Tax Day: Illegal workers using IRS-approved ID's to paay up
Morocho, a food service employee, is working illegally in Minnesota. So are most of the clients at this tax clinic on Lake Street. They're among a record number of immigrants, most in the country illegally, who are using special taxpayer IDs that allow them to pay taxes without fear of deportation.
"Paying taxes benefits me and benefits the government," said Morocho, days ahead of today's tax filing deadline.
The IRS began issuing these IDs in 1996 for foreigners who did not qualify for Social Security numbers but earned income legally in the United States.
Since then, more than 10 million of these numbers have been issued, including a record 1.5 million last year, according to the IRS. Although precise numbers aren't available, most of those IDs have been used by illegal immigrants, according to a 2004 report by the Government Accountability Office.
Critics charge that the practice has "institutionalized illegal immigration." They're appalled that the same government that tells people they're not eligible to work here requires them to pay taxes in case they do.
"It's schizophrenic, and we have no one but our own government to blame for this," said Marti Dinerstein, a fellow at the Center for Immigration Studies, a national immigrant research group that supports limiting immigration. "This is something out there that our immigrant community is using. And it's totally legal."
The IRS, meanwhile, says it has the legal authority only to collect taxes - not to bust illegal immigrants.
"Our job is to make sure that everyone who earns income within our borders pays the proper amount of taxes, whether that income is legally obtained and whether the individual is working here legally," IRS Commissioner Mark Everson testified before Congress last year.
"If someone is working without authorization in this country, he or she is not absolved of tax liability."
A system under scrutiny
For years, workers without legal papers have paid taxes, often with fake Social Security numbers that employers have used to withhold income taxes and Social Security contributions.
But illegal immigrants typically didn't file tax returns, which allows them to receive refunds -- as well as to establish proof of U.S. residency. Both residency and tax-paying requirements are part of immigration plans being debated in Washington that could legalize thousands of workers.
The prospect of becoming a legal resident "is what everyone is thinking about here." said Morocho. But Morocho, like others at the clinic, said they're paying taxes because "it's the right thing to do."
Last year, 2.9 million tax returns listed at least one person with the special tax ID number, said Nancy Mathis, an IRS spokesperson.
The tax liability for returns processed with these numbers from 1996 through 2003 was $48 billion, said Mathis, citing the most recent information. Total refunds during the same period were $23 billion, she said.
In Minnesota, more than 13,400 of the numbers were used in 2005 tax returns, according to the Minnesota Department of Revenue.
That doesn't surprise people like Armando Vilchez, who oversees the free tax clinic for low-income workers where Morocho was meeting with a counselor. Vilchez says about three of every four clients use one of these numbers.
Morocho said he didn't file taxes when he moved to Minnesota seven years ago. As a young guy, living with a group of friends, he found it didn't really matter, he said. But since he got married had children, he said, the amount of money deducted "got a lot bigger." So a few years ago, he began filing.
"And this year, for the first time, I'm getting a refund," said Morocho, who hopes to take home an extra $2,000.
The average refund for taxpayers at this clinic is $1,000 to $1,500, Vilchez said. The immigrants are not eligible for the Earned Income Tax Credits, he said. And they will never be able to tap the Social Security or Medicare benefits they pay into -- unless they're able to become citizens.
The prospect of becoming a citizen one day is a huge draw. "That's what I'm working for," said Morocho, punctuating his remark by shaking his IRS envelope. "If you don't have legal papers, you don't get a better job."
