June 24, 2017 by Warren Mass
A report issued on June 22 by the Treasury Inspector General for Tax Administration (TIGTA) stated that IRS processes are not sufficient to identify all employment identity theft victims. Many of these identify thefts result from illegal aliens stealing other taxpayers’ Social Security numbers.
However, the IRS said that federal law prevents it from notifying taxpayers whose identities were stolen, and that, furthermore, its job is to collect taxes, not enforce immigration laws.
A press release posted by the TIGTA’s director of communications explained that employment-related identity theft occurs when an identity thief uses another person’s identity to gain employment. The statement went on to explain:
Taxpayers may first realize they are victims when they receive an IRS notice of a discrepancy in the income they reported on their tax return. Each year, the IRS receives about 2.4 million tax returns filed using an Individual Taxpayer Identification Number (ITIN) with reported wages.
A 2003 article in the New York Times explained the ITIN program, noting:
In 1996, the I.R.S. started issuing individual taxpayer identification numbers to illegal immigrants and foreigners earning money in this country. The agency has issued about six million identification numbers since the program began; it does not know how many went to illegal immigrants. In 2000, the agency collected $305 million in taxes from people using the identification numbers and refunded a sizable amount of that, $271 million.
In 2006, 1.4 million people used ITINs when filing tax returns. Federal tax law generally prohibits the IRS from sharing data with other government agencies, including the Department of Homeland Security, assuring unauthorized aliens that the tax information will be confidential and generally will not be used to initiate deportation procedures.
TIGTA initiated a review this year to evaluate the IRS’s processes to identify and assist victims of employment identity theft, noted the news release. This includes placing an identity theft marker on victims’ tax accounts and notifying the Social Security Administration to ensure that individuals’ Social Security benefits are not affected by misuse of their Social Security Numbers (SSN).
“Cases of employment identity theft can cause significant burden to innocent taxpayers, including the incorrect computation of taxes based on income that does not belong to them,” said J. Russell George, treasury inspector general for tax administration.
An article in the Washington Times for June 22 cited statistics from the TIGTA report indicating that the IRS only manages to identify half of the potentially 1.4 million people likely affected by the fraud in 2015.
The Times reported that the IRS is aware of 2.4 million people a year who file taxes using an Individual Taxpayer Identification Number. However, the IRS is not allowed to convey information to Homeland Security to assist DHS agents in identifying who and where those taxpayers are.
The illegal aliens file their pre-employment forms using their ITINs, but the W-2 forms they submit show valid Social Security numbers that they fraudulently gave to their employer to clear an initial work authorization check.
The article noted that a whopping 87 percent of forms filed online using ITINs showed income credited to a Social Security number. And more than half of forms filed by paper also showed that same fraudulent behavior.
The IRS attempts to mark the files of the fraud victims whose Social Security numbers have been used by illegal aliens, when electronic filings are used. But according to the inspector general, the tax agency misses about half of the victims.
TIGTA estimates that the IRS did not identify 272,416 victims of employment identity theft for the 685,737 paper tax returns filed by ITIN holders reporting wages in Processing Year 2015.
The failure of the IRS to inform taxpayers that their Social Security numbers may have been stolen by illegal aliens did not begin this year An article posted by Newsmax last August (which also cited the Washington Times, which seems to be on top if this issue) said that IRS’ inspector general reported that one million Americans had their Social Security numbers stolen by illegal immigrants, but the IRS did not tell the victims of the thefts.
“The IRS has not established an effective process to ensure that the required notice is sent to the Social Security Administration to alert it of earnings not associated with a victim of employment-related identity theft,” the inspector general’s report said.
The article quoted Senator Daniel Coats (R-Ind.) who criticized the situation strongly. “It is stunning that the IRS has chosen to aid and abet identity thieves for so long instead of protecting the innocent victims of the theft,” Coats said.
One explanation from that article highlighted a primary cause of this problem:
The IRS finds out about the issue when illegal immigrants file their taxes using Individual Taxpayer Identification Numbers (ITINs), which the agency gives primarily to illegal immigrants, in order for them to pay taxes, regardless of whether they are legally allowed to be in the U.S. [Emphasis added.]
The article also cited an IRS statement that federal law prevents it from notifying taxpayers whose identities were stolen.
Such compartmentalization of responsibilities explains why our illegal immigration problem is out of control. The indifference of the IRS to illegal immigration is as bad as local officials in “sanctuary cities,” who assert that it is not their responsibility to assist federal immigration agents in identifying and detaining illegal aliens.
Perhaps the only way to cut through the federal bureaucracy and red tape would be for Homeland Security Secretary John Kelly (who is ultimately in chare of enforcing our immigration laws) to have a face-to-face meeting with Treasury Secretary Steven Mnuchin (who heads the IRS) and ask him to direct the IRS to provide better cooperation with other agencies in not only enforcing immigration laws, but in protecting the identities of all Americans.