Statutes of Liberty: Tax Regulation and Undocumented – You Do not Get What You Pay For

This sponsored column is by James Montana, Esq., Doran Shemin, Esq. and Laura Lorenzo, Esq., practicing attorney with Steelyard LLC, an immigration law firm in Arlington, Virginia. The legal information given here is of a general nature. For legal advice, contact James to make an appointment.

“Tax Law and the Undocumented” was one of the less popular choices in our glorious Readerpalooza poll, but it’s tax time and we want to make sure this information is out there because someone really needs it. (Our motto here in the Statutes of Liberty is: “Reduce unnecessary suffering: it takes longer than expected.”)

So it’s time for a Q&A between our imaginary interviewer Cosell and our non-imaginary founding partner.

Cosell: Let’s get down to business. Do illegal immigrants – undocumented, what-have-you – have to pay taxes?

Montana: Yes. Paying taxes on U.S. income is required by federal law whether you’re here legally or illegally.

Cosell: But they don’t have social security numbers, do they?

Montana: Some of them do. Immigration is complicated. (Until 1974, you didn’t have to produce any evidence at all to get an SSN – you just asked for one. See here.)

Cosell: OK wise guy, but how do you pay your taxes without a social security number?

Montana: The IRS gives you what is known as an ITIN (Individual Taxpayer ID Number), which serves as a substitute for an SSN. Having a unique taxpayer ID number allows the IRS to keep an eye on you year-to-year.

Cosell: But come on. It would be stupid to give your address and name to the federal government if you live in this country illegally. Why on earth would anyone do that?

Montana: Many of our customers really want to pay taxes. They see it as part of the responsible people of this country. Also – again, immigration is complicated! – There are many families of mixed status. For example, dad has TPS, mom is undocumented, one child is undocumented, and the two younger children were born here. There are three legitimate social security numbers and two ITINs in this family. Papa’s employer will withhold his income and he will want to file a tax return.

Cosell: But doesn’t the IRS report you to ICE?

Montana: There are many who fear this, but federal law generally prohibits disclosure of tax information for immigration purposes. This is a controversial area of ​​law, but we believe that people should pay their taxes. First of all, it’s the right thing to do. Second, paying your taxes is useful evidence of the physical presence and compliance with U.S. law that your immigration attorney will be happy to see.

Cosell: Let’s assume I’m undocumented. Should I let my cousin’s boyfriend prepare my taxes? I hear he’s super good at it – always gets the best refund!

Montana: God we get this all the time. NO NO NO NO.

Cosell: Why not?

Montana: Because your cousin’s boyfriend is an idiot. He will no doubt claim (1) the wrong number of family members, (2) write that you are “head of the household” if you are not, (3) write down his address rather than yours “just to make things easy keep and usually make a dog breakfast out of the whole thing.

Please contact a licensed tax advisor or CPA. Free tax preparation is available from the Enterprise Development Group (EDG) here in Arlington. If you live in DC or any of the suburbs in Maryland, visit the Catholic Charities Financial Stability Network. If none of these procedures work for you, contact a physical H&R block office. H&R Block takes more of your refund than a free preparer, but they’re still better than the alternative.

Cosell: What’s your favorite story about unlicensed accountants?

Montana: There are so many. My personal favorite is Kenneth Mwase, whose unlicensed tax business not only exempted customers from their refunds but (allegedly) drove them to ATMs to ask for more money. After his conviction, he fled to South Africa with a forged Zimbabwean passport. It took an international manhunt to find him. Why pay for this type of service when you can get decent tax advice free of charge from a friendly retired accountant?