Monday, April 16, 2007

Do Illegal Immigrants Pay Taxes?

According to the IRS, approximately 7.9 million W2’s were received last year where the name did not match the social security number. Many pro-amnesty advocates site this number as proof that illegal immigrants pay federal income tax. What they neglect to tell you is that illegal immigrants filing false W4’s are likely to also lie about the number of dependents they can claim in order to lower the amount of taxes deducted from their pay checks and the IRS’s ITIN (Individual Income Tax Number) which allows them to get back the rest by filling a tax return.

Created in 1996, the ITIN allows foreign citizens that do not have a social security number to file end of year tax returns. The IRS issued 1.5 million new ITINs in 2006, a 30% increase over the previous year. To receive a card, all one needs to do is send the IRS a copy of valid identification, such as the Matricula Consular card.

Once an illegal has obtained their ITIN they can use it for a whole host of benefits, the least of which is getting a tax return. For instance, Bank of America accepts them as valid ID when applying for mortgage loans and credit cards. Citibank does the same for credit cards.
Illegal immigrants who do use their ITIN to file a 1040 with the IRS may not be able to get the earned income tax credit, but they will still find a whole host of other benefits such as other tax credits and the ability to claim dependents living in Mexico.