While watching the latest Democratic debate, Mark Byron took issue with Howard Dean's comment that illegal aliens pay taxes:
Illegals don't pay much in the way of taxes, Dr. Dean. Sales tax, maybe, but most illegals are going to be paid under the table in cash, with the IRS not seeing the details. There may be some that work on forged Social Security cards and pay FICA, but you're not going to see too many illegals announcing their presence by paying income taxes.
While it might come as a surprise to most people, many illegal aliens actually do pay taxes.
Although an employer is legally required to verify employment eligibility by checking for a Social Security number or U.S. birth certificate, the IRS only needs an Individual Taxpayer Identification Numbers (ITIN) in order for a worker to pay taxes, file a tax return, and receive a refund.
Since a person cannot possess both a social security card and an ITIN it would seem there would be little demand for the document. But the IRS has issued almost 7 million of the numbers since 1996, 1.5 million in 2001 alone. That year around 366,000 tax returns were filed using ITINs accounting for 7 billion in wages and almost $305 million in taxes
But since the ITIN could be used by legal nonresident aliens are we justified in assuming that the illegal immigrants are taking advantage of the document? Well, the IRS seems to think so. An internal audit identified the following concerns:
Over 340,000 of the ITINs were issued to self-documented illegal aliens. Our concerns are whether: the information on illegal aliens should be shared with the Immigration and Naturalization Service; illegal aliens should be treated as residents for tax purposes; ITIN causes revenue protection issues; and, whether operational problems during the implementation were corrected.
The agency not only admits that it issues the ITINS to illegal aliens but that, "The IRS provides disclosure protection to illegal alien applicants." Not only does the IRS turn a blind eye to illegal immigration (providing, of course, they pay their taxes), they don't bother to report this information to other federal agencies as Congress requires them to do.
While the audit was issued in 1999, there doesn't appear to be any updates outlining changes to this policy. Apparently, the IRS doesn't want to give up a good thing. If Howard Dean gets elected they won't have to.
1
You're right. I spent a bit of time talking about the tax aspect of this when discussing the notion of granting illegal immigrants access to public colleges and universities. There is really no specific knowledge of what percentage of illegals actually use these numbers, but they are available, and the general purpose seems to be to allow illegals to get income tax refunds (since they usually make so little money they'd qualify for refunds). Otherwise, to the extent that they work for a legitimate employer, illegals are often supplying fake social security numbers, income tax is still withheld, and the government keeps the money because no return is ever filed. I'm still very torn about the whole issue: my theory remains, we should either enforce the immigration laws as currently written, or change them.
posted on 01.05.2004 12:18 PM2
Actually, the official reason to issue PTINs is to provide a method for temporary residents to work and pay taxes in the US (often as contractors)and to allow US residents to claim non-residents as dependants. (For instance an immigrant whose wife still lives in Mexico would be required to file as Married filing seperately, but would be allowed to claim his wife and children as dependants, but only if they each have a PTIN.)
Unfortunately, there are obviously many ways to game the system.
posted on 01.05.2004 1:43 PM3
You may be right. On the other hand, I was operating from the perspective of the articles I'd read in which IRS representatives indicated they were specifically using the system for illegals, not just aliens working in the U.S. under a visa system. For example:
The IRS simply says it's smart business. Its job is to collect taxes from those who work, not determine who is eligible to work. To do that job, officials say, they needed to find a way to cut down on fraud.posted on 01.05.2004 2:14 PM"We had to do something," says Leandro Leon, education and communication director in the Houston IRS office. "These undocumented aliens were working here, using bogus Social Security numbers, and not reporting their income."
When the ID was first announced, Mr. Leon had a trickle of immigrants come to his office. But as word spread, and with assurances given that no immigrants' information will be shared with the Immigration and Naturalization Service, Mr. Leon started having to set up seminars to handle as many as 500 immigrants a night.
Those same high numbers can be seen at seminars all across the US. The IRS has signed up 5.3 million since the taxpayer ID program began in 1996.
4
The fact that the United States government plays the game at its advantages is very sad and upseting. Here you have an institution that has no way to justify their actions against undocumented immigrants who pay taxes like most American citizens do,yet receive no refunds, no benefits, and no government help. What type of hypocrisy is this?
posted on 02.03.2004 5:38 PM