You'd still have to apply for a Social Security Card for them to have anything to worry about. That's not automatically granted to babies at birth. The hospital should certify the birth and give you paperwork from something like a state's vital records department but you still have to present that to the SSA. Ostensibly yes they are automatically citizens of the US but they're in a weird spot I would think that you could resolve with a court case if the IRS suddenly came after them for back taxes or something when they were adults. Honestly that sounds like such a ridiculous situation that I can't imagine it's happened.