Thread: U.S. Tax Program for Illegal Immigrants Under Fire

http://www.npr.org/templates/story/stor ... t=1&f=1001

U.S. Tax Program for Illegal Immigrants Under Fire

by Bianca Vazquez Toness

All Things Considered, March 5, 2007 · The hundreds of thousands of immigrants working in the United States illegally are still expected to pay income taxes. The program works by providing a special tax identification number instead of a Social Security number — and participants are guaranteed that the information can't be used to deport them.

But the program's critics say that it amounts to the Internal Revenue Service abetting illegal immigrants.

More than 1 million non-U.S. citizens will file their taxes this year. One of the reasons that those who are living and working illegally in the United States want to file taxes is that they see an opportunity to prove their economic contribution and document their residence.

Last year, 1.4 million people used the special numbers. The last time the government checked, more than half of the people using an individual taxpayer identification number, or ITIN, were illegal immigrants.

Federal tax law prohibits the IRS from sharing information with other government agencies, including immigration authorities. So it's the promise of confidentiality that allows immigrants to file their taxes without fear of being deported.

The U.S. Treasury created ITINs 11 years ago, to help people working here without Social Security numbers comply with U.S. tax laws. According to the law, if you earn money here you have to report it, even if you're here illegally.

Marti Dinerstein, president of Immigration Matters, a public policy firm in New York that advocates for stricter immigration laws, calls the situation "ridiculous."

"They know that people that are using ITINs are in the country illegally," Dinerstein says. "It's basically tantamount to institutionalizing illegal immigration in the country."

The IRS won't comment on this, although in congressional hearings, IRS officials have acknowledged concern that the ITINs may be used for non-tax purposes. In fact, some banks have accepted the numbers in lieu of a Social Security number.

Immigration officials say the IRS is just doing what it's supposed to do — collect taxes. They say the onus is on employers to verify the legal status of their employees.

The U.S. Treasury created ITINs 11 years ago, to help people working here without Social Security numbers comply with U.S. tax laws. According to the law, if you earn money here you have to report it, even if you're here illegally.

Not exactly. ITINs were created for tax filing purposes for certain non-citizens and non-immigrants who are ineligible for a social security number, such as:

Persons who are claimed as dependents on tax returns filed by American Citizens, Legal Permanent Residents, and non-immigrants who have obtained a legal work permit.

Persons who may be required to pay taxes on unearned income (interest, capital gains, dividends, etc). Which is why banks accept the ITIN in lieu of an SSN.

For example: A few years ago I married a woman in Philippines, who has two children. In the three years that it took for her and the kids to obtain temporary visas to come to the US, I had to obtain ITINs for each of them to report tem as dependents on my tax returns. It is clearly stated in the application, and on the ID cards, that these are not work authorizations. Since my family was able to come legally to the US about a year ago, my wife applied for and obtained a work permit and SSN, valid only as long as her visa is valid. Hopefully in the interim she and the kids will be approved for permanent legal status, that is if Bush doesn't get all the illegals in line ahead of them . ITINs never were intended as employment authorization.