etc), but there is no general legal obligation with criminal penalties whereby you must report a suspected federal crime. This is a good thing, because a criminal conviction can be a conditional bar to citizenship, under the category of Crimes Against the Authority of the Government. Actually lying about L's residence moves this into the area of a well-defined felony offense, 18 USC 1001 (lying in a federal matter), which would clearly cause citizenship problems.

The same set of questions and answers would arise w.r.t. PA and (presumptively) OH tax laws. In this case, though, there is most likely a crime – tax evasion in OH. I say most likely because I don't know if they filed a fully truthful Ohio tax form, or a fully truthful PA tax form. But if they lived in Ohio and yet did not report their Ohio income (and instead filed a PA income tax form), they did not comply with ORC Ch. 5747, esp §08 and §15, which incurs penalties (but is not a crime). As with the matter of federal income taxes, W&H do not have a legal obligation to report suspected crimes, but they must not actively aid in the commission of a crime.

Answer 2

If this becomes known, could W&H have legal problems?

The fact that someone else uses your address as a mailing address and treats it as their permanent address, unilaterally and without your permission, is not itself a crime or even a civil wrong.

The biggest concern would be a conspiracy to make a false statement to a state tax official (the address isn't a "material matter" for federal tax purposes if both addresses are in the U.S.), but the level of intent necessary for there to be a conspiracy when you don't know precisely what the relatives have represented to be true, probably isn't present.

Would it hurt W's path to US citizenship?

Only in the event of conviction of a crime, which is unlikely, but prosecutors and courts do get things wrong sometimes.

Is L's action unlawful, and can W&H avoid legal problems?

Using a family member's address as a mailing address is not unlawful.

Representing that you have a domicile somewhere other than where you actually live is unlawful on their part. And, you don't know if they have done that or not, although you suspect that they have done so.

Writing a letter and keeping a copy and proof of delivery to them stating that you are trying to be entirely above board and strictly legal, particularly in light of your immigration status, and that you do not consent to any false statement on a form or tax return stating that you reside there when you do not, and that you will not cooperate in providing false testimony stating that they live there if they do not, would probably suffice to cover you if the relatives continued to make false statements.