IRS tries to reach illegal workers - Undocumented immigrants often entitled to refunds
Las Vegas, NV - Francisco Sarmiento, a 21-year-old Mexican immigrant who sneaked across the border three years ago, works for a landscape company and collects a paycheck, but he has never filed an income tax return.
He bought a fake Social Security number, "numero chueco" as it's known among working illegal immigrants, and has tried to avoid the government ever since.
"I am one of `those people,' " he said in Spanish as he left a music store last week, just two doors away from a tax preparation office near the intersection of Bonanza Road and Eastern Avenue.
But Sarmiento is precisely one of the people the Internal Revenue Service wants to reach as part of its efforts to have undocumented workers fill out tax forms.
The agency is providing money to community service agencies across the country for public education campaigns about a little known thing called the Individual Taxpayer Identification Number, or ITIN. The number is assigned to those without a valid Social Security number for tax filing purposes.
Zullie Franco, coordinator of the Low Income Taxpayer Clinic of Nevada Legal Services, said thousands of taxpayers in Nevada likely are working without valid Social Security numbers and are unaware they're eligible for refunds if they've overpaid.
"The bottom line for them is putting food on the table," she said. "So they work with invalid Social Security numbers, hide and live in fear. They don't file their tax returns because they don't know how it could benefit them."
Nevada Legal Services is a statewide nonprofit agency that provides legal assistance to poor people. The IRS this year provided the agency a $75,000 grant to inform low-income taxpayers for whom English is a second language about tax issues, including their rights, responsibilities and the ITIN.
No one knows exactly how much revenue is collected from undocumented workers in payroll taxes because the IRS doesn't inquire about whether taxpayers are working legally. But Las Vegas IRS offices report that since the beginning of the tax season, they have been seeing more than 100 tax returns a day filed by people using the ITIN.
The program is not without its detractors.
A Washington-based think tank released a report last fall that was highly critical of IRS efforts to provide illegal immigrants with the numbers.
In the report, "Giving Cover to Illegal Aliens," the Center for Immigration Studies concluded the IRS has not conducted necessary background checks on hundreds of thousands of immigrants before providing ITINs.
Steven Camarota, the center's research director, said the IRS could facilitate terrorist activity by distributing tax numbers without adequate investigation. He said the numbers could be used to help illegal immigrants establish bank accounts that could then be used to funnel money in and out of the country.
"We ought not to have a federal agency like the IRS facilitating violations of our immigration law," Camarota said. He said the IRS is taking a fresh look at the issue since the report was put out.
Bill Brunson, spokesman for the IRS's regional office in Phoenix, said Friday he had not heard of the report and declined to discuss its conclusions.
Earlier in the week, when discussing the general nature of the program, he said the ITIN "is strictly for tax filing purposes and can't be used for anything else."
He said that the requirements for being a resident alien for tax purposes are different than those of the Immigration and Naturalization Service. "We provide that number if, for whatever reason, that worker can't obtain a Social Security number."
Generally, immigrants who have not obtained legal status but have been living and working in the United States for a total of six months during the past three years can file tax returns using the ITIN. They also may claim dependents and qualify for child tax credits for up to $600 per child, Brunson said. People filing with an ITIN do not qualify for earned income tax credits.
The INS estimated there were more than 24,000 illegal immigrants living in Nevada in 1996, the latest year figures were available.
Brunson said the IRS generally does not share information with the INS. The only situation in which it could do so is if the filer is "a known criminal and they've been identified through other enforcement systems as a criminal. Otherwise, (sharing information) would be a disclosure violation."
Karen Dorman, officer in charge of the INS office in Las Vegas, said tracking down illegal immigrants through the IRS is not a priority, and would be difficult if not impossible because of privacy laws.
She said immigrants can use their IRS records to show they have lived in the country more than 10 years. At that point, the records could be used as supplemental information in immigration court in determining whether they qualify for legal residency status.
The IRS started the ITIN program in 1996 in response to the mounting workload in sorting through tax returns that were filed with bogus Social Security numbers. For those returns, Brunson said, the IRS would assign an internal number that would be valid only for that tax cycle, and would change it every year.
"Over time, this grew to be more and more," he said. "So we moved to the ITIN, where if a taxpayer can't get a Social Security number, we can still identify them for tax purposes. It's a number they can use year after year."
Erica Contrerras, a 29-year-old mother of two, said she and her husband were hesitant to file their income tax returns when they first arrived in the country seven years ago. Both entered illegally and were working with fake Social Security numbers in Reno restaurants. A notary public mentioned the ITIN to her husband and they were convinced it would be a benefit, she said.
"We were a little afraid because we knew so many people who told us to leave it alone and not get involved with the government because we might get deported," she said. "But we decided that if we're making money here, we want to do things right and develop a good consistent record. Someday, if there's an amnesty or when we've been here long enough to fix our (immigration) papers, it might help us."
Francisco Canales, who runs a tax preparation business in a heavily Hispanic neighborhood in northeast Las Vegas, said he long has been advising his clients to obtain the ITIN. He said most of his clients who file receive refunds. Only about 10 percent, he said, end up owing.
Camarota said the quantity of ITINs issued, his think tank estimates 500,000 since 1996, suggests the IRS is using the numbers to condone illegal immigration rather than to assist small-business owners and people who intend to acquire U.S. citizenship.
But Canales, an immigrant who came to Las Vegas from El Salvador 20 years ago, said he sees the effort "as a positive thing."
"It allows people to stop working clandestinely, and they can show they are not a burden on the state," he said in Spanish.
Thomas Rodriguez, a scholar who has written books on the Mexican immigrant's experience, said illegal immigrants have "contributed mightily to this country."
Immigrants not only contribute taxes through their paychecks, but through paying sales and property taxes, which are often factored into their rent, said Rodriguez, who works as executive manager of diversity and affirmative action programs at the Clark County School District.
"In Nevada and throughout the country, they are buying cars, homes and food, and all of the money is going into our economy," he said.
He acknowledges the ITIN program "is one of the many mixed messages the government sends us about immigrants."
"We keep saying, `Don't come, don't come,' but someone keeps hiring them."
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