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Tax laws conceal illegal workers
June 19,2006
By Cari Hammerstrom
Monitor Staff Writer


Tax laws conceal illegal workers
Reform might unveil employers

By Cari Hammerstrom
Monitor Staff Writer

McALLEN — On as many as 10 percent of the 250 million wage reports the Social Security Administration receives each year, names and social security numbers do not match.

The discrepancies could be innocent — bad handwriting, typos and marriages are reasons why names and numbers may not jive.

But the inconsistencies on a wage report could also mean an illegal alien using a falsified or stolen identity has filed a tax report.

The Social Security Administration sends some employers and employees “no-match” letters to inform them of nonmatching names and Social Security numbers. But currently, the Department of Homeland Security is prohibited by the tax code from accessing these files.

It is a missed opportunity.

The “no-match” letters could be like a homing device, signaling where illegal aliens are washing cars, landscaping lawns or plucking fruit.

On this very topic, President Bush told an audience earlier this month at the U.S. Chamber of Commerce: “The system isn’t working.”

So the Department of Homeland Security is lobbying Congress to include in its immigration reform legislation a provision mandating the Social Security Administration share “no-match” information with them.

The agency also proposed this week to amend the current regulations so employers cannot ignore a “no-match” letter.

The proposal, published this week in the Federal Register and open for public comment, would describe safe-harbor procedures the employer can follow to be certain that the homeland security department cannot rule the company had direct or inferred knowledge that the people working for them may not be legal.

“Identifying businesses that are habitually flagged for submitting mismatched Social Security numbers would bolster our worksite enforcement efforts,” DHS Secretary Michael Chertoff said in a statement. “Congressional approval of this legislation is critical to ensuring U.S. businesses hire legal workers.”

The department has only limited access to the “no-match” data.

“We can get access to such information if we have already launched a criminal investigation into a company,” said Jarrod Agen, a homeland security department spokesman. “We do have some access. We don’t have sufficient access. We would like more.”

IFCO Systems, a crate and pallet manufacturer with more than 40 sites in the United States, including one in McAllen, was the target of an U.S. Immigration Customs Enforcement investigation in mid-April. ICE is an agency under the homeland security department.

More than half of the company’s 5,800 employees were found to have mismatched or invalid social security numbers. ICE discovered this after a tip came in that workers in New York were ripping up their W-2 forms because they were not planning on filing their taxes.

Seven current and former managers were criminally charged and more than 1,100 workers were processed for deportation. Five of the illegal aliens were working in McAllen.

In total, spanning various cases, the Social Security Administration has mailed 8.1 million “no-match” letters to employees and 128,000 to employers for 2004’s taxes filed in April 2005, showing the extent of illegal employment could be huge.

If the homeland security department can gain the right to use “no-match” information, it could help ICE investigators identify the companies with the highest rates of hiring illegal workers.

Chertoff said he believes most businesses want to do the right thing and employ legal workers. To help businesses, proposed regulation would give employers a list of steps to take if they receive a “no-match” letter.

“I think a lot of employers are going to feel more at ease,” said Cynthia Sakulenzki, president and chief executive officer of the McAllen Hispanic Chamber of Commerce.

Businesses are concerned about the possibility of fines being levied on them, she said.

“I know that this would probably relieve the tensions out there regarding the hiring of illegal aliens,” Sakulenzki said.

The proposed regulation expands the definition of when an employer “knows” he or she is hiring outside the legal job pool.

Critics of illegal hiring practices grumble when employers claim they are not document fraud experts who can ensure their hiring isn’t illegal.

The regulation would expand “knowing” to include “not only actual knowledge, but also knowledge which may fairly be inferred through notice of certain facts and circumstances.”

“These new regulations will give U.S. businesses the necessary tools to increase the likelihood that they are employing workers consistent with our laws,” Chertoff said. “They also help us to identify and prosecute employers who are blatantly abusing our immigration system.”

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Cari Hammerstrom covers law enforcement and general assignments for The Monitor. You can reach her at (956) 683-4424. For this and more local stories, visit www.themonitor.com.