Unauthorized and Paying Taxes

Sep 19, 2014

The Community Economic Development Center in New Bedford helps low income residents -- many of them immigrants in the country illegally -- file their tax returns. Immigrants often file tax returns with the hope that it eventually could help them stay in the country.
Credit Sarah Reynolds

February and March is a busy time for the Community Economic Development Center in New Bedford. It’s tax season. For the past eleven years, this community organization has participated in a federal program that helps low income people file their taxes. It offers free tax service to families making less than 52-thousand dollars a year. Williams says she gets all kinds of people coming in who fit the bill. And many of them are immigrants who are here illegally, like Luis Farfan. He stops by every year to file his tax return.

Williams says that once families come in to file their taxes, they usually come back each year. “They are paying their taxes and contributing to the economy and I think it is a widespread myth to say that immigrants don’t pay their taxes.”

Everyone who works in the U.S., no matter what their immigration status, is required to pay taxes. To file, you need a number. If a person isn’t eligible for a Social Security number – and even many authorized immigrants aren’t – they might need what’s called an Individual Taxpayer Identification Number, or an ITIN in order to file their taxes. Unauthorized immigrants fall under this category, too. This number is only for filing taxes. It doesn’t provide work authorization or access to public benefits. And the IRS says it doesn’t track the immigration status of ITIN users, so even the government doesn’t know how many ITIN filers are unauthorized workers.

One tax incentive for low-income people is the Child Tax Credit. This year, Farfan is receiving the credit for his three kids, all U.S. citizens born here. He also sees paying his taxes as an investment in their future. Filing with an ITIN allows him to create a history of their presence here, with the hope that if a comprehensive immigration reform happens, he might have an opportunity to get papers to work and stay in the U.S.

There's an assumption that because people broke the law by coming here, they have no respect for the laws of this country. I think it's usually not the case. - Schuyler Pisha

The number of unauthorized immigrants living in the country is difficult to count accurately, as many of them live in the shadows of our public systems. But according to data from the Institute on Taxation and Economic Policy, unauthorized immigrants in the U.S. paid more than one billion dollars in personal income tax in 2010.

For the unauthorized workers who file their taxes, it’s still an investment with no guarantee. And not everyone thinks it’s a good idea. Bristol County’s Sheriff Thomas Hodgson says it’s hypocritical to encourage people who are here illegally to pay their taxes when they’re here illegally in the first place.

“You can’t have both ways,” says Hodgson. “That’s why people who are coming here illegally get confused. If I were coming here illegally saying, well they don’t really care because if I go there and I’m paying taxes, they know I’m illegal. Then they must think it’s okay.”

Even with the uncertainty, for some, it’s still seems worth it. If a person who’s here illegally has an opportunity to adjust their status or to avoid deportation in the future, an immigration judge could ask, have you been paying your taxes? Schuyler Pisha is the legal director at Catholic Social Services of Fall River. He says having paid taxes can prove “good moral character” and in some instances could change the outcome of a case. And it’s also a matter of pride, he says.

There’s an assumption that because people broke the law by coming here that they have no respect for the laws of this country,” he says. “I think it’s usually not the case. They think of themselves as law-abiding people.” Pisha says, these immigrants often come from countries where there are few opportunities to get ahead. So, they’re willing to do whatever it takes.

For unauthorized immigrants who get paid on payroll instead of under the table, they will likely never see their withholdings because they often work with invalid Social Security numbers. Their Social Security contributions are put in the same pool as the rest of us who pay in. This pool is then used to pay out benefits to U.S. citizens and others who are eligible, but not to pay back these unauthorized workers. The Social Security Administration says the financial contribution from this workforce helps with the solvency of the Social Security program.

In New Bedford, Corinn Williams says the Community Economic Development Center filed more than 1,500 tax returns through their federal tax assistance program this year. And she estimates that more than 25% of them were filed by unauthorized workers. It’s an investment without a certain payoff, but some unauthorized immigrants hope filing tax returns can prove their willingness to contribute to a new country they’d like to call home.

NOTE: This is not an exact transcript of the original radio reporting piece. To hear the full story, click the LISTEN button above.

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