Immigrants in the US are facing heightened risks of deportation as immigration enforcement agencies increasingly lean on Internal Revenue Service (IRS) records to identify instances of unauthorized employment. Reporting income from side hustles while on a visa tied to a single employer (say an H-1B visa) or a student visa—has now become a potential trigger for extension denials, refusal of entry, removal proceedings, and even deportation.“The Internal Revenue Service (IRS) has apparently shared data with Immigration and Customs Enforcement (ICE). We are starting to see people getting charged for unauthorized work—work they actually reported and paid taxes on,” said Jath Shao, an immigration attorney.
“I am seeing it more in the context of H-1B visa holders who are getting stopped and rejected either at the embassy or the port of entry due to accusations they worked without authorization as F-1 students,” said Shao.According to him, even minor past violations can resurface at critical junctures. “At times, getting caught in another offence—such as a traffic violation—can result in fact-finding of your background and charges for unauthorized work committed years earlier, like working at a fast food joint as a student,” he noted.Actions by ICE for unauthorised work is not yet widespread and not all attorneys have come across such cases. However, many have issued guidance notes cautioning individuals to follow the laws and not risktheir immigration status by earning a few dollars on the sideKripa Upadhyay, an immigration attorney at Buchalter, said the enforcement push is part of a broader strategy. “The ‘Extreme Vetting’ policy made it clear that vetting and monitoring of a visa holder does not cease once the visa is issued. These policies are not in silos; they are a concerted and coordinated effort to enforce the law and ensure that even the slightest deviation will be used to deny visas or expel people from the US,” she said.Immigration experts warn that individuals on H-1B visas, whose employment is strictly tied to a sponsoring employer, are at particular risk. “If USCIS is issuing notices regarding unauthorized work based on tax-reported side income, it could carry significant consequences,” cautioned Abhinav Tripathi, founder of Protego Law Group. “At a minimum, USCIS might argue that the person violated status, leading to removal proceedings or problems at the port of entry during travel.”Tripathi pointed out that while passive investments such as interest or capital gains should not pose a problem, freelance projects or monetized side activities “significantly increase the legal risks of status violation.”One area of growing concern is how tax filings will be interpreted by immigration officers. “Traditionally, USCIS has only regarded Schedule C income as a red flag for unauthorized work, covering activities like Uber driving, selling crafts on Etsy, or consulting,” explained Karin Wolman, an immigration attorney.“By contrast, Schedule B passive income such interest income or Schedule D (capital gains including dividends) cannot be treated as evidence of unauthorized employment. These schedules cover most traditional forms of passive investment income as well as sales of a home, and of course people have to be able to move house,” she explained.Her concern is the more amorphous possibility that USCIS examiners are going to start fancying themselves tax experts and digging and asking more detailed questions about the nature and extent of the applicant’s involvement in various investments, reflected in Schedule D.“The even greyer areas of possible concern on a tax return are Schedule E rental income and Schedule K partnerships, both of which encompass some legitimately totally passive income streams, and some that are much more active. We do not want to enter an era where immigration service officers start thinking they are qualified to analyze these” added Wolman. As enforcement intensifies, the message is clear: side hustles may offer short-term financial relief, but they can come at the ultimate price of one’s American dream.
