IRS Tries to Ease Noncitizens’ Fears of New ID Numbers

With the income tax filing deadline approaching, a new Internal Revenue Service requirement that illegal immigrants and many other noncitizens obtain new identification numbers has generated widespread confusion and fear.

Many immigrants in Los Angeles and other communities nationwide worry that the new numbers and related taxpayer information could be turned over to the Immigration and Naturalization Service and used to track down and deport the undocumented--something IRS officials flatly deny.

“This number is strictly for tax purposes and has nothing to do with immigration matters,” said Steven Jensen, IRS district director in Los Angeles. “There is absolutely no intention to provide this material to the INS.”

At the same time, the IRS is trying to knock down a completely contrary set of erroneous rumors: that the new numbers authorize employment in the United States or help illegal immigrants attain lawful status.

The revamped IRS numbering system does not alter anything for the vast majority of taxpayers--both citizens and legal immigrant noncitizens who possess valid Social Security numbers or are entitled to get them. Foreign nationals barred from employment in the United States--including those here legally with student and tourist visas--are ineligible for Social Security cards.

Along with illegal immigrants, those obliged to acquire the new identification numbers include overseas investors earning dividend and real estate income in the United States, and Mexican and Canadian nationals claiming exemptions for noncitizen children and spouses still residing in their homelands.

Some social service agencies working in immigrant neighborhoods have openly discouraged clients from applying for the new IRS numbers--even though inaction will inevitably cost many taxpayers their refunds, which could be thousands of dollars in some cases. Reports in Spanish-language media linking the new mandate to prospective INS enforcement have exacerbated fears.

“I cannot in good conscience recommend that people apply for this number based on flimsy assurances that the information will not be turned over to the INS,” said Juan Jose Gutierrez, executive director of One Stop Immigration, an East Los Angeles-based social service agency that is fielding thousands of related inquiries. “This is creating mass panic.”

The new requirements underscore an economic anomaly: The undocumented may be legally barred from working in the United States, but they must pay taxes on any money they do earn.

“The panic in the community over this issue tends to expose the lie in the theory that undocumented people don’t pay taxes,” said Cecilia Munoz of the National Council of La Raza, a Latino advocacy group.

Starting this year, taxpayers, spouses or dependents lacking Social Security numbers or the new, nine-digit Individual Taxpayer Identification Numbers can no longer be claimed as exemptions on federal tax returns. Those submitting returns without one or the other number for each person listed face having their exemptions disallowed and their tax recomputed. They may also face a $50 civil fine.

Driving the policy shift, officials say, was the government’s desire to improve the capture of millions of dollars in suspected unpaid taxes amassed by investors residing abroad.

But the largest population affected so far is illegal immigrants, who number more than 5 million nationwide, according to government estimates, and are mostly of working age. Immigrant-heavy Southern California leads the nation in applications for the tax number, although requests nationwide by mid-February only totaled 328,000.

Anticipating mounting demand as April 15 nears, the IRS in Los Angeles hired 20 part-time staffers this month to help process requests for the new numbers. But observers say demand, while steady, has been held down by widespread apprehension in a community that is wary of contacts with government agencies.

Although the IRS is legally barred from sharing data with the INS, many fear that a hostile Congress could easily amend the tax code and direct tax authorities to turn documents over to the immigration service. In some limited cases, the IRS is obliged to share certain taxpayer information with specific agencies, including the Department of Justice and Department of Education.

IRS officials, who call the guarantee of confidentiality a linchpin of the tax collection system, vow to resist any congressional effort to provide data to the immigration service. The IRS regularly processes returns from gamblers, prostitutes, drug dealers and other criminals without reporting them to the police.

The specter of IRS-INS collaboration has resonated at a time when many immigrants, legal and illegal, say they feel under attack. The timing of the tax policy--as new federal laws have eased deportation procedures and slashed public benefits for immigrants--has also served to raise anxieties.

An unrelated but little-noticed provision of last year’s congressional welfare overhaul made illegal immigrants completely ineligible for the Earned Income Tax Credit, which can shave up to $3,000 off the tax liability of low-income families.

And an equally obscure section of the sweeping new federal immigration law passed last fall bars illegal immigrants from collecting Social Security retirement benefits, notwithstanding how much they have paid into the system.

Despite the chilled atmosphere, many illegal immigrants are overcoming their fears and seeking the new ID number, thus enabling them to claim exemptions.

“I was afraid to come in at first, but finally I decided this was the only way I would ever get something back for my taxes,” said Alfonso Servin, 30, a laundry worker and father of three from Mexico. “We work hard, and we can sure use whatever taxes we get back.”