Migrant filings rise, tax preparers report
Under U.S. law, a record can help with legal status
Daniel González
The Arizona Republic
Apr. 11, 2007 12:00 AM

Saul Romero, an undocumented immigrant from Puebla, Mexico, has been working in the United States illegally for six years.

Last week, the Phoenix factory worker walked into the offices of Campos Enterprises, a tax preparer in Glendale, and for the first time filed his income taxes with the Internal Revenue Service.

Tax preparers are seeing a surge in the number of undocumented immigrants like Romero as the April 17 filing deadline approaches.

Filings are rising despite stepped-up efforts to crack down on businesses that knowingly hire illegal workers.

Many illegal immigrants are hoping that playing by the rules now will help them earn legal status in the future should Congress pass comprehensive immigration reform, say tax preparers, immigrant advocates and legal experts. Many also hope to get a refund.

"I want to have a record of my taxes, how much I paid and how much I received . . . to prove I am paying my taxes like everyone else," Romero said. The 27-year-old declared $18,028 in income last year from his job assembling air-conditioning parts and will receive a $2,014 refund.


Encouraged to file
Illegal immigrants are being encouraged to file by immigrant advocates pushing for a legalization plan and the IRS, which wants them to comply with tax laws.

But critics say the growing practice legitimizes the presence of illegal immigrants and puts the IRS at odds with the Department of Homeland Security. The IRS says it is just interested in enforcing the law.

"If a person is working and earning money in the U.S., they are subject to the tax laws, whether they are considered for tax purposes to be a citizen, a resident alien, or a non-resident alien," said Bill Brunson, an IRS spokesman.

An immigration-reform proposal filed in the House in March by Reps. Jeff Flake, R-Ariz., and Luis Gutierrez, D-Ill., would require illegal immigrants to prove they had been in the U.S. before June 1, 2006; verify they worked full time, part time, seasonally or were self-employed, and show they had paid all their taxes.

There is a misperception promoted by anti-immigrant groups that illegal immigrants are paid in cash under the table, said Crystal Williams, deputy director of the American Immigration Lawyers Association in Washington, D.C. In reality, most work on the books and have taxes taken from their checks, using either bogus Social Security numbers or ones that belong to someone else, she said.

Illegal immigrants have been reluctant to file taxes, even if they might be eligible for a refund, out of fear of drawing attention from federal authorities that could lead to their deportation, Williams said.

The information they provide, however, is kept confidential by the IRS, and advocates on radio and television programs that cater to immigrant communities have been urging undocumented workers to file, easing fears.

But Williams said failure to file won't exclude illegal immigrants from being eligible for legalization because proposals give such immigrants an opportunity to pay back taxes.

Using a tax ID number
To file income taxes, undocumented immigrants must apply to the IRS for an Individual Tax Identification Number, or ITIN. The Internal Revenue Service created the nine-digit tax identification numbers in 1996 for people who aren't eligible for Social Security numbers.

Through Nov. 3, the IRS had issued 10.7 million numbers. And in 2005, the most recent year for which figures are available, 1.4 million people filed returns with the numbers.

Not everyone who files a tax return with a tax ID number is undocumented. Foreign nationals living legally in the U.S. who have reason to file, such as students, also can get the numbers.

But experts estimate that as many as two-thirds of the numbers have been issued to illegal immigrants.

Critics say issuing the numbers to such immigrants allows them to take advantage of services reserved for citizens and people in the country legally.

In 2004, for instance, government auditors used bogus documents to obtain tax ID numbers and used the numbers to open a bank account and obtain an ATM card. They also fabricated a tax ID number and used it to get a voter registration card.

The IRS Web site says the numbers cannot be used for identification purposes and are furnished only "to help individuals comply with the U.S. tax laws and to provide a means to efficiently process and account for tax returns and payments for those not eligible for Social Security numbers."

It also says the agency makes no inference about the immigration status of filers using the numbers.

Allowing illegal immigrants to file is bad fiscal policy because most earn low wages and therefore qualify for refunds, said Steven Camarota, research director at the Center for Immigration Studies, a think tank that supports tighter restrictions on immigration.

It also puts the IRS at odds with the Department of Homeland Security. On one hand, the IRS is making it easier for illegal immigrants to live in the U.S., while on the other, Homeland Security is trying to enforce immigration laws aimed at discouraging illegal immigration.

"This isn't an accident," Camarota said.

"The Bush administration wants to make it seem like they are doing something on enforcement, but at the same time, they don't want to do anything to upset the business community."


Big business, big refunds
Tax preparers are rushing to cash in on the surge in undocumented filers.

Phoenix-based Campos Enterprises, which specializes in the Latino market, opened six stores this year. It now has 25 locations in Arizona and one in Las Vegas.

Tony Campos, the president, estimates that 60 percent of the company's 10,000 customers are filing taxes with tax identification numbers.

One recent afternoon, a steady stream of customers walked into the Campos Enterprises location on Bethany Home Road near 51st Avenue in Glendale.

The area has a large Latino immigrant population, but Alfonso Rodriguez, 29, and his wife, Laura Aldaz, 24, had driven an hour and a half from Prescott Valley because the undocumented couple from Mexico wanted a tax preparer who spoke Spanish.

They sat down in front of a desk and opened a folder containing their W-2 forms and other documents.

One of the tax preparers typed the information into a computer while the couple's 2-year-old son played in the waiting area.

Rodriguez said he works as a cook at a restaurant. Aldaz is a cashier at the same place. The couple earned $14,000 last year. Both have phony Social Security numbers and used tax identification numbers to file with the IRS. By filing their taxes, they hoped to qualify for legalization in the future.

"It's important that we comply with the laws of this country," Aldaz said.

They also were hoping for money back. The couple walked out with good news.

"We're going to get a refund for $1,300," Aldaz said.
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