1.4 million illegals working under stolen Social Security numbers: Audit

[timosman]

http://www.washingtontimes.com/news/...cial-security/

June 22, 2017, by Stephen Dinan

Most illegal immigrants who pay taxes have stolen someone else’s legal identity, and the IRS doesn’t do a very good job of letting those American citizens and legal immigrants know they’re being impersonated, the tax agency’s inspector general said in a new report released Thursday.

The theft creates major problems for the American citizens and legal foreign workers whose identities are stolen, and who have to deal with explaining money they never earned.

But the IRS only manages to identify half of the potentially 1.4 million people likely affected by the fraud in 2015, the Treasury Inspector General for Tax Administration said in its report.

“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, the inspector general.

It’s long been a conundrum in the federal government.

The IRS knows of 2.4 million people a year who file taxes using an Individual Taxpayer Identification Number, which is generally given out to immigrants who aren’t authorized to work. But the IRS is not allowed to talk with Homeland Security to help agents identify who and where those taxpayers are.

The migrants file their forms with 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.

A staggering 87 percent of forms filed online using ITINs showed income credited to a Social Security number. More than half of forms filed by paper also showed that same fraudulent behavior.

The IRS tries to mark the files of the fraud victims when electronic filings are used. But the tax agency misses about half of the victims, the inspector general said.

For paper forms, the IRS did even worse, the audit found.

The tax agency, in its official reply to the report, insisted it takes identity theft “very seriously.”

Kenneth C. Corbin, commissioner of the IRS’s wage and investment division, said it has just completed a pilot program to figure out how to notify taxpayers they’re the victims of fraud.

But he said in most of the cases they’re missing right now, the Social Security number given is for someone who doesn’t have a tax account on their system.

He said they can’t create a notification for someone who’s not in their files, and said because of privacy concerns they won’t just send a notification to the addresses listed.

He also said there are cases where someone knowingly loaned out their Social Security to an unauthorized worker, and thus wasn’t properly a victim but a conspirator.

The IRS agreed to some of the inspector general’s recommendations but refused others. Mr. Corbin said the IRS would do what it could, but pleaded poverty, saying the agency has “limited resources.”

“We cannot commit to additional actions that would require significant resources to accomplish,” he wrote.

[CPUd]

Are they also paying income tax?

[timosman]

Are they also paying income tax?

Irrelevant.

[Zippyjuan]

Are they also paying income tax?

And social security taxes. And they can't collect any benefits. Plus the identity theft isn't just by illegal immigrants. Citizens may engage in it as well.

https://www.theatlantic.com/business...-taxes/499604/

The Truth About Undocumented Immigrants and Taxes

They’re contributing billions of dollars a year to Social Security, but may never reap any retirement benefits from it.

Every year, the Social Security Administration collects billions of dollars in taxes that it doesn’t know who paid. Whenever employers send in W-2 forms that have Social Security numbers that don’t match with anyone on record, the agency routes the paperwork to what’s called the Earnings Suspense File, where it sits until people can prove the wages were theirs, allowing them to one day collect retirement benefits.

The Earnings Suspense File now contains Social Security tax forms that date back to 1937 and are linked to the taxes that were paid on nearly $1.3 trillion in wages. Some of the W-2s in it belong to people who got married and never reported changing their name. Others are people who filled out their tax forms incorrectly. As of 2014, efforts to track these taxpayers down allowed the Social Security Administration to match 171 million tax forms to their rightful owners.

But there are still about 340 million unclaimed tax forms recorded in the file, compared to 270 million nearly a decade ago. A good portion of those forms were filed by employers on behalf of some of the most unlikely funders of Social Security: undocumented immigrants. In fact, illegal immigration is considered largely responsible for the mushrooming of the file, with undocumented workers paying billions in taxes for retirement benefits they will likely never receive.

It works like this: Many immigrants who aren’t authorized to work in the United States buy fake Social Security cards and present them to their employers, who either don’t know they are fake or don’t look too closely. When the employer submits a W-2 form and a tax payment on those workers’ behalf to the Social Security Administration, the federal government holds onto those payroll taxes, even if the Social Security number isn’t linked to anyone on file. And then, a large chunk of that money ends up in the Social Security trust funds, from which retirement benefits are doled out to aging Americans.

The Social Security system has grown increasingly reliant on this stream of revenue, particularly as aging Baby Boomers start to retire. Stephen Goss, the chief actuary of the Social Security Administration, estimates that about 1.8 million immigrants were working with fake or stolen Social Security cards in 2010, and he expects that number to reach 3.4 million by 2040. He calculates that undocumented immigrants paid $13 billion into the retirement trust fund that year, and only got about $1 billion in benefits. “We estimate that earnings by unauthorized immigrants result in a net positive effect on Social Security financial status generally, and that this effect contributed roughly $12 billion to the cash flow of the program for 2010,” Gross concluded in a 2013 review of the impact of undocumented immigrants on Social Security.

[showpan]

And social security taxes. And they can't collect any benefits.

https://www.theatlantic.com/business...-taxes/499604/

Bull$#@!....I worked in Vegas for 15 years doing construction and the Mexicans were claiming exempt on their W-4's. So they weren't paying any taxes. Then, their wives were spitting kids out like popcorn and claiming they weren't married. Any child born here automatically qualifies for everything including her previous children and they didn't pay a dime to have their kids while I payed over $10k. Anyone who claims otherwise is a liar.

[oyarde]

Bull$#@!....I worked in Vegas for 15 years doing construction and the Mexicans were claiming exempt on their W-4's. So they weren't paying any taxes. Then, their wives were spitting kids out like popcorn and claiming they weren't married. Any child born here automatically qualifies for everything including her previous children and they didn't pay a dime to have their kids while I payed over $10k. Anyone who claims otherwise is a liar.

This is about what I always figured .

[Zippyjuan]

Exempt only applies to federal tax witholding. Social Security and Medicaid and state taxes are still taken out of the check.

https://www.patriotsoftware.com/payr...x-exempt-mean/

The tax exemption on Form W-4 does not apply to Medicare or Social Security taxes. Even if an employee is exempt from federal income taxes, you should still withhold Medicare and Social Security taxes.

What does claiming exempt mean for an employee’s state and local tax liabilities? The federal income tax exemption does not automatically exempt the employee from state or local income taxes. In some states, Form W-4 might or might not exempt the employee from state or local income taxes. The employee might need to fill out a different form for state or local withholding. Because the laws are different everywhere, you should check with your state and local laws.

[Swordsmyth]

Bull$#@!....I worked in Vegas for 15 years doing construction and the Mexicans were claiming exempt on their W-4's. So they weren't paying any taxes. Then, their wives were spitting kids out like popcorn and claiming they weren't married. Any child born here automatically qualifies for everything including her previous children and they didn't pay a dime to have their kids while I payed over $10k. Anyone who claims otherwise is a liar.

This is about what I always figured .

This and worse.

[Zippyjuan]

Federal benefits only apply to the citizen child born in the US.

[Swordsmyth]

Federal benefits only apply to the citizen child born in the US.

The liberal government workers look the other way and don't ask questions.

[Zippyjuan]

The liberal government workers look the other way and don't ask questions.

Trump wants to reduce regulations and enforcement of rules on things. Citizens commit fraud as well.

[Swordsmyth]

Trump wants to reduce regulations and enforcement of rules on things. Citizens commit fraud as well.

I am not a simpleton, your idiotic generalization will not work.

[kpitcher]

I know one very private minded person who always messes up his social security number at his jobs. He transposes 2 digits or something innocent like. HR will finally notify him and he'll mess up in some new fashion. Of course I doubt there are 1.4 million people like him around, he's rather unique.

[oyarde]

Federal benefits only apply to the citizen child born in the US.

I never wanted to pay for any of it . There should be no fed benefits .

[KrokHead]

Are they also paying income tax?

Yes.

[showpan]

Federal benefits only apply to the citizen child born in the US.

No they don't...lol...who told you that. As soon as they enroll their illegal kids in school, they qualify for everything and each state has their own rules.

You can file exempt on most state taxes also. I have worked all across this country for the last 30 years and it's gotten completely out of control. It's not because of the Liberals either....lol...Republicans were the ones who first came up with amnesty. They wrote NAFTA. They are the ones who wanted to artificially lower our wages while filling the swamp with millions of illegals in order to break the unions and reap obscene profits. It has worked great so far since wages have been stagnant for at least 30 years now while inflation has multiplied. Trump is no different, he has flipped on every promise he made and is only going to advance the globalist neoliberal warmongers agenda. He already has. he's just an orange Obombya.

[Zippyjuan]

No they don't...lol...who told you that. As soon as they enroll their illegal kids in school, they qualify for everything and each state has their own rules.

You can file exempt on most state taxes also. I have worked all across this country for the last 30 years and it's gotten completely out of control. It's not because of the Liberals either....lol...Republicans were the ones who first came up with amnesty. They wrote NAFTA. They are the ones who wanted to artificially lower our wages while filling the swamp with millions of illegals in order to break the unions and reap obscene profits. It has worked great so far since wages have been stagnant for at least 30 years now while inflation has multiplied. Trump is no different, he has flipped on every promise he made and is only going to advance the globalist neoliberal warmongers agenda. He already has. he's just an orange Obombya.

Education is a state, not Federal benefit. And as you note,

each state has their own rules.