I have heard claims in the news for years that illegal aliens (or undocumented immigrants, if you prefer) pay taxes even though they can’t collect Social Security. This suggests that they have acquired SSNs. But the SSA says if you are a non-citizen you must have work authorization to apply for an SSN.
So how are these people getting jobs?
They buy fake papers with a stolen SSN, or simply make up an SSN when working for an employer who can’t be bothered to follow the employment laws.
One way is to use someone else’s SSN. I knew someone who paid taxes under the SSN (with full knowledge) of her relative, who was a US citizen.
Any alien who is not eligible for a Social Security Number, but is required to pay taxes, can obtain an ITIN. This will enable them to file tax returns and pay taxes. The ITIN is not valid for employment purposes.
Of course, they need to provide an SSN to their employer and the employer will report their wages and withholding under that number.
I’m sorry that I cannot find a reference to the article, but there was story a few years ago about a man who was a citizen, who when he became an adult discovered he had a long credit history and had been paying taxes. Apparently, an undocumented worker obtained his number when the he was just a child and had been using the name and number ever since. The undocumented worker was apparently very honest and set up a nice life for himself. He had a mortgage and credit cards (which he paid) and all the rest.
Of course, the citizen had trouble. He could not get a loan because his debt to income ratio was too high, for example. Nobody would help him. So he tracked down the immigrant’s bank, went to his bank, and somehow convinced them to give him the balance of the alien’s bank accounts.
Both were charged with identity theft. I don’t know what happened to the alien.
This. They’re paying into the system under a bogus number with no expectation of ever getting anything back out.
This NPR story says that the IRS actually has a procedure for reconciling income reported on a W-2 under a fake SSN with the alien’s ITIN for aliens who want to file tax returns.
I don’t know anything about it.
Immigrants Working Illegally In The U.S. File Tax Returns Without The Fear Of Deportation
One of the few intelligent things I heard Trump say (a while ago) was that he wanted to fix the eVerify system so that employers could properly screen their prospective employees’ SSN. The corollary would be that only people with real SSN’s could get jobs. That would imply of course that rich business owners would be jailed or pay hefty fines if they did not comply - what are the odds. Canada is much stricter. When I worked on a payroll system in the 1980’s Revenue Canada was sending out notices to clarify the situation where people had obtained multiple Social Insurance Numbers (SIN’s) so they could earn income on one to build up points to collect Unemployment Insurance, while collecting on another. I knew a fellow who owned a McDonalds franchise - he would pay a fine every so often because a teenager would start with him, first job, and promise to obtain a SIN - then quit before they got it and never update him; employing someone without reporting a valid SIN is a $100 fine.
there was some movie where the joke was that “John Smith” was still working hard in California at age 100 while his SS pension went to Kansas.
And some people used to have all their paper ducks in a row but eventually one got out of line: if you enter the US as a student you get a legit SSN; eventually overstay your visa and you’re now “undocumented” but still have that SSN and it’s still legit. Depending on what the story in between is like, it may not even have that “student jobs only” (not the exact wording) stamp any more.
I currently do not have a work visa for the US, but I have a SSN and the card doesn’t have any limiting stamps. I’ve got better things to do than dodge la migra, but other people don’t.
This.
Went to work for a manufacturing company ten-plus years ago. One day a gaggle of U.S. Marshals show up looking for Bad Guy. Human Resources looks up his file and escorts the Marshals out to the shop. They find Bad Guy only for the Marshals to say he wasn’t the person they were looking for. Our employee had come across the border illegally and bought the identity of Bad Guy in order to work. I guess he also bought himself a one-way ticket back home.
They also pay sales tax and property taxes. Undocumented workers buy stuff like everyone else. If they own homes, they pay property tax directly; if they rent, they fund the landlord’s property tax payment.
Unless you work for cash only, live in a box under a bridge and catch/scavenge all your own food, you’re paying taxes.
You have to pay sales tax even when you pay cash.
eVerify is pretty good at determining whether So-and-So is authorized to work in the United States; it’s not nearly so good at determining whether the person standing in front of you rattling off that number is in fact So-and-So. A person with a misappropriated SSN and some fraudulently obtained documents will pass the screening too.
Moreover, any effective mandate on eVerify has to be able to cope with employers who don’t WANT to screen their prospective employees properly. These are employers who know full well they are hiring illegal aliens, and either don’t care or prefer it this way (people who fear deportation aren’t too likely to call OSHA or the Fair Wage & Hours regulators, e.g.).
When I applied for unemployment benefits, it came to light that someone had been reporting earnings on my SSN.
This created some problems for me, because even though my claim was approved, they wouldn’t actually pay my claim until they had resolved this. It was rather maddening, because there were only two possible decisions:
2)The income was earned by someone else, and I was therefore eligible for UI benefits.
The problem seemed to be that nobody at Workforce Solutions (NM state employment agency) seemed to know who should make that determination, but they were sure that it wasn’t them, and also sure that the claim couldn’t be paid until the determination was made.
It took about six months to get it resolved. The delayed payment ended up having some nice tax consequences.
Anyway, to answer the OP, in at least one case, the worker used MY SSN. It might end up increasing my SS benefit by a few cents a year…or not.
Part of the problem is that under the Obama administration, the feds cracked down on employers who were too vigorous in checking employee citizenship, on the grounds that they were discriminating against minorities. So employers were in something of a bind.
I assume this might ease up a bit under Trump.
Which is no deterent. Here, the penalty for employing an illegal alien is a 5 years jail sentence and a € 15 000 fine per worker.
Of course, nobody gets the max sentence, and there are way too few “work inspectors” to do a serious job. But the penalties not being a mere slap on the wrist presumably make some empoyers at least think twice about employing an undocumented worker.
It’s blatantly obvious to me that if you actually want to reduce illegal immigration, the only way is to go after the employers, not after immigrants who don’t have much to lose anyway.
I tried googling this and found they did a lot of I-9 audits but couldn’t find anything about Feds cracking down because of discrimination. Do you have a link or phrase I can google?
That’s what cwthree was saying. The only way to not pay any taxes is to not buy anything.
Unless you make your purchases in Delaware, Montana, Oregon, and New Hampshire.
Might be difficult. I work for an employee benefits consulting firm, and our legal team sends out bulletins about regulatory action trends with implications for employers, and this was summarized in one of them. But I didn’t see this in the regular news.
As I recall the issue, it relates to the type of stuff you’ll find at: Preventing Discrimination | USCIS.
As you can see, the general gist is that probing too hard on verification can get you in trouble for discrimination. IIRC one of the illegal actions that are particularly problematic is “reject[ing] documents that reasonably appear to be genuine”. This is a highly subjective standard, and is problematic for employers because most illegal immigrants who seek “official” (as opposed to off-the-books) employment have some sort of faked documents.
Basically, it’s a very fine line that an employer has to walk, and to the extent that you prioritize discrimination issues, then you’re going to push employers to the other side.
You didn’t read the bulletin very clearly. Employers are only liable if they discriminate against “employment-authorized” individuals.