Cometh To The Taxman?
As tax season approaches, many of us are eager to put off fulfilling our yearly obligation to the federal government. But a recent article in the San Francisco Chronicle highlights a group of US residents who are actually eager to file their tax returns: undocumented immigrants.
How does this work? The IRS issues Individual Taxpayer Identification Numbers, or ITINs, to people who don't have social security numbers. ITINs allow undocumented immigrants to file federal tax returns, open bank accounts, get car loans and otherwise contribute to our economy. According to past estimates from the agency, about 6 million undocumented immigrants file income tax returns each year.
In growing numbers, Bay Area tax preparers have been helping undocumented immigrants fill out their often complicated tax forms. From the article: "[Tax services] have become ubiquitous in most heavily Latino communities as millions of undocumented immigrants file tax returns each year, even without collecting the benefits for which they pay."
Why pay taxes if you can't collect benefits? For some undocumented immigrants, filing taxes is a way to establish a record of obeying the law and paying into the system--this will be valuable when the time comes for immigration reform.
It's in our economic interest to enact these reforms sooner rather than later, because legalizing currently undocumented immigrants would increase their tax contributions.
First, legalization would significantly boost tax compliance, and help ensure that all formerly undocumented immigrants join our tax system. Second, studies show considerable wage gains to legalization. It follows that immigrants who earn more can pay higher taxes on their wages. We've established that undocumented immigrants work, buy homes and pay taxes that help support current and aspiring middle-class Americans. Let's pass comprehensive immigration reform and make it easier.