Parents will be paid hundreds of dollars in the coming months as the Internal Revenue Service begins disbursing Advance Child Tax Credit to help support families financially and fight child poverty. However, one significant group is left out: parents of undocumented children and certain non-citizenship children.
Tax law excludes these parents on the basis of immigrant status, although for many years the United States has dutifully paid state and federal income taxes, along with property and sales taxes.
Border controls in tax law are not new. In the 19th century, several states enacted unconstitutional tax laws to target migrants. New York imposed a tax on oceanic migrants for “hospital money.” Massachusetts added to its foreign passenger tax by requiring a $ 1,000 bail for each “mad, idiot, maimed, elderly, or infirm” newly arrived.
The Supreme Court found the taxes unconstitutional, stating that it was entirely a federal issue whether foreigners would be “forced to pay a tax before they can set foot on land.” Even after this decision, California imposed special taxes on Chinese migrants until the state’s Supreme Court intervened.
Taxes for migrants have largely evolved from explicit fees at ports of entry to punitive federal tax regulations that throw immigrants financially off track.
Although federal tax law allows and requires individuals without a social security number to file taxes with a unique tax identification number, these applicants are excluded from many tax credits. Keep in mind that the CARES law has tied not only recipients’ social security numbers but also those of their loved ones to COVID-era stimulus payments. The law initially excluded civil spouses from receiving payment if they submitted an application together with a non-citizen without a social security number. At the same time, citizens’ children of parents without a social security number were also left aside.
These exclusions reflected the restrictions on immigration status in the federal income tax credit (EITC) and child tax credit – two provisions on which working-class families and poor families depend. They also recall the direct cooperation of the IRS with the Department of Homeland Security in violent raids on the workplace. (An IRS investigation into a meat packer’s tax compliance investigation in Tennessee ended on allegations that armed state and federal officials violated workers’ civil rights with machine guns, racial slurs, and mass arrests.)
Americans seem skeptical of the tax-based enforcement of immigration, which is also based on uncertain legal bases. In a poll last year, there was more support than opposition for expanding pandemic payments to “those who pay US taxes,” although support for other law enforcement measures prevailed.
Recent lawsuits have challenged the exclusion of dependents of undocumented workers under the CARES Act. In the RV v. Yellen alleged citizen plaintiffs that denying emergency tax relief to otherwise eligible children due to their parents’ lack of a social security number violated the same level of protection. In another case, lead plaintiff Ivania Amador and her three children had social security numbers, but her husband did not. She argued that refusals due to the undocumented status of their spouses violated their marriage-based due process and equitable rights, as well as their rights of speech and association under the First Amendment. Border control under tax law can unconstitutionally exceed the limits of family integrity.
As the federal government financially pushes undocumented immigrants aside, some individual states begin offering lifelines. New York recently set up an Forbidden Workers Fund to provide financial aid to non-nationals who are excluded from unemployment insurance and federal programs. States like California and Oregon have now expanded their state-level EITCs to include undocumented immigrants, possibly including employment that is illegal under federal law. These finance and tax laws raise sensitive questions about where state authority ends and federal power dominates.
Federalism restricts the ability of states and cities to regulate immigration directly. However, despite these restrictions, states still have unique tax powers, particularly those designed to promote the health and safety of residents beyond immigration status. Cities and states are choosing to promote inclusion to offset the armament of federal tax law against immigrants. While the Supreme Court may ultimately again weigh the boundaries of state and local action, states and municipalities should for the time being feel legally safe to pursue a range of financial and tax policies that involve immigrants.
There are effective methods nationwide to counter tax violations that go beyond cooperation with the immigration authorities. In 2017, the Treasury Inspector General proposed a “more focused strategy” on employers and payroll providers to reduce tax violations. In contrast to applying tax law to the deportation of migrants, the focus on employers could generate the necessary income and match the employer-centric interpretation of immigration laws by the Supreme Court. In contrast, cooperation between tax and immigration authorities could hinder tax compliance for undocumented immigrants, fearing that sharing information could lead to deportation.
Tax oversight of poor immigrants weakens the boundaries between immigration and tax law to protect citizens and non-nationals alike. Respect for these borders is just as important as respect for territorial ones.
Shayak Sarkar is a lawyer and economist at the University of California-Davis, where he researches the interfaces between immigration law and tax and financial regulation.