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More illegal immigrants filing their federal taxes

Critics who back tough enforcement say the U.S. sends mixed signals.

By ASSOCIATED PRESS
Published April 13, 2007

RICHMOND, Calif. - Carlos Diaz broke the law when he crossed the border and took a job as an office janitor. But he's not about to break another by failing to pay his income tax.

"I've been talking to other people who've done it, and I want to follow the law," said Diaz, an undocumented immigrant from Guatemala who was seated in a tax preparer's office in Richmond.

Tuesday is Tax Day, when millions of illegal immigrants find themselves collaborating with one federal agency - the Internal Revenue Service - while trying to avoid another - Immigration and Customs Enforcement.

They hope a track record of on-time payments will aid their citizenship applications, but critics who favor tougher enforcement of federal immigration rules say it's absurd for the government to work with people it should be tracking down and deporting. It legitimizes the presence of immigrants who are here illegally, critics say, and sends a mixed message about the country's interest in enforcing its own rules.

"The word 'schizophrenic' comes to mind," said Marti Dinerstein, president of Immigration Matters, a research firm that advocates tighter immigration enforcement. "There is something fundamentally wrong about this."

The IRS created a nine-digit Individual Tax Identification Number in 1996 for foreigners who don't have Social Security numbers but need to file taxes in the United States. But it is increasingly used by undocumented workers to file taxes, apply for credit, get bank accounts or even buy a home.

The IRS issued 1.5-million ITINs in 2006 - a 30 percent increase from the previous year. To obtain one, a person needs to submit to the IRS an application and a document that serves as proof of identity, such as a visa or driver's license. All told, the tax liability of ITIN filers from 1996 to 2003 was $50-billion. The agency has no way to track how many were immigrants, but it's widely believed most people using ITINs are in the United States illegally.

In 2004, the IRS got 7.9-million W-2s with names that didn't match a Social Security number. More than half were from California, Texas, Florida and Illinois, states with large immigrant populations, leading experts to believe they likely represent the wages of illegal immigrants. Even immigrants who use ITINs to file taxes are forced to make up a Social Security number when they get a job.

Many banks now allow illegal immigrants to open an account with their ITIN, and Bank of America has a pilot program in Los Angeles that allows customers to use the numbers to sign up for a credit card. Others have created mortgage products for ITIN-bearing immigrants, including Citibank, which offers one in partnership with ACORN Housing Corp.

"They want to go forward, work, be a normal taxpayer," said Erica Gonzalez, a staffer in ACORN's Fresno office, where demand for the tax ID has shot up in recent years. "If they want to establish themselves here, this lets them do that."

Five states - West Virginia, Kentucky, New Mexico, Utah and Illinois - also allow ITINs to be used as identification for a driver's license.

[Last modified April 13, 2007, 01:37:13]