IRS Doesn’t Care if Filers Are Illegal Aliens

The Internal Revenue Service is reaching out to illegal aliens again, trying to get them to file tax returns even though they’re not here legally.

The IRS understands that they can’t get valid Social Security numbers unless they’ve applied for amnesty and have permission to work. No problem: They can file under a special number--”SSA 205(c)”--and it won’t get them deported because “tax information is not (sic) routinely shared with the Immigration and Naturalization Service.”

Nevertheless, some people are suspicious. Probably with cause.

The number of illegal aliens here is currently estimated at 1.8 million to 3.1 million, says Robert Warren, INS director of statistics in Washington, but he thinks that the estimate is high. Some estimates have been even more inflated, says Jeffrey Passel at the Urban Institute, because “there’s been a lot of immigration, and there’s clearly a presence of foreign-born people in big cities. There’s a tendency to lump them together as illegal.” Today’s estimates, moreover, have come down from 1987 estimates of 4 million to 5 million, because, shortly thereafter, about 3 million were legalized under the national amnesty program.

Tidy reporting to tax authorities is not a priority for most illegal workers. They want work, and they need a Social Security number to work, particularly under current law making employers responsible for checking the papers of people they hire.

Some have numbers specifically “not valid for employment,” issued for identification alone, usually to visitors on tourist or student visas. Even more have phony numbers, made up or stolen and sold to any number of illegal workers. Many file no tax returns at all, willing to forfeit the money withheld from their paycheck.

The IRS is interested only in the money. Its assignment is to enforce tax law, period, and its spokesmen will say publicly that they don’t care how money is made-- gambling, prostitution, other crimes--if proper tax is paid on it. “We don’t make moral judgments,” says IRS spokesman Rob Giannangeli in Los Angeles. “We just care if it’s taxable.”

Illegal aliens are specially sought out because they may someday apply for amnesty or citizenship, says L.A. District Director Mike Quinn, “and it’s better for us to have them under a system where we can find them easily.” Furthermore, he says, “from a taxpayer service point of view, we’ve been criticized for not dealing with refund issues as well as with balances due, and the majority of people we’re trying to attract would have refunds.”

Some are still too afraid to file, and the forgone refunds are a windfall for the government. Many illegal aliens, however, have driver’s licenses, pay taxes, even file for refunds as a matter of course, says Los Angeles immigration lawyer Carl Shusterman, figuring “that the INS is here, the IRS there, and never the twain shall meet.” But they do worry, “supposing that somehow all these agencies talk to each other.”

In fact, the SSA 205(c) program does have some limited use, speeding up IRS processing of such returns. But it also offers some limited dangers to the particular taxpayer.

Most commonly, employers file notice of earnings and withholdings with the Social Security Administration (on W2s), and employees file with the IRS, and the two agencies share data with each other and with state tax departments. If the computers indicate a Social Security number is shared, stolen or made up, the IRS and Social Security both query the taxpayers involved; usually the legitimate one answers fast.

Both then try to straighten out the identifications. If one is not valid, the IRS assigns an internal number that looks like a SSN to process the return; an “SSA 205(c)” on a form triggers immediate assignment of such a number, saving the IRS query time. Social Security, given an invalid number, posts the information available-- name, earnings, employment--into a “suspense file” that can be searched for credits years later, when and if the person gets a valid number.

For taxpayers working on a not-valid-for-employment number, the IRS SSA 205(c) program is unnecessary. Such numbers, being unique to the individual, are no problem to process, and the IRS doesn’t know or care if the taxpayer isn’t supposed to work. Social Security computers immediately identify them as not-for-work numbers, but they were--at least originally--assigned legitimately, and that agency also accepts them for credit and even benefits, setting no judgment on the legality of the work.

But here’s the catch: The INS does care, and while it’s technically true that the IRS doesn’t send such information to the INS, Social Security does, annually.

Already this seems an odd situation, this group of government agencies, each interested only in its own laws, functions and concerns. As long as government gets its cut of wages, the IRS doesn’t even have a statistical interest in the number of people working illegally: It keeps no count of “SSA 205(c)s” filed. Similarly, Social Security keeps no data on the legal status of workers.

One might think that what’s illegal is illegal and that everyone should care. But not everyone can enforce, and perhaps therefore, they must care unequally, or care differently, with some presenting what seems a tacit endorsement of the undocumented worker’s presence.

Indeed, some things may simply be unenforceable. The INS does care, but the kind of information, and the form in which it’s shared, make it useful mostly as “intelligence,” providing leads on employers who exhibit a pattern of hiring illegal workers. Even there, says INS spokesman Duke Austin in Washington, “we get more direct leads from the public calling in.”

As individual reports, moreover, the lists are “virtually unusable,” says Shusterman, a former INS prosecutor. “To act on them would be like bailing out the ocean barrel by barrel.”