Tom Tancredo Hired Illegal Laborers to Renovate His McMansion

[Caladan 19]

But it isn't their business. I mean, it couldn't be. They don't have access to the SSA database; they're not employers. I agree that the man's behavior is despicable, but I'm not sure what you're arguing --- that tax agencies should be able to do a background check?

[pedroh 21]

Lisa: how did they get around the issue of needing actual social security cards for all dependents?

I coordinate a Volunteer Income Tax Assistance site for work, and we're not able to list anyone on a return, legal or illegal, who can't produce back up documentation, be it a SS# or ITIN.

I know that you mentioned the other tax preparer said they they're not in the business of checking anyone's documentation...is that how they got around it?

According to my colleague, if you go into a neighboring town, for $100 'you can come out with a food stamp card, ss#, dl, etc'

$100 for a SS#?? dang that's cheap.. in this area is about 2k dollars for a real one

[Fandango 1,439]

But it isn't their business. I mean, it couldn't be. They don't have access to the SSA database; they're not employers. I agree that the man's behavior is despicable, but I'm not sure what you're arguing --- that tax agencies should be able to do a background check?

I'm not arguing anything...just telling a story I just hear this hour. It makes me sick how a filing taxes turns into a $3000 deficit to the US taxpayer.

[GabachaYucateca 0]

So he provided a letter from the day care place for all FIVE children, NONE of whom live in the States?

What a tangled web. Well, with the amount of documentation and paperwork needed for public assistance, they're bound to catch up with him eventually. Although, judging from the number of legal citizens I've seen who've engaged in fraud to get public benefits, it might take a while.

Around here, most illegal immigrants try to stay under the radar...and simply have the taxes taken out of their paychecks and never claim anything.

What a stupid, bold move on this guy's part.

[Caladan 19]

But it isn't their business. I mean, it couldn't be. They don't have access to the SSA database; they're not employers. I agree that the man's behavior is despicable, but I'm not sure what you're arguing --- that tax agencies should be able to do a background check?

I'm not arguing anything...just telling a story I just hear this hour. It makes me sick how a filing taxes turns into a $3000 deficit to the US taxpayer.

If it makes you feel better, according to my accountant the IRS often audits those with low incomes who report high deductions.

[Sofiyya 1,687]

Around here, most illegal immigrants try to stay under the radar...and simply have the taxes taken out of their paychecks and never claim anything.

What are these sympathetic, law-abiding folks using for SSNs?

Edited December 2, 2007 by Green-eyed girl

[Caladan 19]

Around here, most illegal immigrants try to stay under the radar...and simply have the taxes taken out of their paychecks and never claim anything.

What are these sympathetic, law-abidng folks using for SSNs?

They can use an ITIN, which allows them to file taxes but accrue none of the other SS# benefits.

[Sofiyya 1,687]

You still have to have some legal basis to get an ITIN. I got one for my husband, so I know you don't just get one. If they are illegal, how do they get tax ID legally?

Edited December 2, 2007 by Green-eyed girl

[Fandango 1,439]

But it isn't their business. I mean, it couldn't be. They don't have access to the SSA database; they're not employers. I agree that the man's behavior is despicable, but I'm not sure what you're arguing --- that tax agencies should be able to do a background check?

I'm not arguing anything...just telling a story I just hear this hour. It makes me sick how a filing taxes turns into a $3000 deficit to the US taxpayer.

If it makes you feel better, according to my accountant the IRS often audits those with low incomes who report high deductions.

Yes, that does make me feel better....but if it's still being done, obviously, the IRS is not putting a full stop to this practice.

[GabachaYucateca 0]

Gotta pick an argument, don't ya?

Also, many pick random numbers out of the air.

[Caladan 19]

You still have to have some legal basis to get an ITIN. I got one for my husband, so I know you don't just get one. If they are illegal, how do they get tax ID legally?

The only requirement is that one be in a position to need to file federal income taxes while not being eligible for an SSN. Nothing about legal presence or legal ability to work; it confers neither.

Edited December 2, 2007 by Caladan

[Fandango 1,439]

Gotta pick an argument, don't ya?

Also, many pick random numbers out of the air.

To whom are you talking?

[Sofiyya 1,687]

Gotta pick an argument, don't ya?

Also, many pick random numbers out of the air.

Pick an argument by asking a legitmate question? Boy, it's soooo easy to work you up. I'll keep that in mind when I want to work you up again, since you have so little self-control.

[Sofiyya 1,687]

Here ya go, Lisa.

Giving Cover to Illegal Aliens

IRS Tax ID Numbers Subvert Immigration Law

October 2002

By Marti Dinerstein

(mdinerstein@earthlink.net)

--------------------------------------------------------------------------------

Through its issuance of Individual Tax Identification Numbers (ITINs), the Internal Revenue Service (IRS) appears to be blind or indifferent to the reality that it has:

created an official U.S. tax number that illegal aliens are using as identification, thereby making it easier for them to meld unnoticed into our society;

endangered homeland security by issuing ITINs to illegal aliens, without adequately ensuring that they are denied to terrorists, criminals on the FBI database, and those under deportation notices;

exceeded its traditional role as a tax receiver and processor by marketing the ITIN to illegal immigrant communities;

failed to provide adequate safeguards to prevent illegal aliens from receiving tax benefits to which they are not entitled;

subverted U.S. immigration laws by withholding information from the INS and SSA about fraudulent activity of illegal aliens;

provided an ID vehicle that advocates hope will be used to "regularize" illegal aliens; and

withheld from public review data that is relevant to determining the economic contribution of illegal aliens to U.S. society.

The events of September 11, 2001, were a wake-up call to the American people that something must be done to protect our core identity documents. They were shocked to learn that 18 of the 19 terrorists possessed either state-issued or counterfeit driver’s licenses or ID cards and all 19 had obtained Social Security numbers (SSNs) — some real, some fake. The hijackers simply tapped into an enormous market for fraudulent documents that exists because nine million people have successfully breached our borders and now reside here illegally. Their presence has spawned widespread document and identity fraud that threatens our ability to distinguish illegal aliens from U.S. citizens and legal foreign residents.

This realization jolted Congress, many state legislatures, state motor vehicle departments, and the Social Security Administration into taking a variety of steps to protect the integrity of driver’s licenses and Social Security cards — the two most widely used identity documents in the United States — from misappropriation by illegal residents. Much remains to be done, but real progress has been made.

Ironically, however, the IRS, a division of the Treasury Department, is simultaneously working to provide illegal aliens with a U.S. government-issued identity number that obviates the need for a Social Security number. It is called the Individual Taxpayer Identification Number (ITIN). Very little public information about these numbers has been made available, even though the IRS began issuing them in July 1996, and over 5,500,000 of them have been issued.

SSA Attempts to Stem Fraud

Employers are required by law to verify that an employee has a valid SSN. The Social Security Administration has long been aware that millions of people living illegally in the United States have obtained SSNs fraudulently using a variety of means. It has systematically taken steps to limit the purposes for which an SSN can be issued and to better validate the underlying "breeder" documents presented to obtain a SSN. In May 2002, SSA announced a new initiative, a beneficial by-product of which has been to identify people working illegally in the United States. The program’s purpose is to reduce the size and growth of what is known as the Earnings Suspense File (ESF).

When employers file annual withholding tax reports, SSA matches the report from the employer to the name, address, and SSN provided by an employee. So-called "mismatches" are posted to the ESF, which contains information on $327 billion in wages accrued between tax years 1937 and 1999. In 1999 alone, the ESF grew by 8.3 million W-2s and $39.4 billion in wages. A recent SSA report indicated that 96 per cent of ESF wages had been posted since 1970, about the time that an unprecedented number of illegal immigrants began arriving in the United States.1

This year SSA sent out over 750,000 letters to employers of approximately seven million workers whose names did not match the SSN provided.2 Employees who cannot provide a credible reason for the mismatch either voluntarily seek employment elsewhere or are terminated. Unfortunately, the SSA has no legal authority to levy fines and penalties against either employees who fraudulently obtain a SSN or against employers who repeatedly submit large numbers of wage reports with incorrect SSNs. They must rely on the Internal Revenue Service (IRS) to do so, and audits have revealed this rarely happens.3

The IRS Provides "Official" Identification to Illegal Aliens

The IRS’s seeming lack of interest in protecting the integrity of the Social Security number from fraudulent use pales to insignificance, however, when faced with the reality that it is responsible for providing a backdoor way for millions of illegal aliens to receive a U.S. government-issued identity number. And it is doing so despite the fact that in 1999 the Treasury Department’s Inspector General for Tax Administration said the decision by the IRS to issue these Individual Taxpayer Identification Numbers (ITINs) to illegal aliens "seems counter-productive to the Immigration and Naturalization Service (INS) mission to identify illegal aliens and prevent unlawful entry."4

Genesis of ITINs. The audit report referenced above said that a 1994 IRS investigation uncovered significant compliance problems "with the $80 billion annual nonresident alien U.S. investment income." In response, the IRS created an ITIN for non-resident aliens in order to match information documents showing dividend, interest and other income earned by individuals to the tax returns they file. The IRS began issuing ITINs in July 1996.

Either at the program’s inception or shortly thereafter, the IRS seems to have expanded the initial purpose of the ITIN by making a policy decision to issue it to resident aliens, including individuals residing illegally in the United States. The audit report referenced above questioned this policy to "legalize" illegal aliens.

Significant portions of the report were deemed to be so sensitive they were redacted from the public document, in part because it is felt that some information could be used to facilitate fraud by illegal aliens. Once an IRS report has been redacted, it stays that way. Therefore, the full text of the 1999 Inspector General for Tax Administration’s report on ITINs is still not available for public review. No follow-up report was issued.

Illegals get undeserved tax benefits. The 1999 report appears to include extensive commentary on the ITIN applications of 340,000 illegal aliens, but most of it was redacted. The IRS’s objective may be to collect tax revenue from the broadest base possible — a laudable goal. Ironically, however, this has resulted in the IRS ignoring illegals’ presence in the United States. One of the reasons why illegals are issued ITINs is that IRS regulations determine resident alien status based on "substantial presence" in the United States, not legal residence. Thus, illegal aliens who file tax returns are treated in the same way as legal foreign residents and receive the same tax benefits, such as spousal exemptions, child and education tax credits. The one exception seems to be the Earned Income Tax Credit, which is available to legal permanent residents but which the IRS decided would not be available to illegal aliens.

Intended or not, it is clear that a significant number of illegal aliens are receiving the Earned Income Tax Credit. This is talked about quite openly by their advocates. Moreover, in its publications the IRS is signaling that this is a problem. One of three bullet points at the top of Form W-7 used to apply for an ITIN reads: "Receipt of an ITIN does not make you eligible to claim the earned income credit (EIC)."5

Further, a section describing the Earned Income Tax Credit on the IRS web site lists six rules that must be followed. "Rule 1. You Must Have a Valid Social Security Number (SSN). . .You cannot get the EIC if, instead of an SSN, you (or your spouse if filing a joint return) have an individual taxpayer identification number (ITIN). ITINs are issued by the Internal Revenue Service to noncitizens who cannot get an SSN."6

It is an unfortunate fact of life that U.S. citizens routinely claim tax deductions and credits to which they are not entitled. It is a cat and mouse game that presumably the IRS wins more often than not. However, there was language in the Inspector General’s 1999 report implying that both "revenue protection issues" and "operational problems during the implementation" period resulted in the ITIN being vulnerable to fraud. It is possible that the IRS system was programmed in a way that makes it very difficult to prevent payment of the Earned Income Credit if a resident alien unauthorized to work in the United States claims it.

IRS shields illegals from INS. This same audit report said that issuing ITINs to illegal aliens may take on greater significance if the IRS were to come under the scrutiny of Congress. "Illegal alien presence in the United States is a congressional concern which is addressed by legislation in the Welfare Reform Act and the Illegal Immigration Reform and Immigrant Responsibility Act of 1996."7

The Inspector General’s audit also pointed out that the IRS has a policy of shielding illegal immigrants from exposure to the Immigration and Naturalization Service (INS), which appears to be in contravention of the express wishes of Congress. "The IRS provides disclosure protection to illegal alien applicants. The Congress has clearly stated how the federal government is to communicate between agencies concerning illegal aliens. The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 . . . states that information concerning illegal alien status should be provided to the INS notwithstanding any other law." Subsequent exposition revealed that IRS management believed its own regulations guaranteed the confidentiality of tax return information and did not intend to share any returns with the INS.8

If that is still the position of the IRS, it is even more untenable today. The USA Patriot Act of 2001, passed overwhelmingly by Congress in response to the terrorist attacks on America, explicitly calls for greater information sharing among government agencies, law enforcement and the intelligence community.9

It is not clear if the IRS regulations regarding confidentiality relate specifically to divulging tax information, such as income, number of dependents, etc., or if they also forbid the IRS from sharing even the taxpayer’s name and identification number with another government agency.

It also is unclear if copies (redacted or not) of the Inspector General’s 1999 report were shared with Congressional committees responsible for oversight of the IRS. The report was addressed to the IRS Commissioner and noted that copies also were being sent to IRS managers affected by the report’s recommendations. This distribution approach differs from that followed by the Inspector General for the Social Security Administration, who also addresses his reports to the Commissioner while simultaneously distributing copies to a long list of members of Congress whose committees presumably have oversight over SSA.

IRS ignores fraudulent use of SSNs. Illegal aliens have been warned by advocates not to use the ITIN when applying for employment, as it would expose their illegal status. All publications from both the IRS and the SSA say that an individual can have either an ITIN or an SSN, but not both. But since employees suffer no penalty for using fraudulent SSNs, they continue to do so. Similarly, since employers benefiting from cheap labor also suffer no penalty, they continue to hire illegal aliens without checking the validity of their SSNs. Once someone is hired, employers begin to withhold taxes.

It is believed that far more ITINs have been issued than annual tax returns filed and that illegal residents who file returns do so to claim refunds. If so, presumably they use the ITIN provided by the IRS as their identifier on the 1040 Form, attaching the W-2 form provided by their employer. The catch is that their fraudulently obtained SSNs appear on the W-2 forms. Illegal aliens can obtain a SSN in a variety of ways. They can make up a number, steal or borrow someone else’s, buy a counterfeit Social Security card, or obtain a valid Social Security card fraudulently.10 What is abundantly clear is that they are not entitled to it.

Knowing that the ITIN would not be necessary if the SSN were legitimate, apparently the IRS has been processing the returns anyway — ignoring this clear violation of its own rules. It could not be determined if there is a penalty attached to using both numbers simultaneously or if the IRS notifies the SSA about the possibility of a fraudulently obtained SSN. If the IRS does not do so, it would appear that the agency is undermining the integrity of Social Security numbers and U.S. immigration law and could be endangering homeland security.

"For Tax Purposes Only"?

One of three bullet points in the "Before you begin" section on the W-7 form to apply for an ITIN is the following message: "This number is for tax purposes only." That seems fairly straightforward. Yet, it is clear that advocates for illegal immigrants are aggressively pushing use of the ITIN as identification for many other purposes. The website of the National Employment Law Project (NELP), contains a section titled "How Can the ITIN be Used to Show Identity?": "There has been growing interest among immigrants and their advocates in using the ITIN as an alternative to the SSN. Indeed, many immigrant groups are successfully advocating for the use of identity documents other than a SSN in order to obtain drivers’ licenses and consumer benefits." NELP goes into extensive detail explaining how illegal immigrants can get around using Social Security numbers.11

Numerous newspaper articles describe how the ITIN is being used to open banking accounts and, in some states, obtain driver’s licenses.12, 13, 14

The most astonishing example is a news release from Fifth Third Bank, headquartered in Ohio. Announcing an initiative to better serve the unique needs of the Hispanic community, Bradlee F. Stamper, President and Chief Executive Officer proudly boasts: "Our first step — and it’s a crucial one — is to start accepting new means of ID for persons otherwise shut out of the U.S. banking system. Starting now, Fifth Third will honor the Matricula Consular Card issued by the Government of Mexico and the Internal Revenue Service’s Taxpayer Identification Number as legal identification for immigrants who lack proper identification to open savings and checking accounts."15

Matricula consular. Most media stories link the ITIN to the burgeoning use of the matricula consular, a photo ID being issued by the Mexican government to its citizens living illegally in the United States. The Mexican government has been lobbying state and local governments as well as banks to accept the matricula as official identification. But banks need an official U.S. tax number in order to open an interest-bearing account and, by definition, illegal aliens are not legally entitled to a Social Security number. So the Mexican government is pushing the ITIN as an acceptable alternative and, apparently, the IRS has raised no objection.

Other than noting on its own publications that the ITIN is "for tax purposes only," the IRS seemingly has made no effort to contact banks or their regulators or state motor vehicle departments to let them know that the ITIN is not being authenticated in a way that makes it safe as identification. This omission endangers homeland security.

The complete article can be read at the link at the top.

Edited December 2, 2007 by Green-eyed girl

[Caladan 19]

The article seems to make a few leaps. How does it endanger homeland security, I wonder? It's an easy thing to throw around, but is the article writer seriously suggesting that anyone accepts an ITIN as identification and that terrorists would have been prevented but for the ITIN?

I don't know of anything that accepts the ITIN as identification. Heck, even the SSN isn't identification on its own, if we're splicing hairs. It's not photo ID. I can't use it on its own for much of anything besides taxes. As we know, advocating for a position isn't the same as that position being actually in the law. You certainly can't get a driver's license without proving you're here legally. So is this a real problem or a made-up shadowy one like a child's bedtime story?

And make up your mind -- is it impossible to get an ITIN without being here legally (therefore proving it's all obtained by fraud), or a ploy intended for people here illegally? You can't have it both ways.