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.
Although the real estate crisis is fading from our memory, it’s important to recall
that the ITIN was the vehicle used in lieu of Social Security numbers, which then
legitimized the disastrous lending policy of providing home mortgages to
unqualified illegal aliens. With bankers as their willing abettors, and while the
Federal Deposit Insurance Corporation purposely looked the other way, aliens
took out home loans using ITINs as their major form of identification. Bankers,
only too-eager to accommodate poverty-level applicants with balloon financing
for homes they could barely make the first payment on, raked in big money.
To the bankers, aliens represented the “new market.” Today, five years later,
the nation is still reeling from the avalanche of foreclosures that followed.
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.
The ITIN is a sham that should be eliminated. The federal government knows
that many ITIN users are illegally in the United States. Automatic acceptance
of the ITIN without additional identification is tantamount to endorsing illegal
At a time when Congress and the president are struggling to find ways to
cut trillions of dollars from federal spending, and while more than 14 million
Americans are unemployed, it’s unconscionable for the IRS to ignore abuse
of its ITIN program that results in billions of dollars in payments made to
November 26, 2011 By Joe Guzzardi