With the tax deadline approaching, illegal immigrants are sending in federal returns in what appear to be record numbers despite fears heightened by recent immigration raids around the country.
The increase in filings comes amid talk of an immigration overhaul, with some proposals introduced in Congress linking amnesty to the payment of taxes. Many illegal immigrants showing up at tax preparation offices around the country say they hope that filing a return will create a paper trail that could lead to citizenship one day.
In Raleigh, N.C., a tax preparer found 350 immigrants waiting outside his office at 7 a.m., including one dragging a suitcase that held $14,000 in cash for back taxes. In Baltimore, a community agency offering free tax help was deserted the day after immigration raids elsewhere in the city rounded up 69 people - and crowded again within 24 hours.
A help center in New York City's Queens borough did record business among illegal immigrants such as Dionicio Quinde Lima, who has worked in construction strictly off the books since he arrived from Ecuador three years ago, but was eager to join the fold of U.S. taxpayers last week.
"I feel it's my responsibility to pay," said Lima, 39, clutching a $202 money order for the Internal Revenue Service. "And if it helps me get papers, fine. The most important would be a permit to travel back and forth to see my family."
Illegal immigrants do not have Social Security numbers, but the IRS allows them to file taxes by assigning applicants individual taxpayer identification numbers. The numbers were introduced in 1996 to encourage non-citizens with U.S. income, including foreign investors, to file returns. It is generally accepted that most of the 11 million numbers issued since then have gone to illegal immigrants.
Taxpayer number
In the 2005 tax year, the last for which such data is available, 1.9 million returns were filed with the primary taxpayer using an individual taxpayer number, known as an ITIN, up 30 percent from 2004.
Applications for the numbers spiked last year, with 1.5 million new ITINs issued through the beginning of November, more than any full year since the program started.
Nancy Mathis, a spokeswoman for the IRS, said the agency did not know the reason for the increase, but added, "It is likely due to more effective outreach by community organizations and proposed legislation last year linking payment of taxes to eventual citizenship."
In 2005, more than $5 billion in tax liability - the total owed, including money withheld from paychecks during the year - was reported in the 2.9 million returns that listed at least one person with an ITIN, she said. From 1996 to 2003, such filers reported nearly $50 billion of tax liability.
Organizations pushing for stricter immigration enforcement have criticized the use of the individual numbers by illegal immigrants, saying that allowing them to file returns, pay taxes and receive refund checks legitimizes their illegal presence. The IRS says it is just doing its job as a tax collector. It is barred from divulging taxpayer information, with limited exceptions, to other agencies, such as the Department of Homeland Security.
"Clearly, we maintain a separation between the two systems," Mark Everson, the commissioner of the IRS, said recently. "We want your money whether you are here legally or not and whether you earned it legally or not."
Because most immigration bills make the payment of back taxes a prerequisite for legal status, that message seems to be getting through more clearly than ever.
"Right now, there's quite a stampede going on in many areas, including mine," said Blaire Borthayre, a consultant in Latino marketing based in Raleigh who described early-morning crowds gathering outside Family Tax Service, her husband's tax preparation business. "It's word-of-mouth."
One client, she said, was a Mexican man who lugged in a suitcase holding $14,000, cash he had set aside to pay his taxes over six years of work as a landscaper. Like many, he had only recently learned that he could file a legitimate tax return, said Borthayre, who has written several books on tax preparation with ITINs.
Like Social Security numbers, individual taxpayer numbers have nine digits, but all begin with a "9." The appeal of the numbers grew as they were accepted in some places as alternative identification to open a bank account, qualify for credit or even obtain a driver's license - all uses that the IRS opposed and has tried to curb, Mathis said. Since 2003, applications for an ITIN must be accompanied by a tax return, with few exceptions. To avoid confusion with a Social Security card, the IRS now sends a letter assigning a number, instead of a card.
In opposition
Those changes did not mollify critics such as Mark Krikorian, director of the Center for Immigration Studies, which opposes bills that would let some longtime illegal residents achieve legal status.
"Almost all the people filing tax returns are doing it because they're going to get tax refunds," Krikorian said. "It's a bad thing, because they're not obeying the law - they're deciding which laws they prefer to obey. If they were interested in demonstrating their law-abiding nature, they would pack up and go home."
The IRS did not provide a breakdown of how many returns filed under ITINs resulted in refunds. Mathis said each year "a couple of billion dollars" in potential refunds goes unclaimed by more than 7 million wage earners whose paychecks bear false Social Security numbers. In addition, the same wage earners provide the Social Security system with a subsidy of as much as $7billion a year.
At a senior center in Jackson Heights, Queens, where Lima waited with an envelope bearing a label "Important Tax Records," organizers of the free tax-help program said ITIN refunds were much less common there than tax bills.
Obeying law
Of 1,700 ITIN returns prepared there from mid-January to early April, two-thirds of the filers owed money, said P.J. Kim, director of income policy at Food Change, a non-profit agency in New York City that uses laptops and software lent by the IRS. The average income was $9,400 a year, the average tax bill was $623 and the highest was $7,275.
"It's certainly understandable that given the immigration debate, people want to have some documents that they've been here working and paying taxes," Kim said, adding that ITIN returns are dwarfed by those Food Change prepared for 40,000 legal workers at 10 free tax-preparation sites around the city. "And people want to try to do what they can to obey the law even if they're here illegally."
Others are afraid, but file anyway, said Lourdes Montes-Greenan, Latino Services Manager for the non-profit East Harbor Community Development Corp. in Baltimore, where a day of immigration raids around that city disrupted tax preparation, even though her office was not raided.
"The day after the raid, nobody showed up in the office," Montes-Greenan said. "People were scared." Yet by the end of the week, she added, the flow of taxpayers was as high as ever.
She cited construction workers who declared $25,000 in cash income and ended up owing as much as $4,000 to the IRS, including their employer's share of Social Security and Medicare. "When I explain to them they may end up paying more, they say it's OK," she said. "They say they want to be compliant. In case immigration reform comes, they want to be ready."