Established 15 years ago, the Individual Taxpayer Identification Number [ITIN] is a seemingly innocuous administrative requirement that the Internal Revenue Service assigns to anyone who is employed and pays taxes. According to the IRS website, the numbers are used for federal tax reporting only. But since ITINs, as they are commonly known, are issued to wage earners regardless of immigration status, they’ve frequently been abused by the aliens who hold them.
For aliens, the ITIN is an extremely useful vehicle. Since the IRS isn’t required to share its information with any other federal agency, including immigration authorities, the promise of intra-agency confidentiality allows aliens to file tax returns without fear of deportation. At the same time, holding an ITIN enables aliens to authenticate their presence in the United States and prove that they have paid taxes. This information could be crucial if Congress ever enacted an amnesty.
The ITIN’s improper use is once again in the news. The Federation for American Immigration Reform, in its recent analysis entitled “Treasury Department Says Illegal Aliens Collection Billions in Tax Credits,” revealed that according to the Department of Treasury’s Inspector General, more than $4.2 billion in additional child credits were paid out in 2010 to illegal immigrants. In 2005, the pay outs totaled $924 million. This program allows low income earners to claim a $1,000 per child credit. If the household ends up with no additional tax obligation—as most alien families do not—then $1,000 is paid to them.
Pursuant to the IG report, 72 percent of tax returns filed by ITIN users claimed this credit compared to just 14 percent of returns filed with social security numbers. The generous payment of these benefits represents yet another incentive for aliens to enter, reside and work in the United States without permission. Providing incentives to aliens, financial or otherwise, is against the law.