Thread: NORTH DAKOTA SOCIAL SECURITY FRAUD

N.D. not immune to Social Security misuse


By JILL SCHRAMM, Staff Writer jschramm@minotdailynews.com


Immigration has little effect in N.D.

No one is taking a guess at how many illegal immigrants are making their homes in North Dakota.

Immigration and Customs Enforcement handles investigations, but the agency offered no estimate on the number of illegal immigrants who might be living in the state.

Groups that guess at illegal immigrant numbers in states often omit North Dakota because the count is small – fewer than 2,000.

The Pew Hispanic Center estimates about 12 million illegal immigrants live in the United States. There are about 7.2 million undocumented workers, accounting for one in every 20 workers.

The center estimates that illegal immigrants fill 25 percent of agricultural jobs, 17 percent of cleaning positions, 14 percent of construction jobs and 12 percent of food-preparation jobs. Most of the illegal immigrants – 56 percent – come from Mexico. Another 22 percent come from other Latin American countries, 13 percent from Asia and 6 percent from Europe and Canada.

Only 1.9 percent of North Dakota’s population was listed as foreign-born in 2000 census statistics. The statistics may include illegal immigrants, although more often these residents go untabulated in census figures.

The U.S. Census Bureau estimated that Hispanic and Latino people made up 2.6 percent of Ward County’s population in 2005, or about 1,450 residents. The bureau didn’t have estimates for other ethnic immigrants.

Regarding immigrants from Mexico to North Dakota, about 67 percent are in the labor force, largely in agriculture. Many also are in manufacturing, or education, health and social services, according to 2000 census data. The majority earn between $15,000 and $50,000 a year. However, 26.5 percent live below the poverty level. Slightly more than half say they speak English “very well.” Only 5 percent speak English only.

That compares with the Canadian profile that shows 55.7 percent of immigrants to North Dakota are in the labor force, commonly in health, education and social services. The typical salary is between $25,000 and $75,000 a year, and 10.6 percent live in poverty.

A Minot woman received a surprise about two years ago when she learned the results of an employment background check.

Two people with Hispanic names, one on the East Coast and one on the West, shared her Social Security number.

The Social Security Administration acknowledged the existence of three accounts using the same number, said Terry Narum, whose company, Midwest Business Consulting, performed the background check and alerted the employee.

Because of privacy laws, the Social Security Administration doesn’t inform people when their numbers show up with new names, nor does the agency release information if people discover other users, he said.

To this day, it’s possible the woman’s Social Security number remains in use by the two other people. Her situation may be alarming but it’s not unusual.

Immigration and Customs Enforcement has arrested illegal immigrants who were found to be using false or stolen Social Security numbers. Sometimes in making up a number for themselves, people can hit on valid numbers that belong to others.

The Social Security Administration sets aside W-2s filed by workers when names and Social Security numbers don’t match government records. About 10 percent of the W-2s filed in 2003 fit that category, according to the agency’s most recent statistics.

Sometimes transposed numbers or name changes are the culprit. The agency straightened out the discrepancy in more than half of the 2003 cases, placing the remainder in the Earnings Suspense File, to be reconciled later. As of October 2005, about 8.8 million W-2s, or 3.5 percent of the total filed, remained in the suspense file for 2003.

In time, more of these discrepancies could be cleared. That typically happens. Only 2.3 percent of 1995 wage items remain in the suspense file.

In total, the suspense file contains about 255 million W-2s filed by workers since 1937 that have never been reconciled. That’s more than the 235 million W-2s that the government currently receives annually.

Many of the unmatched wage reports are believed to belong to illegal immigrants, although the Social Security Administration can vouch only for the existence of mismatches and not the reason for them.

The IRS reported that 7.9 million W-2s filed by workers in 2004 had Social Security numbers that didn’t match the name. Most of the mismatches came from California, Texas, Florida and Illinois.

In a report to Congress, the IRS made the following conclusions about mismatched wage reports:

– Filers tend to be low wage earners, with about 75 percent earning less than $10,000 and 98 percent earning less than $30,000

– About 50 percent of wage earners had taxes withheld, which is lower than returns with valid Social Security numbers.

– Most of the workers are in agriculture, temporary employment and janitorial.

– Turnover is high, making it likely that by the time an employer is advised of a mismatch, the employee had moved on.

– There’s little potential to collect penalties from employers because under the current system, they can easily show due diligence in screening new hires.

IRS Commissioner Mark Everson told Congress a year ago that the agency would be attempting to work more closely with law enforcement.

However, he added, “We must make sure that any change in the current system encourages the type of behavior that we desire from both employees and employers. Imposing procedures on employers that are too stringent or requiring too much documentation from employees may have the effect of driving certain economic activities ‘underground.’ At least now, we are collecting some taxes in these areas and we are working to collect even more.”

The IRS reported the tax liability on 2.9 million returns filed in 2005 with at least one Individual Taxpayer Identification Number totaled $5 billion. The IRS issues ITINs to foreign residents who don’t qualify for Social Security numbers, which includes illegal immigrants. There were 1.9 million returns in 2005 for which the primary filer had an ITIN, up 30 percent from 2004.

There’s also considerable money going into Social Security that immigrants won’t collect as long as they remain illegal.

The Senior Citizens League, one of the nation’s largest senior groups, objects to amnesty for illegal immigrants because it would allow them to collect on Social Security taxes earned through illegal employment. Many of today’s illegal workers earn low wages, entitling them to get back more than they put in, according to the league.

“The government would give people back benefits for all of those earnings that they have been earning fraudulently for all of that time. We are talking about billions and billions of dollars,” said spokesman Brad Phillips, Washington, D.C. “To pay out tens of billions of dollars to working illegal immigrants will probably come at the sacrifice of those who have been paying legally into the system for all these years.”

The league also is concerned about an agreement that the Bush Administration is negotiating with Mexico that includes provisions giving millions of illegal immigrants a claim to the Social Security taxes that they have paid in. Some members of Congress have introduced legislation that would, if passed, require congressional approval for any agreement.

In the Minot woman’s case, she carefully screens her annual earning reports from Social Security and put a lock on access to her credit information, Narum said.

In most cases, illegal immigrants using false Social Security numbers aren’t looking to steal identities. Some illegal immigrants use stolen Social Security numbers to establish credit histories under their own names, although that creates potential for confusion, too.

A background check to determine whether one’s Social Security number has been compromised costs about $20. Just checking doesn’t protect you from identity theft, however.

To do that, Narum advises that people thoroughly review the Social Security earning statements that arrive shortly before their birthdays and freeze the release of their credit information by credit bureaus.

The North Dakota Legislature passed a law that will enable residents, after June 1, to put a block on unauthorized access to information available from credit bureaus. That makes it difficult for identity thieves to obtain credit in someone else’s name.

People also can ask that credit bureaus not release information to marketers of pre-approved credit offers. The Federal Trade Commission publishes a sample opt-out letter to send to credit bureaus at (www.ftc.gov/privacy/cred-ltr.htm).

In time, more of these discrepancies could be cleared. That typically happens. Only 2.3 percent of 1995 wage items remain in the suspense file.

In total, the suspense file contains about 255 million W-2s filed by workers since 1937 that have never been reconciled. That’s more than the 235 million W-2s that the government currently receives annually.

Many of the unmatched wage reports are believed to belong to illegal immigrants, although the Social Security Administration can vouch only for the existence of mismatches and not the reason for them.

The IRS reported that 7.9 million W-2s filed by workers in 2004 had Social Security numbers that didn’t match the name. Most of the mismatches came from California, Texas, Florida and Illinois.

In a report to Congress, the IRS made the following conclusions about mismatched wage reports:

® Filers tend to be low wage earners, with about 75 percent earning less than $10,000 and 98 percent earning less than $30,000

® About 50 percent of wage earners had taxes withheld, which is lower than returns with valid Social Security numbers.

® Most of the workers are in agriculture, temporary employment and janitorial.

® Turnover is high, making it likely that by the time an employer is advised of a mismatch, the employee had moved on.

® There’s little potential to collect penalties from employers because under the current system, they can easily show due diligence in screening new hires.

IRS Commissioner Mark Everson told Congress a year ago that the agency would be attempting to work more closely with law enforcement.

However, he added, “We must make sure that any change in the current system encourages the type of behavior that we desire from both employees and employers. Imposing procedures on employers that are too stringent or requiring too much documentation from employees may have the effect of driving certain economic activities ‘underground.’ At least now, we are collecting some taxes in these areas and we are working to collect even more.”

The IRS reported the tax liability on 2.9 million returns filed in 2005 with at least one Individual Taxpayer Identification Number totaled $5 billion. The IRS issues ITINs to foreign residents who don’t qualify for Social Security numbers, which includes illegal immigrants. There were 1.9 million returns in 2005 for which the primary filer had an ITIN, up 30 percent from 2004.

There’s also considerable money going into Social Security that immigrants won’t collect as long as they remain illegal.

The Senior Citizens League, one of the nation’s largest senior groups, objects to amnesty for illegal immigrants because it would allow them to collect on Social Security taxes earned through illegal employment. Many of today’s illegal workers earn low wages, entitling them to get back more than they put in, according to the league.

“The government would give people back benefits for all of those earnings that they have been earning fraudulently for all of that time. We are talking about billions and billions of dollars,” said spokesman Brad Phillips, Washington, D.C. “To pay out tens of billions of dollars to working illegal immigrants will probably come at the sacrifice of those who have been paying legally into the system for all these years.”

The league also is concerned about an agreement that the Bush Administration is negotiating with Mexico that includes provisions giving millions of illegal immigrants a claim to the Social Security taxes that they have paid in. Some members of Congress have introduced legislation that would, if passed, require congressional approval for any agreement.

In the Minot woman’s case, she carefully screens her annual earning reports from Social Security and put a lock on access to her credit information, Narum said.

In most cases, illegal immigrants using false Social Security numbers aren’t looking to steal identities. Some illegal immigrants use stolen Social Security numbers to establish credit histories under their own names, although that creates potential for confusion, too.

A background check to determine whether one’s Social Security number has been compromised costs about $20. Just checking doesn’t protect you from identity theft, however.

To do that, Narum advises that people thoroughly review the Social Security earning statements that arrive shortly before their birthdays and freeze the release of their credit information by credit bureaus.

The North Dakota Legislature passed a law that will enable residents, after June 1, to put a block on unauthorized access to information available from credit bureaus. That makes it difficult for identity thieves to obtain credit in someone else’s name.

People also can ask that credit bureaus not release information to marketers of pre-approved credit offers. The Federal Trade Commission publishes a sample opt-out letter to send to credit bureaus at (www.ftc.gov/privacy/cred-ltr.htm).

http://www.minotdailynews.com/news/arti ... leID=10509

Because of privacy laws, the Social Security Administration doesn’t inform people when their numbers show up with new names, nor does the agency release information if people discover other users, he said.

Why isn't a bill being pushed through Congress to remedy this situation?