Illegal immigrants & taxes

Naturally, illegal immigrants don’t fill out tax returns.

But are most of them paid under the table, or are they often given standard paychecks with all the withholding that they do not claim as refunds?

About 10 years ago my wife and I received a letter from the IRS claiming we did not include all the taxable income we received for the previous year on our tax return. I called the local IRS office and claimed innocence and that yes we did include all of the income we received. He said they had records showing my wife had worked at a restaurant in Ft. Lauderdale, Florida for 5 months that year and had worked under an assumed name. I corrected him, my wife worked for the same company all year in the state of Washington and that someone else had used her SSN. A few weeks later we got another letter and that is exactly what had happened, an illegal got a job and apparently made up an SSN for her employment, it was the same as my wife’s. That is one method for them to work and avoid taxes in their name.

So what happens to the money that the illegal paid in taxes then? Whover it was paid into your wife’s social security account and income tax account. I suppose it doesn’t count as “found money” to her, so the government just keeps all of it.

Workers paid under the table don’t pay taxes directly, but their employers have no documentation to deduct the wages they pay the workers, and end up paying taxes on the money themselves, probably at a higher marginal rate than the illegal would have paid.

I c an guarantee you that an employer who is knowingly employing an illegal alien in order to save money is not paying taxes on the under the table payment to said alien. If there is no other way (and I’m sure there are probably many) he will keep 2 sets of books, one of which will have no record of the money paid to the alien, either coming in or going out.

Well. Slight Nit Pick. An Undocumented Immigrant uses “fake” or real SSN in order to get a job, and not for the avoidance of taxes et al.

My understanding is that most undocumented workers who are not paid under the table do use fake SSNs, in which case the government ends up keeping all the tax withholding from their paychecks (since they cannot file for a refund). So not only are these illegal workers not avoiding taxes, they are actually paying more taxes than would be otherwise due.

RE: stolen SS numbers: the alien worker will file for 10-12 dependents, meaning his witholding taxes will be rebated to him. The unlucky (real) holder of the SSN will then get a bill (years later) for amount of money rebated to the alien (who by now has a new identity). What we are talking about is the underground economy-no cost to the employer-but the social costs (hospital care for the illegal) are borne by the US taxpayer.

An undocumented immigrant will, in general, work in a job site that does not report his/her “under the table” wages (usually wages are paid in cash) to the government (since obviously hiring an undocumented immigrant is illegal) or uses an assumed name and SSN. In the case of the latter, the undocumented immigrant will not, in most cases, claim refunds.

And he gets this in a check or :confused: ? As a social service provider for almost 13 years along the Texas-Mexico border and having worked with undocumented immigrants (particularly farm workers), I have never run across such incident. I have seen cases of undocumented immigrants owning land, but never doing such scheme. Can you cite particular report?

Here is an interesting report from the former Texas Comptroller of Public Accounts, Strayhorn, regarding the impact of undocumented immigrants to the state economy.

According to a lawyer on NPR’s Talk Of The Nation, many illegals do pay income taxes. They can’t get an SS number, so they have to apply for a tax number. Why would an illegal go out of his way to pay taxes, you ask? They’re hoping to build a positive paper trail toward becoming a citizen. Under the current system, it won’t help, but they know the laws can change.

Those who have bought a phony identity are using an SS number, either made up or copied from a real person. The made up kind are caught by the IRS in about 1-3 months. The copied kind, like in the OP, can take as long as a year.

But Carol Keeton Strayhorn is such a notorious Liberal!

(This is sarcasm. I’m a Texan.)

How dare you bring facts to the argument?



…FYI for all…I just posted that just so we get a macro economic look (from a State gov pov) at what some of the states are looking at when studying the issue of undocumented immigrants and their effect in our economy.

Rebated? If you are using a fraudulent (i.e. stolen) social security number, you are not going to be filing a 1040A at the end of the year.

Interesting, but limited in scope, and not necessarily applicable to the issue at large.

It seems to focus on income and expenditures to the state treasury. The introduction specifically mentions differing burdens taken on by local governments that do not paint as favorable a picture for them.

I’d be interested to see an analysis of the burdens borne by the average taxpayer. For example, the section of the report on Incarceration focuses only on the cost of facilities, services and salaries. I would like to see a comparison of the effect on citizens in terms of total property loss or lost income with the incarcerated illegal immigrants present and absent.

But you could claim 10-12 exemptions on your W-4.

They do indeed file and pay income taxes, sometimes with the same invalid TINs they bought- or more often with their ITIN, which is perfectly legal. The IRS is strictly enjoined from sharing suspicions about residency status with other agencies. The “illegals” file as they usually get all of their witholding back, nad it shows a paper trail.

Around 15 years ago there was a huge project done by the IRS as 100’s of thousands of Illegals were filing for more than a refund as they also wanted EITC- but usually for their kids still in Mexico. Claiming EITC for kids not here in the USA is not legal.

It appears slightly more Illegals are paid “under the table” than residents but not a lot more. Most get regular paychecks. Their employers want to make sure that they are seen to be treating their “Illegal” employees exactly the same as “legals” so that they have “plausible deniability”

dennis gallagher: “I can guarantee you that an employer who is knowingly employing an illegal alien in order to save money is not paying taxes on the under the table payment to said alien.” Gee, in order to hire this illegal some employer would be willing to lose his business, everything he owns and possible prison for Tax fraud? :dubious: Got a cite for this? My Bro worked a project along with the IRS. Employers of Illegals want “plausible deniabilty” and thus pay and treat their illegals just like other employees. It would be really stupid to risk everything to save a few bucks on labor. Finding a second set of book is very very damning evidence in Tax Court.

Yeah sure, the contractor who picks up a van load outside the local building supply store for a single one-time job pays in cash and only keeps paper reciepts showing “Armando Garcia” was paid $100. Which is legal, as Armando is a Contractor and Bob doesn’t need an TIN for Armando as he paid him under $400.

ralph124c ** “*RE: stolen SS numbers: the alien worker will file for 10-12 dependents, meaning his witholding taxes will be rebated to him. *” Got a cite for this? The IRS computers aren’t stupid you know. If Iris Brown has been filing for 40 years as Single, when Armando Garcia files with a different address, different job and 12 kids and a wife, the IRS knows full well Armando isn’t Iris. They just assign him an ITIN, assign his return for audit (to make sure he really has 12 kids) and Iris never knows. Note that the only way Armando can file with 12 dependents is to have 12 SSN for said dependents.

AskNott has the facts here. Many of the rest have been listening to too much Conservative Talk Radio. :rolleyes:

Even if they use a legitimate, but stolen SSN, which I think ralph124c is talking about, that still leaves me with a main question, in order to get EIC (file for dependents which I think ralph124c is talking about), the dependents have to have SSN s, wouldn’t that mean getting more SSN’s?

But the complete point was that this person would then in turn get his/her money rebated. How are they going to apply for EIC w/o SSN for the dependents? :confused:

And as I stated this pertains to the macroeconomics of the State of Texas. Take FWIW.


Another slight nitpick. Calling an illegal alien an “undocumented immigrant” is akin to calling a drug dealer an unlicensed pharmacist.