Part of the proposed legislations in regard to illegal immigrants is to require them to pay back taxes. This is ridiculous. If they come out of “hiding” which they would feel safe to do at that point, they could file and get an earned income credit and actually get several thousand dollars for each year; if married with children, the same, only with a much larger credit and the additional child tax credit. So, having them file tax returns to report past income and pay tax would require a major change in the tax law excluding them from these benefits; and at that point we would be subject to more emotional rants saying we are racists. My suggestion would be to make them pay tax strictly on their gross income at a given percentage. Period.
What makes you think they don’t file taxes? AFAIK, most do. They have taxes withheld, thus, they have paid taxes even if they didn’t file.
And- few of them would qualify for EIC, as their kids are in Mexico, thus not valid for EITC purposes.
Sure, they have that provision in the proposed law. But it’s more or less just boilerplate.
Illegals don’t file tax returns because they don’t have a valid SS number. the computer will reject the return it there is no valid number. And letters will go to the employer.
That leaves the majority who don’t have taxes withheld because they are self-employed, and thus don’t pay in anything, for example, mowing and landscaping; babysitting/nanny; construction work; many job are classified as independent contracors and income and self-employment taxes are only paid when you file your tax return. In some states you have to provide two documents proving citizenship in order to be hired as an employee so illegals avoid these jobs. And many are just paid cash.
Of those that file returns many claim their children in Mexico. And yes, they can take them if they are dependents. Your children don’t have to live with you. I’ve seen many audits where they were required to provide birth certificates from Mexico. the other thing they do is use other people’s children to qualify for EIC. EIC is one of the biggest areas of fraud. But in both cases, you are talking about people who are here legally. Those who are here illegally, believe me, do NOT file tax returns. Too big a risk.
Few jobs held by illegals qualify for independent contractor status. If the employer tells you when and where you must work, you are not an independent contractor. Failure to withhold taxes is a violation of the law, and the employer should be prosecuted.
You’re wrong.
I repeat: you’re wrong.
That’s not how fake SSN’s work.
One more time: You. Are. Wrong.
This comes up over and over again, and I usually post the same set of facts, but it never seems to make any difference.
Oh well. Here goes…
Link.
That’s just for Social Security, but I can find more if you want.
Well,**black455 ** has done a very good job of telling you why you are wrong, but here’s a few more.
Although the IRS computer will reject a dependent if they have a invalid SSN, they won’t reject a return. Those go into the “Non-Masterfile”. It’s quite common, the iRS is used to it. You’d have to be crazy to think that if a return came in with a check, and the SSN was a mismatch, that the IRS wouldn’t cash that check. Trust me, having had the tour of the Fresno Service center, the IRS will cash just about everything. Many Illegals have ITINs:
"*ITINs are issued regardless of immigration status because both resident and nonresident aliens may have U.S. tax return and payment responsibilities under the Internal Revenue Code.
Individuals must have a filing requirement and file a valid federal income tax return to receive an ITIN, unless they meet an exception.
What is an ITIN used for?
ITINs are for federal tax reporting only, and are not intended to serve any other purpose. An ITIN does not authorize work in the U.S. or provide eligibility for Social Security benefits or the Earned Income Tax Credit. ITINs are not valid identification outside the tax system."*
Yes, some of any group of people are paid cash “under the counter” and don’t file. If your income was low enough (say, you are a HS kid who mows lawns for your neighbors), you would likely get away with it for a while. However, try owning a home, a credit card or a vehicle and not filing for a while. :dubious: I suppose as a %, Illegals are somewhat overreprsented in that gruop, but not by much. In order to maintain “plauible deniability” an employer wants to get a copy of a fake ID, then (and this is very very important) treat the possible illegal exactly like every other employee he has. Which means same pay, same witholding, etc. The INS does raids on dudes they think are hiring illgeals- and this isn’t very scary for an empoyer with plauible deniability. The freaken IRS raids employers who pay their employees under the table. And, that’s very scary. Usually, you lose your business due to the back payroll taxes (and you are then required to pay ALL the taxes which would have been due out of your own pocket, with fines & penalties for 7 years or so, this is usually a killer. Ask Willie Nelson.)
Yes, if you are a US Resident (illegal or no, the IRS cannot ask), you may claim your depedents in Mexico or Canada (but nowhere else!). BUT, you cannot claim EITC for them; for purposes of EITC such foriegn dependents are invalid. “The child must share the same domestic principal place of abode with the taxpayer…” "The credit is denied to taxpayers who are not eligible to work in the USA. (this very strongly implies that there are TAXPAYERS who are not eligible to work in the USA).(Master Tax Guide @1375, refers to IRC @32)
And, you won’t have a SSN for the kids, either, and the computer will reject a dependent without a valid SSN. They can & do have ITINs, which is OK for the dependency deduction, but not the EITC.
My Bro is an EA (enrolled agent) who worked for the IRS for years and now does Taxes. He assures me that the IRS audits many many illegals, in fact it’s “bread and butter” for the lower graded auditors. Although the IRS did not ask if they were in the USA legaly, usually the Immigration stattus can be told if the return uses an ITIN or an invalid SSN (what you have is a SNN that is used by two taxpayers. One is Midred Smith of Dayton Ohio, who first used it in 1963. The other is Jorge Gonzalez, who is shown as first using that ssn in 2002. Guess which one is the “Illegal” 
). Indeed, just about the only issue with such taxpayers is whether or not they qulify to claim the dozen or so dependents they claim live in Mexico. The big issue is Support- did the “taxpayer” send enough cash to support than many people, and can he verify it (usually by Wire reciepts, much of the cash is Wired). My Bro has also represented quite a few Illegals in audit, and he assures them that the IRS has a “don’t ask don’t tell” policy (at least for now, anyway) and that all the IRS cares about is THE MONEY. Which is as it should be, IMHO.
I agee and thousands of Revenue Officers are out in the field doing just that. Collecting the money that employees were refunded on their tax returns and that the employer never deposited. They failed to file 941’s and deposit what they withheld from the employee’s pay.
Now, actually, telling someone when and where they work does not make them an employee. It’s more a matter of control. And it’s sometimes not easy to know whether or not someone is independent. In Tennessee and Georgia, for example, I saw a lot of 1099’s issued to people that probably should have been employees. But, the “employer” didn’t want to withhold and have to pay their share of FICA plus be under the different rules being an employer. Unfortunately this is an area where there is a lot of abuse because obviously it can’t be monitored properly as too much of it goes on. In any case, two examples: The man and his workers that mow the lawns and do landscaping in my mother’s neighboorhood are independent contractors by definition. My ex-daughter-in-law who goes to the homes of others to take care of their autistic children and gets these jobs through an agency is an independent contractor. The men who go to work centers in various large cities and wait for people to come by and offer them jobs for a few days, doing grunt work on a construction site, for example, are independent contractors; the men who pick fruit and vegetables, cut apricots, etc. are independent contractors.
My son managed a restaurant where it turned out a lot of the kitchen staff was illegal. Yes, they did withhold on these people because they had presented fake Social Security numbers. But this only goes on for so long, until IRS sends a letter saying they can’t match the Social Security number with the name. But, in this particular case, the restaurant was raided and they were all taken away by INS. Of couse my son got a call, as I’ve mentioned before, 1-2 weeks later after they got a new fake Social Secuity card and wanted their jobs back. Let see, the exemption and the standard deduction add up to $8200.00 so they pay in maybe $300-350 for the year that they don’t get back. You can multiply this by several million if you want, but it’s not even a drop in the bucket compared to the annual revenue from tax paid in the United States.
Actually, telling someone when and where they work does not make them an employee. It’s more a matter of control. And it’s sometimes not easy to know whether or not someone is independent. In Tennessee and Georgia, for example, I saw a lot of 1099’s issued to people that probably should have been employees. But, the “employer” didn’t want to withhold and have to pay their share of FICA plus be under the different rules being an employer. Unfortunately this is an area where there is a lot of abuse because obviously it can’t be monitored properly as too much of it goes on. Some examples of jobs that are independent are: the man and his workers that mow the lawns and do landscaping in my mother’s neighboorhood are independent contractors by definition. My ex-daughter-in-law who goes to the homes of others to take care of their autistic children and gets these jobs through an agency is an independent contractor. The men who go to work centers in various large cities and wait for people to come by and offer them jobs for a few days, doing grunt work on a construction site, for example, are independent contractors; the men and women who pick fruit and vegetables, cut apricots, etc. are independent contractors. People who work on fishing boats in most cases are independent contractors.
My son managed a restaurant where it turned out a lot of the kitchen staff was illegal. Yes, they did withhold on these people because they had presented fake Social Security numbers. But this only goes on for so long, until IRS sends a letter saying they can’t match the Social Security number with the name. But, in this particular case, the restaurant was raided and they were all taken away by INS. Of couse my son got a call, as I’ve mentioned before, 1-2 weeks later after they got a new fake Social Secuity card and wanted their jobs back.
I don’t understand why it’s important that some illegals pay in some small amount of taxes and FICA (compared to our annual revenues it miniscule); one free visit to the emergency toom and it’s gone. Hospitals that are innundated by illegals (and others) who can’t pay have to be subsidized with payments from Medicare. They are called Disproportionage Share Hospitals. These payments were meant to help poor people who are citizens, not provide care for citizens of other countries.
People are generous until it affects them; then, suddenly, it’s why am I subsidizing people who are citizens of another country to my detriment? I think it’s because the numbers of people here illegally are now so great and the effects are filtering down and affecting more and more people. Just my guess.
I am not sure I am following along. Both black455 and DrDeth raised the point that many illegals have a SSN and their employers withhold taxes normally. But you indicate that illegals pay a small amount of taxes. What taxes are they not paying? As per your OP, what taxes would they be obligated to pay back-taxes on?
What does that have to do with anything? As the article I linked to earlier demonstrates, about 75% of all illegals have taxes withheld from their paychecks. Taxes that they will never see a refund for, plus paying in to Social Security and Medicare.
So what you’re saying is that they paid taxes, yes?
Oh, hell.
One more time: Most illegal immigrants pay in to Medicare, just like everybody else. Furthermore, they pay in to Social Security, which they will never receive when (if) they retire. In addition, they pay local sales taxes, just like everybody else. Finally, they pay income taxes, and they will never, ever get the refunds that any law-abiding worker of a similar income level would be entitled to.
My wife and grossed about $50K last year, and I’m willing to bet that we paid less in income/payroll taxes, total, than the typical illegal immigrant making half of what we did.
Once again: the entire premise of your argument is incorrect. If you disagree with any of my statements, please provide some kind of evidence to back up your position.
Good for You, Black 455!
I regretfully note that it doesn’t matter how many times you present the facts; people who want to blame other people who seem …different? alien? foreign?..will continue to circulate this stupid idea that you can’t pay taxes without a Social Security Number.
I’ve certainly advised enough people who fell in love with an American, got married, and then found their perfectly ordinary applications for permanent residence turned down because some blithering idiot clerk at the INS (now the USCIS, of course) CAN’T READ to get an ITIN and pay taxes anyway, no matter how they are making money. At least when you FINALLY get the Immigration “Service” to acknowledge that it has made a giant mistake and the poor guy or gal in fact is legally entitled to permanent residence, the “alien” won’t be accused of poor moral character for failing to pay taxes.
You are very right, and completely wrong. “Illegals” don’t earn a lot of income, and thus their taxes don’t pay for the services they recieve. But that’s true of most Americans, and definately anyone earning less than average income. So? If you had a bad year and got laid off, and had to use the County hospital would you want them saying “No, sorry, you didn’t earn enough”? I will admit that perhaps the Feds need to help out a bit more for those states which get an unequal “burden” of “illegals”- but it’s not because illegals don’t pay their fair share of taxes.
Illegals generally pay as much in taxes as native born citizens who earn the same (which isn’t much, sure). Thus they are the same burden. Now, sure- a lot of lower income people do put a burden on the system. But “illegals” don’t put a larger burden on the system than native born citizens do at the same income level.
black455- you make mostly good points. But I can assure you (or rather my Brother assures me) that most Illegals can & do file their taxes and can & do recieve a refund. No EITC, of course. It is true that generally they won’t get to collect Soc Sec unless they become Citizens.
I’ll take your word for it. My bad.
There are 2 groups of illegal workers in this discussion. One group works for hard-shell companies and one group works for soft-shell companies. The difference is the size of the company and the ability (or inability) to hide workers on paper. An example of a soft-shell company would be roofing, siding or drywall companies. You can operate a very small crew that requires little training. On paper you only need a couple of legal laborers to make it look legitimate yet make large sums of money working 2 crews. The crews can be paid in cash while the operator conducts business in a normal manner.
What percentage of illegal workers work on a cash basis I can’t say but I’ll go out on a limb and say it’s in the millions.
Very true. However, also do US born citizens work on a cash basis. Now, I do know that employers live in fear of attracting the notice of either the IRS or INS (but the IRS is far more scary). But do note- if the IRS raids you for “paying employees under the table” it currently uses a “don’t ask don’t tell” policy as regards whether or not the “employees” are legal or not. The INS does nothing of the sort, and if you are paying your “illegals” under the table, they will very happily tell the IRS. So, if you are employing “illegals” there is a stronger motive to NOT pay them cash under the table. I don’t doubt that some “illegals” are being paid cash under the table. But is the % higher than similar “legal” workers in those positions?
So, what *you * need to do is prove that as a % of all workers in those sorts of “soft-shell” companies, that Illegals are paid “under the table” more often than Residents/Citizens are. In other words- CITE? :dubious: