Statutes of Freedoms: Tax and Undocumented Law – You don’t get what you pay for

This sponsored column is by James Montana, Esq., Doran Shemin, Esq. and Laura Lorenzo, Esq., practicing lawyers at Steelyard LLC, an immigration law firm located in Arlington, Virginia. The legal information given here is of a general nature. If you want legal advice, contact Jacques for an appointment.
“Tax law and the undocumented” was one of the less popular choices in our glorious Readerpalooza poll, but it’s tax time, and we want to make sure that information is available, because someone really needs it. (Our motto here at Statutes of Liberty is “Decrease unnecessary suffering: it takes longer than expected.”)
So it’s time for a question-and-answer session between our imaginary interviewer, Cosell, and our non-imaginary founding partner.
Cosell: Let’s get right to the point. Illegal immigrants – undocumented migrants, what have you got – do they have to pay taxes?
Montana: Yes. Paying U.S. income taxes is required under federal law whether you are here legally or illegally.
Cosell: But they don’t have a social security number, do they?
Montana: Some of them do. Immigration is complicated. (Until 1974, you didn’t have to provide any proof to get an SSN – you just applied for one. See here.)
Cosell: OK, wise, but how do you pay your taxes without a social security number?
Montana: The IRS will issue you with what is called an Individual Tax Identification Number (ITIN), which replaces an SSN. An individual tax ID number allows the IRS to track you from year to year.
Cosell: But come on. It would be foolish to tell the federal government your address and name if you are living illegally in this country. Why the hell would someone do that?
Montana: A lot of our clients really want to pay taxes. They see it as part of being responsible residents in this country. Also – again, immigration is complicated! – there are a lot of mixed status families. For example, dad has TPS, mum is undocumented, one child is undocumented and the two youngest were born here. In this family, there are three legitimate social security numbers and two ITINs. Dad’s employer will withhold his income and he will want to file a tax return.
Cosell: But won’t the IRS report you to the ICE?
Montana: There are a lot of people who fear this, but federal law generally prohibits the disclosure of tax information for immigration purposes. It is a contested area of law, but our view is that people should pay their taxes. First of all, it’s the right thing to do. Second, paying your taxes is helpful proof of your physical presence and compliance with U.S. law, which your immigration lawyer will love to see.
Cosell: So let’s say I’m undocumented. Should I ask my cousin’s friend to prepare my taxes? Heard he is super good at it – always gets the best money back!
Montana: God, we get this all the time. NO NO NO NO.
Cosell: Why not?
Montana: Because your cousin’s friend is an idiot. He will, without fail, (1) claim an incorrect number of dependents, (2) write that you are “head of the family” when you are not, (3) note his address rather than yours ” just to keep it simple ”and usually make a dog’s breakfast overall.
Please speak to a licensed tax preparer or CPA. Free tax preparation is available right here at Arlington from Enterprise Development Group (EDG). If you live in DC or suburban Maryland, check out the Catholic Charities Financial Stability Network. If neither of these solutions works for you, go to a physical H&R Block office. H&R Block takes more of your refund than a free preparer, but they’re still better than the alternative.
Cosell: What’s your favorite story as an unlicensed tax preparer?
Montana: There are so many. My favorite is Kenneth Mwase, whose unlicensed tax activity not only robbed customers of their refunds, but also (allegedly) drove them to ATMs to demand more money. After his conviction, he fled to South Africa with a false Zimbabwean passport. It took an international manhunt to find him. Why would you pay for this kind of service when you can get real, healthy tax advice from a caring retired accountant for free?