IRS Is Subverting Immigration Controls, says Report

November 18, 2002

WASHINGTON – While Americans anxiously avoid the attention of the Internal Revenue Service (IRS), that agency is providing cover to 9 million illegal aliens in the United States. By providing illegal aliens with a government-issued identity number, used in lieu of a Social Security number, the IRS is subverting the immigration law, undermining national security, and thwarting efforts by other federal agencies to cooperate in homeland security efforts.

These are among the conclusions of "Giving Cover to Illegal Aliens: IRS Tax ID Numbers Subvert Immigration Law," a new report by Ms. Marti Dinerstein, president of Immigration Matters, a public-policy analysis firm in New York, and a fellow at the Center for Immigration Studies.

Dinerstein found that the IRS decided in 1996 to treat illegal immigrants as "resident aliens" based on their "substantial presence" in the U.S., thus rendering them eligible for the Individual Taxpayer Identification Number (ITIN). The ITIN is intended as a substitute to the Social Security number for tax purposes only, but it has turned into an official identity number used by illegal aliens to open bank accounts and, in some instances, obtain drivers licenses.

The 9/11 hijackers benefitted from a flourishing market in fraudulent documents catering to America's record-high illegal-alien population by easily acquiring real or fake driver's licenses and Social Security numbers. Now an agency of the federal government is broadening access by illegal aliens to documents that aid in laundering their residency status. In 1999, the Treasury Department's Inspector General for Tax Administration noted this contradiction, saying that the IRS policy of issuing ITINs to illegal aliens "seems counter-productive to the Immigration and Naturalization Service (INS) mission to identify and prevent unlawful entry."

The IRS policy, Dinerstein contends, also runs counter to the Social Security Administration's recent efforts to stem unlawful use of Social Security numbers (SSN). That agency has taken steps to limit the purposes for which an SSN can be issued and to better validate the underlying "breeder" documents presented to obtain an SSN. This past summer, the agency mailed out more than 750,000 letters to employers of approximately 7 million workers whose names did not match the SSN provided.

"The IRS is giving cover to illegal aliens by pretending that the ITIN is solely for tax purposes, when in actuality it is commonly used to establish official identity," Dinerstein said. "This policy also violates the USA Patriot Act by withholding information from the INS and the Social Security Administration about the fraudulent activity of illegal aliens," she added.

Center for Immigration Studies