WASHINGTON — A day after reports emerged that the Internal Revenue Service is actively debating adding a citizenship question to federal tax returns, foreign embassies, international business groups, and immigrant rights organisations have begun formally registering objections with the U.S. State Department and Treasury, warning the proposal could deter millions of lawful residents from filing taxes and create diplomatic friction with allied nations.

The embassies of Mexico and several Central American countries, whose nationals collectively account for tens of millions of U.S. tax filers, issued a joint communiqué on Wednesday expressing 'serious concern' about potential chilling effects on lawful visa holders and permanent residents. Mexican Foreign Minister officials indicated they would raise the matter in ongoing bilateral consultations scheduled for later this week in Washington.

Treasury Department spokespeople confirmed that no final decision has been made, stressing that the proposal remains in an internal review phase. However, the mere disclosure of the debate has been sufficient to prompt urgent calls from Democratic lawmakers, who sent a letter to IRS Commissioner Gary Shapley demanding a full briefing and requesting that any rulemaking follow standard public notice and comment procedures under the Administrative Procedure Act.

Immigration legal experts warned that even a voluntary citizenship question could suppress tax compliance among mixed-status households, potentially reducing federal revenue and complicating enforcement. 'The IRS mandate is tax collection, not immigration enforcement,' said one senior immigration attorney at a Washington-based non-profit. 'Conflating the two functions would be legally contested and practically counterproductive.'

The episode adds another layer of complexity to the Trump administration's broader immigration enforcement agenda, which has already generated tensions with trading partners in Europe and Latin America. The European Union's trade liaison office in Washington said it was 'monitoring the situation closely,' noting that EU citizens employed in the United States on temporary work visas could also be affected by any new disclosure requirements.